MUTUAL FUNDS VS STOCKS – WHO WINS THE RACE?

Mutual Funds vs. Direct Equity – Who wins the Race?

Is a direct foray into the stock markets preferable over investing in mutual funds? The answer probably lies in the investor’s capabilities. For instance, when we talk about wealth-creating stocks, blue-chip names, such as TCS, Reliance, Infosys, Wipro, etc come to mind. While they have managed to garner great returns in the past 20 odd years, how many investors would have spotted these winners right at the beginning? Not too many, we suppose. However, it would have been relatively easier to identify top mutual funds vis-a-vis top stocks a decade ago. Let us assess these two fine investment options on some parameters:

1) Behavioral Science

A critical element in successful investing is "how you react to feelings of both discomfort during the market's fear cycle and invincibility when markets are booming," writes Marty Leclerc in an article in the Forbes magazine. During periods when share prices drop, he says, data shows that most investors want to end the discomfort (basically stop loss?), which is the "root cause of poor returns.

It is quite surprising that emotions and fear have a link to investing habits. Let us understand this with a simpler example. This is an experiment conducted by a group of scientists as part of understanding behavioral science. A group of monkeys were put inside a cage with a ladder having some bananas on the top. One of the monkeys started climbing the ladder to pick up the bananas. Once it started climbing, the scientists started pouring cold water on the remaining monkeys due to which these monkeys started to beat the climbing one. Water stopped after the first monkey got down. This happened every time a monkey tried climbing the ladder. Slowly, they started replacing these monkeys with a new set of monkeys. However, one change was that they stopped pouring cold water now. These monkeys failed to notice this change and kept beating the monkey which tried to climb the ladder.

This is (in)famously known as the herd mentality. Herd mentality could prove to be disastrous, especially in the investing world. Your reactions to various ups and downs in the market can have a greater impact on the final returns. Patience is the master. The more patient you are, it is highly likely that you beat all odds. It may not possible to be patient or invest systematically in a stock, which can move from East to West in no time. However, by starting a Systematic Investment Plan (SIP) in mutual funds, you can definitely imbibe the patience in your nerves.

2) Investing in top companies

Anyone would love to invest in top companies such as MRF Ltd, Eicher Motors or Bosch. However, can you imagine the prices these are quoting at? They are currently trading between Rs. 20,000-40,000 per share, which puts them out of reach for the average investor. However, a good mutual fund allows you to indirectly obtain a decent exposure to such scrips.

3) Investing regularly in small amounts

It is not quite easy investing small amounts in the same stock every month, quarter or year. It requires keeping track of the stock and sometimes the volatility can get the better of you. In comparison, it is easy to opt for a 10, 15 or 20 years SIP in any of the decade old funds. The best part is that you can actually start off with as low as Rs. 500 per month.

4) Professional Management

We had discussed on how tough it would have been for the common investor to identify an Infosys, Wipro or TCS at the beginning? It is the same case even today. When we lack the knowledge and tools to identify stocks that may turn out to be winners/ losers in the future, it is better to lean on the expertise of a mutual fund (manager). A fund manager possesses all the skills as well as equipment to be able to identify these next-gen stars.

Final Word

The above factors clearly point out to mutual funds as an easier entry option for investors. However, this is not an invitation to move to mutual funds from stocks. If you are already investing in stocks or have the skill-set to pick good stocks from a large universe, persist to make the most of it.

HAPPY INVESTING

Rajiv Kapoor
B.Sc., LLb., FCS
9839034761

Home Loan at Zero% Interest

Home Loan @ 0% Interest

Do you know❔
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💢You can get back all your Home loan interest you pay through EMI's.

How❔
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💢 If you avail Home loan of 10 lacs for 20 years with an interest rate 9.5% your.....

Monthly EMI: Rs. 9,321.31/-
Principal Amt : Rs. 10,00,000/-
Interest Payable : Rs. 12,37,144/-
Total Amt Payable: Rs.22,37,115/-

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💢 Now to get back your interest you just have to keep aside 0.10% of your home loan amount.
ie 0.10% of 10,00,000/- is 1,000/- per month till the tenure of your home loan.

*Start an SIP Till the tenure of your home loan with the amount you are keeping aside. (ie Rs. 1,000/-)*

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💢what will be value of Rs. 1,000 pm @15% if invested through SIP❔

After 20 years➡

Principal Amt: Rs. 2,40,000/-
Value@ 15%: Rs. 14,97,239/-

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In Home Loan you pay an Interest of Rs. 12,37,144/- in 20 years.

While in Mutual fund SIP you generate a wealth of Rs. 12,57,239/- which is more than the Interest amount you are paying in next 20 years.

🎯 Start your SIP now and enjoy interest free home loan.

Rajiv Kapoor
9839034761

Create Elephant Wealth - Start SIP in Mutual Funds

Puppy Wealth or Elephant Wealth

An elephant and a dog became pregnant at same time. Three months down the line the dog gave birth to six puppies.Six months later the dog was pregnant again, and nine months on it gave birth to another dozen puppies.The pattern continued.

On the eighteenth month the dog approached the elephant questioning, _”Are you sure that you are pregnant? We became pregnant on the same date, I have given birth three times to a dozen puppies and they are now grown to become big dogs, yet you are still pregnant.

Whats going on?”

The elephant replied, _”There is something I want you to understand. What I am carrying is not a puppy but an elephant.

I only give birth to one in two years. When my baby hits the ground, the earth feels it.When my baby crosses the road, human beings stop and watch in admiration, what I carry draws attention.

So what I’m carrying is mighty and great.

”Likewise if you break your SIP in one or two years, you will get puppy wealth and if you keep your SIP for 10 to 15 years you make elephant wealth.

Think before you stop your SIP mid way.

You want to settle for puppy wealth that lives for 7 to 8 years or do you want elephant wealth that will stay for 100 years.

So the message is continue your SIP in mutual funds for long term to create Elephant Wealth.

Do let me know if my help is required.

Rajiv Kapoor

9839034761

THANK YOU SO MUCH – I AM GRATEFUL TO YOU

THANK YOU SO MUCH – I AM GRATEFUL TO YOU

It has been for quite some time now that you have been reading my mails for updating yourself and the information that I have been posting, must have helped you in some way for sure.

I take this opportunity to thank you for the confidence that you have reposed in me which is evident from the fact that you are reading this communiqué. For sure, by now you must have been confident that there is someone who is selflessly motivated for your well being and is your ardent well-wisher.

Have you ever wondered that what I have earned or how am I being benefitted by sending these mails to you or by sharing good information with you. Let me unveil this mystery…. !!

I am actually GRATEFUL to you for not only the confidence that you have reposed in me and the good things that you practiced for yourself but for some more things which has immensely benefitted me both physiologically and monetarily  ……

1.    It has given me recognition and acknowledgement.

2.    People trust something or someone simply because that thing or that individual has my recommendation and approval.

3.    Following values and discipline in life has become easy for me because I keep preaching the same.

4.    I have been able to command good respect of the young generation and love and affection of the elders.

5.    I have been able to put my new venture of selling INVESTMENT AND INSURANCE products with ease, the venture that I humbly started in late 2011 after taking permission from my institute (The Institute of Company Secretaries of India). With your kind cooperation and referrals, I have been able to accumulate more than 300 active investors who dote and trust me for all their financial decisions. Those 300 people are few amongst you, who have been receiving my mails, updates and whatsapp regularly.

6.    I have been able to gather more professional work with better dignity and client relationship.

I understand that my communication with you and my expressing GRATITUTE builds up a cooperative environment for me which gives me immense energy and motivation to exploit my potential to the fullest. It’s so simple …………. when you receive cooperation and appreciation you are motivated to do more. Being thankful and getting appreciation is ultimate joy. That brings REAL happiness.

So communicating with you effectively, sharing good things with you selflessly and being your ardent well-wisher has given me, name, fame, goodwill, appreciation, acknowledgement, clientele, professional work, discipline, success and overall joy and happiness. So without you I am nothing. Thanks for just being there and for opening my mails and communications.

Thank you so much – I am so grateful.

Regards

www.rajivfcs.weebly.com

Rajiv Kapoor

Practicing Company Secretary

Kanpur

9839034761

TERM INSURANCE

TERM INSURANCE – GO FOR IT NOW !!

It's great to make investments that earn you big returns, but it's not so great to not have term insurance to protect your family's future in case you are not there to take care of them.

Unfortunately, not taking term insurance is a money mistake that far too many Indian investors make. There are many reasons that we pay less attention to term insurance than we do to mutual funds or other investments. Most commonly, people never sit and plan how their family would cope if they were to die suddenly. Perhaps this is because of optimism, or perhaps it's because of never being guided properly and not having a clear idea of how much money will your family need.

The great thing about term insurance is that it costs very little. Unless you leave it till too late, you can easily get a term insurance that is equal to ten years' income by spending no more than 1% to 3% of your annual income. This is an amazing deal. In all of personal finance, this the best example of getting a lot for very little. The sad part is that far too many people do not take term insurance ‘because you don't get anything back'. This is a grave mistake.

Term insurance is not an investment. It should be treated as an expense, an expenditure which affords protection. One should gladly pay and be happy that we may never have a situation where we get anything back from the insurance company. But if anything unfortunate does happen, then the returns are greater than from any investment.

One can be excused for getting a lot of things wrong in personal finance, but term insurance is not one of them.

Same thing holds good for health insurance too.

RAJIV KAPOOR

9839034761

INVESTMENT IN LAND OR IN MUTUAL FUNDS - WHICH IS BETTER ?

INVESTMENT IN LAND OR IN MUTUAL FUNDS - WHICH IS BETTER ?

A piece of land may give good returns on investment but it needs large funds.

Locking up large funds for substantially long period of time, because the investment is quite illiquid, makes the compounding
effect amplified.

This makes the Return on Investment better than in stocks/Mutual Funds.

Even if the value of the land appreciates substantially it is not easily saleable.

It is not easy to sell a part of it as in the case of Mutual Funds.

So the investment stays and grows.

The compounding can be seen taking effect in this and not in Mutual Funds/ stocks where the temptation to book profits it too big to resist.

On sale of land one has to pay long term capital gain tax whereas in case of mutual funds there is no tax implication on long term capital gains.

Simple and easy things are most of the times most difficult to understand.

RAJIV KAPOOR
9839034761

WANT TO CREATE WEALTH - TAKE MY HELP

WANT TO CREATE WEALTH - TAKE MY HELP

Do you know what are common factors which make people wealthy and successful ??

Do you know whether the  SIP that you fixed few years ago adequate to create enough wealth for you ?

Do you know how much wealth would you generate by investing your hard earned money in SIP ??

Did you ever care to review how your SIP is performing ??

Do you really know what is SIP in mutual funds and why is it good for you to keep your SIP always on ?

Do you know various SIP options available to you ??

Do you know which are the best investments options available to you and in which product you should do SIP regularly ?

Do you know what is the difference between being  wealthy and being rich ??

Do you know what is the difference between being wealthy and being successful ??

Do you know what is the difference between investing, lending and saving ?

Come to me, I will explain you every thing about investing and wealth creation.

I will clear all your doubts. Answer all your queries.

You are a friend and I care for you.

Be financially educated before you slog and before you decide to invest in LIC, PPF, Bank FD or invest in flat, land or otherwise do a permanent harm to yourself by investing in something or by investing on request of a friend or a relative or someone very close and dear who is himself not financially educated.

Investing judiciously and managing one's own life time finances and savings is most important education that one should possess before he starts earning.

Regret that we all want to be rich but how to create wealth and be rich is never taught to us in any  school.

I learnt somethings by my own experience .... and have paid heavily for that.

So I can help you to avoid mistakes.

I am your well wisher and a friend.

You can trust me.

Rajiv Kapoor
9839034761

REASON WHY PEOPLE DON'T BECOME WEALTHY?

Why is it that people don't become wealthy? In a country like India, which has the right set of demographics, opportunities for business can be found in everyday life. Ours is a country, where a tea boy can rise to become the prime minister. Certainly, opportunities abound for those who set their eyes on achieving something big in their life. The question then arises is; Why there are so many people who are not rich, even though they desire to be? There are a majority of people who could have been much wealthier than what they are today. Why are there such a limited number of people retiring ­financially independent? Here are a few factors which can be the reasons as to why many haven't yet achieved the bank balances that they long for.

SELF DOUBT :

Let us begin by the one thing that kills most dreams than challenges do. It is self doubt. Most of us do not believe that we can be wealthy. An average middle class family person mostly would not be friends with someone who is 'really rich'. The social circle of such a person is limited to people, who share more-or-less his own financial background. If someone has grown up in a middle class setup and has his personality molded in this fashion, it is less likely that he would 'believe' that he can be rich. On the other side, a

person who has grown up in a wealthy family, is more likely to become wealthy as he believes that he can be wealthy too.

MAKE A DECISION :

The second reason that people are not wealthy is that they do not decide to be wealthy. Yes, it is true in spite of many of us yearning to be wealthy. Reading motivational books, listening to success stories or being friends with the wealthy can't make you wealthy if you do not decide to be rich. And without necessary actions, results will not follow. The primary reason many do not become wealthy is that they don't decide to be successful ‑financially. They avoid even taking the basic steps of wealth creation like saving, investing, etc. at the right time. To become wealthy, you have to believe, decide and take the ‑first step and every step thereafter, until you have become wealthy.

PROCRASTINATION :

There is no better poison than procrastination in your ‑financial life. People always have a good reason to not do something which has to be done to achieve ‑financial independence. It is always the wrong maths, wrong doubts, wrong concerns or wrong market, to be blamed while procrastinating your investment/business decisions. One does not want to take risks or give up security. As a result, most keep putting o decisions until it is too late. Being someone who procrastinates or having too many delayed decisions in life, ultimately ensures that you are not wealthy.

LIVING IN THE MOMENT :

Another big reason why people are not wealthy is because of their inability to delay grati‑cation. They fail to procrastinate purchase decisions that give them instant grati‑cation, pleasure, leisure and comfort. Majority of us have an irresistible temptation to spend on everything; gadgets, clothings, holidays, cars, holiday homes, etc. Most of us have read about budgeting but have never practiced in real life. Unless we control our temptations and spendings and follow a budget in our lives, we cannot achieve ‑financial independence. As W. Clement Stone rightly said, “If you cannot save money, the seeds of greatness are not in you.”

TAKE THE LONG VIEW :

Most of us are devoid of the bigger vision in our lives. We lack the right time perspective to look at things. The amount we spend in planning our day to day activities and smaller decisions nowhere compares to the time we spend in identifying and planning for our goals in life. We do not project ourselves into future and decide what to do or not to do in the present. An example of long term planning is starting to save for your child's education right after his birth, irrespective of the fact that the saving will not be utilized until the next 16-18 years. Another good example is saving for your retirement well before you hit the age of 30.

STAYING IGNORANT :

In today's world knowledge has become a commodity as it is freely available. However, what is valuable today is your ability to put that knowledge into right use. Unfortunately, most of us even lack the basic knowledge in areas of personal ‑finance. Most of us are unaware of the asset classes, investment avenues and basic principles of savings and investment. In a world where knowledge is freely available, have we all put an effort to learn and understand how to save and invest? I am sure most of us have not put in any

special effort and instead relied on our friends and family alone.

MAKING BAD DECISIONS :

There are many of us who have made ‑financial decisions in absence of the right knowledge. Without proper awareness and disclosures, there are countless people who have fallen prey to fake money making schemes and promises. We tend to follow our friends and families in making the same mistakes that they have made on the assumption that they are right, or worse, it will be a shared fate if wrong. Quite often, the outcomes are nothing proud to speak of. As a safety net, we should all resolve to never put in even a rupee in unregulated plans that are from doubtful promoters.

NOT PROTECTED :

There is one big reason why some of us fall into debt traps or lose all our existing wealth. A common situation in all such cases is that the person, family or business is not adequately protected. Any unforeseen, unwelcome event can potentially wipe out all your wealth and dreams. It is a losing game if we do not get ourselves, our families and our professional /business assets protected. Our ‑financial well-being and dreams are just too big to put on the table, just to save the costs of protection.

ALL EGGS IN ONE BASKET :

What do we find common among all the rich people? A likely answer to that question is income from multiple sources. Most of the wealthy people tend to spread their risks and also put their stakes in multiple opportunities. This is done by engaging themselves and having ‑financial interests in multiple income sources and/or businesses. But it need not only be limited to businesses. Aiming to generate and then reinvesting the income from investments is also a great way to build wealth. Most of us who are not wealthy are dependent on a single salary or business income.

FIND A MENTOR :

Finding a guide or a mentor or the right ‑financial planner /advisor can do wonders for our financial well-being. In a life where we may not have any close role models who are wealthy, having someone

to guide our financial decisions can be wondrous. A mentor will be someone who is trustworthy, knowledgeable and genuinely concerned about your ‑financial progress. The most valuable role of

your mentor will be to manage your emotions and make sure that you are not biased or emotionally driven to take wrong ‑financial decisions.

CONCLUSION :

While it is not in our hands to decide fate and destiny, it is definitely in our hands to ­influence it in ‑financial terms. Be it savings, investments or protection, it is all well within the realms of reality, that we take the right, informed decisions. The story of being wealthy begins by having the right self belief, a strong intent, backed with actions and decisions and sometimes guided by the right people. An important part of being wealthy is also about managing our emotions and our habits where we do not procrastinate our ‑financial decisions and keep control on our spendings. None of the reasons why we are not wealthy are beyond our control. What is now required is that we practice what we have read.

Retirement Planning - Elderly Couple

Retirement Planning …
     A case study elderly couple. ..

As we were returning from Goa, we happened to share our bench with an elderly couple who had just crossed seventy.

Husband has retired from senior level position in Central Government.

The  wife has retired as steno typist from one of the respected names in private sector after forty years long service.

While sharing general topics, inadverdently we touched my favourite topic of retirement planning.

Here are some of the gems that I picked up from uncle:

1) Do not dream on behalf of your children. They have their own dreams and aspirations. Parents job is only to fund education.

2) The generation to generation view of life changes drastically. Learn to take it cool.

3) Do not over invest in real estate. The children are too busy to maintain property which is outside their place of work. This couple in their seventies visits Goa every month to maintain their second home.

4) Land purchased by the couple has been encroached with only a third portion of it in their possession. Children do not have inclination to fight it out in court.

Children are highly educated and well placed in life. With their spouses also working, no one is interested in assets owned by parents.

5) Cash invested in some form which gives regular interest or is easily encashable is most important than anything else.

The uncle gets monthly pension of Rs. 35000 and yet even one monthly pension is delayed, they get jitters.

6) Major investments of family are in real estate and Gold. Both they are not able to sell.

7) Mediclaim was ignored when the health was perfect. Now both partners had to undergo  sugeries where a total of Rs. 8 Lacs has gone from savings.

His parting message

👉 My son, Cash is very important. Invest in asset which gives you regular income and easy liquidity. Also take very good care of your health. Good health plus Good Cash is Happy Retirement.

Lots of learning from this lovely couple.

Rajiv Kapoor
FCS
9839034761

Parenting

To all parents and even grandparents, as well as teachers, here are some unnbelievably simple parenting ideas that work.👇

1. Children need a minimum of eight  touches during a day to feel connected to a parent.

If they’re going through a particularly challenging time, it’s a minimum of 12 a day. This doesn’t have to be a big deal; it could be the straightening of a collar, a pat on the shoulder or a simple hug.

2. Each day, children need one meaningful eye-to-eye conversation with a parent.

It is especially important for babies to have that eye contact, but children of all ages need us to slow down and look them in the eyes.

3. There are nine minutes during the day that have the greatest impact on a child:

the first three minutes right after they wake up
the three minutes after they come home from school
the last three minutes of the day before they go to bed
We need to make those moments special and help our children feel loved.
These are simple, right? Nothing really earth-shattering here.

Try it.
1⃣ Whenever u feel like scolding or beating your child, take a deep breath, or count 1-10 and then act.
2⃣ Let's ask them to study their favorite subject on their own..
3⃣ Send them to one exam without studying at all..
4⃣ Remember what our kids are learning in 5th std is taught to 7th std abroad..
5⃣ Lets keep our kids out of unwanted competition.
6⃣ 80% of what kids are learning ,won't be useful to them in future..
7⃣ Our kids can really afford to do whatever they want to do in future .
8⃣ Higher degrees don't guaranty success and happiness..
9⃣ Not all the highly educated people do well professionally.
And not all who do well professionally are the happiest ones..
10. Kids are always in a party mood.. don't spoil their childhood. Support and let them be what they want to be. 👍😃

Rajiv Kapoor
FCS
9839034761