I WANT TO HELP

THIS MESSAGE NOT FOR MONEY, NO COMMERCIAL MOTIVE INVOLVED – SIMPLY WANT TO HELP …………. !!

Just to share with you, there has actually been time in my life which
lasted few years when I wanted to end my life.

YES you read it right.... I wanted to commit Suicide.

I had friend, who ditched me. I could never communicate with my parents who were themselves in constant respective struggles of their own. I was a loser all through. I was almost sure that whatever I would do I will fail.

When this was all going on with-in me, no one was knowing about this.

So, I really know what it really means when someone is DEPRESSED or wrecked.

My entire schooling has been from the best School (Jaipuria) of Kanpur, where teachers contributed to my misery further. Insult and punishment for not completing the home-work was an every-day ritual of my school life.

Those days, teachers were allowed to insult and beat students with hands, stick, rod and fist.

I have experienced failures, crisis, ignominy, frustration and struggle.

Today, it has been a long time that I have come up of all negativity and
bad times.

I consider myself happy, extremely self reliant, commanding dignity,
financially independent, having many friends. Blessed with good family,
friends and lot of professional work.

I therefore practice humility and gratitude on daily basis and remain
reminded of my own mortality each moment.

I am so-very PASSIONATE, therefore to help people to live happily and
peacefully.

If you are the one who is right now going through any crisis, depression or a problem you can just anytime talk to me for a friendly help.

Even if you don't consider me a friend still, I promise to do whatever the best I could have done for my dearest friend.

And if this message doesn't mean anything to you, then please forward it to someone whom you think might be in need my help.

You can know more about me by searching me on Google....

..... Just search for "Rajivfcs" or "Rajiv Kapoor Kanpur"

I am conspicuously present on Twitter, Linked in, Facebook, YouTube, what'sapp and Google plus.

You can visit the following links to know more about me

www.rajivfcs.weebly.com <http://www.rajivfcs.weebly.com>

www.rajivfcs.blogspot.com <http://www.rajivfcs.blogspot.com>

www.facebook.com/rajivfcs/ <http://www.facebook.com/rajivfcs/>

Whatever might be your age, whatever problem you might be having, studies, health, legal, financial, career or just anything worth worrying about....
Just share with me.  Mere sharing your problem will make you lighter and happier………… and this is nothing for money, no commercial motive involved.

Good day. May God be with you always.

Rajiv Kapoor

BSc, LLb, FCS, IFA

Member ICSI,  KITBA, Rotary Club, Cawnpore club and Ganges club

9839034761

What to Do With Losing Stocks in Your Portfolio

What to Do With Losing Stocks in Your Portfolio
I recently met Shyam my old friend who owns 45+ stocks in his portfolio, most of which are bad businesses – he realizes that – and are deep into losses despite the decent run in the stock market over the last few years.

“What should I do with these stocks?” he asked me. And he is not the only one who’s asked me this question in the past. I have met numerous people over the past few years who have held on to bad businesses and losing stocks in their portfolios, and not knowing what to do with them.

One way people look at such stocks is – “Oh, this XYZ stock is already in a deep loss. What would I get by selling it anyways?”

Another way is – “I will sell this ABC losing stock only when I get my capital back. I don’t mind holding it for the long run.”

Well, this second thought is what creates a lot of “forced” long term investors – people who stay invested in a bad stock for the long term because they don’t think they have an option to sell it.

Nobody Likes Losing
That’s true! So why do people hang on to losing investments?

Because selling feels even worse.

The pain of a loss is substantially greater than the pleasure from a gain, researchers of investment behaviour have found.

People will go to great lengths to avoid pain. Accordingly, our inclination when facing a financial loss is to convince ourselves that the asset is going to bounce back and we will at least break even.

“It’s only a paper loss,” people would tell themselves. “It’s not a real loss until I sell.”

Anyways, one suggestion I gave to my friend’s brother was to hold on to businesses he knows are “obviously” good, and sell the ones he knows are “obviously” bad, irrespective of what those stocks have done in the past.

“Your cost price does not matter when you are looking to decide what to do with a stock in your portfolio,” I told him. “What matters is today’s stock price – assuming it’s a good business and you are looking to buy that stock afresh today – and your expected returns from it over the next 10 years.”

If you wouldn’t buy more of a stock today on which you have a loss, sell it. Don’t wait to “get even.” Chances are there are better ways to invest your money.

No well-managed store keeps obsolete goods in inventory; neither should you keep losers in your investment portfolio.

And if you think “How much more can it fall from here on?”, please note that every 90% loss begins with a 10% loss, and then goes to 20%, then 30% and so on. So, when you realize you’ve made a mistake in the matter of stock selection, it’s better to take the loss sooner, not later.

In his Owner’s Manual, distributed to Berkshire Hathaway shareholders in 1999, Warren Buffett wrote –

Do not think of yourself as merely owning a piece of paper whose price wiggles around daily and that is a candidate for sale when some economic or political event makes you nervous. We hope you instead visualize yourself as a part owner of a business that you expect to stay with indefinitely, much as you might if you owned a farm or apartment house in partnership with members of your family.

Now, “indefinitely” is a long time. Although Buffett was talking about his own company, Berkshire Hathaway, his advice applies to any well-run company. With regard to Berkshire‘s portfolio of companies, he noted in his 1996 letter to shareholders that…

We continue to make more money when snoring than when active. … You simply want to acquire, at a sensible price, a business with excellent economics and able, honest management. Thereafter, you need only monitor whether these qualities are being preserved.

The last sentence gives us the first clue about when to sell: if the company no longer provides “excellent economics” or is no longer run by “able, honest management.” Thus, if your original investment thesis is no longer valid, consider getting out regardless of the stock price.

Time and time again, investors take profits by selling their appreciated investments (“Oh, what if I lose my gains!”), but they hold on to stocks that have declined in the hope of a rebound (“I want to get my money back!”).

If you don’t know when it’s time to let go of hopeless stocks, you can, in the worst-case scenario, see the stock sink to the point where it is almost worthless – a permanent loss of capital.

There is no guarantee that a stock will bounce back after a long decline. While it’s important not to underestimate good stocks, it’s equally important to be realistic about investments that are performing badly (because the underlying business is bad).

Recognizing your losers is hard because it’s also an acknowledgment of your mistake. But it’s important to do that sooner than later.

Don’t be afraid to swallow your pride and move on before your losses become even greater.

“And then,” as I advised my friend’s brother, “Start with a clean slate, and this time, please do it sensibly.”

My Tweets

08.09.2018
False humility is a higher form of ego. When we genuinely realise how little we know, how limited our understanding is and we don’t even know what we don’t know; ego automatically reduces and humility increases.

11.09.2018
Money need not necessarily provide freedom. It only gives option to pursue freedom. For many, financial success further entangles them into slavery.
 

17.09.2018

If future looks certain and clear, it’s likely that we’re underestimating risk.

SHOULD ONE BE FRUGAL ??

SECRETS OF WEALTH CREATION

SHOULD ONE BE FRUGAL ??

Living life is miserable, if you hate your job and can’t afford to quit because you can’t miss even a week without pay.

If you live below your means and save 10% of every paycheck, you’ll have a very good cushion for emergencies within a year. In 5 years, you’ll have roughly 6 months salary saved - that takes away a lot of stress and worry.

Once you learn to live frugally, it becomes a bit of a game. I know which is the cheapest (and good quality) restaurant in my area, which store has the cheapest groceries and which store saves me the most on medicines. I take out cash at the beginning of the month and see if I can stretch it for the whole month. I drive a well maintained 5 year old Nissan Sunny that looks elegant. I am member of Cawnpore Club and hence prefer to use the services of the club to the fullest. Clubs, offer the best and very low cost luxuries facilities to its members, I invest the money so save in mutual funds and have been patiently multiplying even the small sums of the moneys so invested and earn even more.

As a result, I can retire right now and be just fine.

However, I am not “penny wise and pound foolish” - I value my time and don’t take things too far. I’m frugal - not cheap.

I tip well at restaurants, hire the best to consultants and pay my staff well. I happily pay for quality items that will last for years.

This all thought process and life style comes from being an investor - I know how hard it is to make a 10% return so if I can stretch my money by 10% or more that’s like getting a tax free gain.

I never indulge in impulse buying of luxuries.

I am deeply influenced by reading about many frugal millionaires on google - the “quiet money” that will pay for quality, but not pseudo luxury brands. Many people who look rich have a lot of debt and are just “pretending” to be wealthy. One small crisis and they would lose it all.

You may read https://thecollegeinvestor.com/5656/5-millionaire-neighbor-telling/ and such other articles on google. They are very helpful.

Being reasonably frugal helps you build a cushion for the inevitable emergencies in your life. You won’t make smart financial decisions when your back is against the wall and you have to decide which bills to pay or what possessions to sell to make ends meet. The larger that cushion, the more peace of mind you’ll have. And that as they say, is priceless.

RAJIV KAPOOR
CERTIFIED INVESTMENT ADVISOR
9839034761

CAN WE BUY HAPPINESS ??

CAN WE BUY HAPPINESS ??

Lakshmi finishes her work at the construction site and goes to a grocery store.

She realises that she doesn’t have enough money to buy all items.

So she removes the sugar packet from the basket and convinces herself to have sugarless tea till she gets her salary. She leaves disappointingly.

-------------------------

Anita has come to the largest mall in city to buy a new business suit and Breitling watch for his son.

On the way, she sees her favourite bakery selling their best chocolate cake. She wants to buy.

But she knows that she can’t have it because of her diabetes. She leaves disappointingly.

---

Arun is in a faraway city hunting for a job. He feels depressed as nothing is working out for him. He wants to talk to his mother to feel relieved.

But he has very little money to spend on calls. He is sad.

Krish ran away from his house at an younger age. He got into import and export business and made a lot of money.

He has the most expensive phone, but he feels very lonely as he doesn’t have any genuine person to share his happiness with. He is sad.

---

Anant is an athlete.

He wishes he had enough money to buy shoes so that he could run like other athletes.

Kamat is a millionaire.

He wishes that he had legs so that he could walk like other people.

---

The bottom-line is:

happiness = f (money, love, health, time, work, ……)

Happiness comes in different sizes through different variables.

Money is only one such variable. It can buy you happiness sometimes.

At all the other times, it doesn’t matter whether you have one hundred or one million, happiness will still be far away from you.

Rajiv Kapoor

Investment Advisor

9839034761

BE THANKFUL

Sharing one BIG secret of my progress and happiness. I am GRATEFUL.

I am grateful to everyone..... including the inanimate things which I use on daily basis. Being Grateful makes me adjusting, patient and loving..... !!

Be grateful and see how life becomes a romance....!!

Appreciation can change a day, change a life. Your willingness to put it into words is all that is necessary - Margaret Cousins

I try to say THANKS frequently. Initially that was a word. Sometimes with no meaning at all. But having used it for long now and having understood the power in that word, I now mean it to the fullest whenever I utter that word. 

I have seen the sparkle in the eye of the person to whomsoever I have said THANKS.

I try and appreciate when someone including those who are paid to do their job that way ie a servant or a shopkeeper does anything for me. 

It maybe the smallest thing but a little thank you with a smile never hurts anyone. It creates two people happy, who may spread that happiness further creating even more happiness.

Happiness is all that required to conduct our life affairs sensibly or Happiness is life itself. 

Be grateful and Happiness will find its way to your heart and life.

BE A DISCIPLINED INVESTOR

In investing the difference between most brilliant and the dumb is insignificant. What matters is the discipline and not how lucky or brilliant you are.

Be a disciplined investor. Start SIP in Equity Mutual Funds for long term wealth creation.

Take advantage of our highly advanced technologically upgraded e-platform to view all your investments through a single login.

View, manage, transact and monitor all your investments at your fingers ease.

Solid knowledge, professionally qualified, genuine advice, courteous disposition, passionate to help you.... your friend forever

Rajiv Kapoor
Kanpur
9839034761

LIVE SIMPLY

Secrets of Wealth Creation

Live simply... !!

A house and a car to impress friends, relatives and neighbours are the two biggest cause of stress for most of us. Isn't it ??

People want to look rich, instead of being actually wealthy...!!

Things costlier in monetary terms, might not always be valuable...!!

Focus on wealth creation, so that you may live happy and contented. Take care of yourself.

No one will extend financial help to you in the hour of distress.

Consider yourself wealthy even while you lead a simple life.

Wealthy people often practice frugal lifestyle.

Rajiv Kapoor
Certified Investment Advisor
9839034761
Kanpur

RETIREMENT AND YOU

Many people opt for premature retirement, much before they are 60 years of age. This decision could be guided by medical, personal or professional reasons, or a combination of them. If you are also looking at premature retirement, you will need to make several changes, both big and small, in your strategy. You will have to shape your portfolio keeping the new goal in mind. You will also have to adapt to the new realities, both on the emotional and financial fronts. Here is how you should approach the issue and deal with the challenge.

THE BIG PICTURE

Ask yourself the fundamental question: What will I do after retirement? If you don't have a clear answer, you might be in for tougher times. Also, get an idea of the kind of planning and investments required.

An early retirement might also require you to develop some new skills. Have an action plan for it. With rising life expectancy, the non-earning period spans almost 25 years for people retiring at 60. For those retiring early, it could be as long as 35-40 years. A longer retired life will mean a longer battle with the ill-effects of inflation. Accept that an early retirement may entail compromises and tweak your spending accordingly.

KICK-START PLANNING

Your first step would be to get a fix on the retirement age. Next, prioritise your financial goals and have targets (in terms of the money needed) for each of them. Remember, the timing of some of your major financial goals, such as children's higher education and wedding, could well happen after retirement, if you exit prematurely.

INVEST RIGHT

Keep substantial savings in growth investments, such as stocks, equity mutual funds, real estate and gold, as, apart from giving you confidence, they help you create a buffer for uncertain times. Equities help you offset the damage caused by inflation, generating highest returns among all asset classes over the long term. Ideally, put 60-80 per cent of your assets in equities. Earmark each portfolio for a particular goal and, as you near it, start moving funds from volatile equities to less volatile debt assets to preserve the accumulated capital.

ADDRESS HOME ISSUES

By the time your retire, you should own a house and, ideally, have paid off the home loan. If you don't plan to work after retirement, consider relocating to a place with a lower cost of living.

SECURE COVERS

Ensure that you have a pure term insurance plan. Also, get health covers for yourself and your family members. Managing unforeseen risks is equally important while creating wealth and chasing goals.

GET THE SECOND CAREER EDGE

A second career will position you better for meeting your financial goals. This is because besides regular pension, it will also bring you a monthly paycheque. Some of your unmet goals can be met through this income stream, although depending entirely on it is not suggested.

MASTER THE BASICS

When you are planning, assume your age of retirement a little lower than what you would otherwise expect and your life expectancy slightly higher. This will ensure that you have an adequate surplus to meet contingencies in old age. Find out how much you should invest every month to save for an adequate retirement corpus. You can try systematic investment plans (SIPs) that capture the power of compounding. The earlier you start an SIP, the more your money will grow. Keep loans in check, especially unconstructive debt, such as credit card and personal loans.

Last but not least, have a plan B in place to tackle any negative surprises.

Don't Chase Returns, Focus on Process and Quality

How much ever you develop knowledge, there would be many better than you. If you develop emotional balance, there is very less competition.

Overreaching for returns many a time ends in wealth destruction instead of creation. Instead of quick returns, focus on sustainable wealth creation.

Don’t look only at returns, especially short term. Look at the quality of process. Long term outcomes are primarily determined by process quality.

Mutual funds are best option for those who want to harness the power of equity but may lack time or expertise in stock picking

Invest with confidence, take advantage of my little knowledge and experience.

Make your investing a blissful experience with our high-tech e-platform. View and manage all your investments by a single intelligent login.

Rajiv Kapoor

9839034761

ONE WEIRD MONEY SAVING IDEA

Buying a car v/s Uber or ola:

An analysis.

Any car in india cost atleast Rs 6,00,000

Scrap value after six year - Rs 1,00,000

Net amount goes in effective Life of six year Rs 5,00,000

Nos of days of six years is 2200 days So Rs. 5,00,000/2200 = Rs. 230 /day.

Yearly insurance Rs 15000 = Rs 41/day

Daily petrol minimum = Rs 100/Day

After every 3 years tyre & Battery change charge Rs 25,000 i.e. = Rs. 23/day

Yearly maintenance of Car Rs 9000 i.e = Rs 25/day.

If driver employed =Rs 300/day Plus interest loss on Car buying amount @8% on Rs 6,00,000 = Rs 131/day

So total daily expenses just after buying new car = Rs 850/day

So friends until you pay Rs 850 daily to hire a cab you are effectively in gain travelling in uber or ola.

RAJIV KAPOOR
9839034761

WANT TO PURCHASE CAR....

Unbelievable....😳

Did you know that you can purchase a car (say Honda City) after 5 years with an .....SIP of Rs 7000 per month, with yearly top up of Rs 1000 and initial investment of just Rs 1 lac.

SIP Amount:   7,000
Tenure (Months): 60
Rate of Return: 15.00%
Top Up Amount:   1,000

Top Up Frequency: Yearly

Initial Investment Amount:   100,000

Investment Amount:   640,000
Maturity Value:   991,370

Isn't that simple.... !!

I can give you many more such financial planning tips depending upon your future needs and life plans ....!!

Good Day

Rajiv Kapoor
9839034761

TIME IMPORTANT FACTOR IN WEALTH BUILDING

In wealth building time plays important role.

Your risk decreases and wealth multiplies with time. The more you stay invested more you gain, as power of compounding works as income generating machine. So sincere advise to you in all good faith and in keeping all your interest in mind, start early, don’t let the time to elapse for no gain.

Just go through the illustration, below:

Mr Gupta started investing in Equity SIPs when he was of 25 years of age @ Rs 5000 per month.

Mr Saxena was a friend of Mr Gupta and was of exactly the same age.

One day Mr Gupta told about SIPs to Mr Saxena, who became interested in investing in SIPs. He thought that since he is now late in starting his investment journey hence he should be starting @ Rs 15000 per month ie thrice the amount which Mr Gupta was investing.

Both Mr Gupta and Mr Saxena continued in their respective SIPs upto their respective age of 60 years.

Mr Gupta invested Rs 21 lacs over a period of 25 years. On the other hand Mr Saxena invested Rs 27 lacs over a period of 15 years.

At the end of the 60th year Mr Gupta’s wealth stood at Rs 5.70 crores WHEREAS Mr Saxena’s wealth stood at Rs 92 lacs only.

(The above example is based on assumption @ 15% CAGR, which is considered as average return in equity mutual funds in long term)

SO START EARLY ………

To start your SIP make use of our technically upgraded e-platform especially designed for your convenience to make your investing a blissful experience.

With the help of our e-platform you can continuously monitor your portfolio and realign /re-balance it to your goals on a regular basis.

Realigning /rebalancing your portfolio not only reduces the risk but also helps you achieve your goals.

Happy Investing... !!

Rajiv Kapoor
9839034761

IMPORTANT FINANCIAL TIPS

Some very important financial tips that everyone should know ....

1. Avoid buying property on loans as it eats most of your earnings unless you have a clear plan for its repayment. It's important to monitor cash flow. Though, the house will be your asset, your liability will be much more.

2. Start a SIP at a very young age. Try to save atleast 15–25 % of your earnings.

3. Avoid buying a car unless you use it everyday.
.
4. Do not let this sentence scare you. “Mutual fund investment are subject to market risk. Please read the offer documents carefully before investing”. Most people avoid investing in mutual funds just because of this one warning. Yes, there is a market risk, but look at the history and growth of mutual funds.

5. Try having a simple wedding.

6. Atleast 20% of your wealth should be liquid so you can utilize it when necessary.

7. Considering inflation, you are actually losing money if it is in savings bank account. Do not keep huge money in savings bank account.

8. If you invest in stocks, pay due attention.

9. If you invest in stocks have a separate account for delivery investment and Intraday investment. It is easy to monitor this way and also makes tax calculation easy

10. Do not have a belief that property and car make you rich. Its what you save and invest, that is important.

11. Never invest in insurance for returns. Insurance is not an investment option. It is a risk management tool.

12. Never use credit cards for lavish spending. Use credit cards intelligently and for needs not for wants.

13. Cancel all credit cards before you die. Or inform family about all your accounts, credit cards, loans and saving now itself.  Even a small residue will cost your family much.

14. Invest on yourself and then on other investments.

15. Always try to balance your earnings with your savings first, then on  spending and loans. Never take unnecessary loans. Always have reserve and utilise them and unless no other go never take loan.

16. Always have a plan for future events on your career, life, spending and finance.

17. Always have a reserve on your savings for contingency and urgent situations.

18. Your personal life and health are the most important investment. Do have a regular health check and do healthy workout every day.

Stay healthy and live happily.

Rajiv Kapoor
9839034761

IS IT GOOD PRACTICE TO BUY A STOCK AT 52 WEEK LOW ?

Whenever a reputed company falls drastically, people tend to buy it thinking its available at attractive price.

Buying stocks that are in a downward price is the most common mistake among novice investors.

The typical scenario for this particular mistake is an inexperienced investor looking for stocks near their 52-week lows. The novice wrongly assumes that if a stock is near its low for the year then it must be "low" and therefore is an opportune position to be bought.

Often, investors convince themselves that buying a stock from the 52-week lows list is not a risky proposition because of that stock's low price relative to past earnings, book value, or some other measure of value.

But in reality, buying a downtrend stock is always risky, as you are betting against the entire market's assessment of the company's earnings trend. If a stock is making a serious decline it is because market participants know some facts about the company's future earnings potential - facts that you may not be aware of no matter how well you research the company.

 Rajiv Kapoor
9839034761

TRUST PEOPLE - Secrets of Wealth creation

Secrets of Wealth creation:

TRUST PEOPLE

People who created wealth, were people who TRUSTED the most.

They TRUSTED anyone and everyone.

Trust people.... Only handful of people (say 1℅) may be dishonest.... rest are TRUSTWORTHY.... !!

Take away message..... it may be not only difficult and dangerous to trust anyone or everyone, but you can trust something which is regulated by Govt./SEBI and actively managed by a professionally qualified, highly trained, experienced and competent fund manager.... MUTUAL FUNDS...!!

Trust Mutual Funds for long term wealth creation.

To invest in Mutual Funds with extreme ease and to manage your investments later, through technologically upgraded and innovative tools.... Call....

NURTURE INVESTMENTS
98390-34761

An investor’s biggest enemy is the investor himself.

How Does Your Behavior Affects Your Returns on Your Investments?

It is a known fact that the returns of an investment instruments (say mutual fund) and the actual return of an investor vary significantly.

Why is that?

Before we take it up, let’s look at this question.

Is it advisable to continue SIP for ICICI Prudential Dividend Yield Equity Fund Growth Direct Plan (return of -3%) and ICICI Prudential Multi cap Fund Growth Direct Plan (return of 2.1%), Started SIP from May month (this year). Present performance of the funds is too low, Can you provide me a solution to switch with other funds or redeem at this moment.

I get such questions often. You can ignore the amount. I can add a few zeroes and easily it can be a question from another investor. I see it all around including with people I know and care about.

To a large extent, the question also contains the reason for the difference between investment returns and investor returns.

The investor behaviour is in stark contrast to what is required to get market returns. This difference is known as the behaviour gap.

Okay! What should be the ideal investor behaviour? ……….. A systematic approach where the investor would

1. Identify his goals
2. Define his own risk appetite
3. Assess his current financial situation (income, expenses, assets, liabilities)
4. Identify his asset allocation or how you will diversify your portfolio
5. Select the investment instruments in line with asset allocation and risk profile.
6. Review periodically and rebalance investments to derisk the portfolio and maintain asset allocation

But what does the investor actually do:

• Invests a tiny portion of his investment into mutual funds or stocks.
• Invests a disproportionate amount of time on this tiny investment portion.
• Becomes obsessed about the highest returns.
• Acts on hot tips promising 15% returns instantly.
• Churns frequently from one fund or stock to another.

Goals, risk, asset allocation are all thought of some hi-funda concepts with no role in this investor’s life. Consequently, his own behavior neutralizes the returns which his investment could have generated.

With zero focus on risk, asset allocation, diversification, rebalancing and the goals, the investor keeps running around like a plucked chicken.

Most investors lose money as well as confidence. They give up any hope of building a sensible and smart portfolio.

An investor’s biggest enemy is the investor himself.

And it is so difficult to beat this enemy.

It is not impossible though.

How to Change Your Behaviour?

This is how it can be done.

• Figure out your goals and the requirements and how will you diversify your portfolio. Then go after it like it is the only thing that matters.
• Save more and invest more – Specially, in the initial years of your life. More than changing funds, this will help you build the big number to let compounding magic work for you.
• Have patience. Stop expecting a mutual fund/stock to deliver immediately.
• You can do without generalised advice from friends, colleagues, family, blogs, portals, magazines to build their own portfolio (yes, it applies to this blog too). You have to put your own context to your investment decisions. An FD can be good for one and a debt fund for another.
• Don’t just try to ‘do it yourself‘. Also invest time to learn how to ‘do it yourself‘. Getting some help and advice doesn’t hurt.

Easier said than done.

What is your own behaviour with your investments? Are you working on changing it? Do share with us in the comments.

Rajiv Kapoor

9839034761

Why investors do not listen to good advice?

Many investors say they can't take risk but still go ahead and invest randomly for short-term gains  

Of late, in my sessions, I have been getting a lot of queries about bitcoins and cryptocurrencies.

I recently addressed a group of middle-aged college teachers who were averse to investing in equities but were keen to start investing in bitcoins as the next best investment after real estate.

When I informed them about the risks and tried to advise them against cryptocurrencies, I was met with disbelieving looks and the general attitude was of ‘we know it all’.

One of my co-worker’s 75-year-old uncle, who had invested in traditional investments all his life, called her to ask her to check if he had shortlisted the right funds for investment. All the funds being considered were the best performers of the past 1 year and included small-cap and sector funds.

To make matters worse, he was planning to hold these investments only for 2-3 years. Despite her warning him about the pitfalls of this strategy, he invested in these funds saying they had given 30% returns in the past 1 year and even if there is some volatility, he would still make 15% returns.

What amazes me is that time and again people continue to make the same mistakes. They say they can’t take risks but buy at high and sell at low, driven by short-term returns on instruments simply because they feel they have lost out on past returns.

As a financial educator, I find people to be very defensive about their investment choices. The same individuals would be buying stocks based on advice from relatives or co-workers or based on stock tips on TV channels and websites. In these cases, good advice is not believed, as people want to justify that they have done the right thing.

The same is true for traditional insurance investments. People don’t like hearing that they have invested in sub-optimal instruments, which had been the ‘go to’ investment for many decades. Generally, if the advice is in line with a person’s thinking, it is accepted; if it is not, then most would not believe it.

The issue is also that people like to hear about complex things. When they hear simple and good advice, they feel it is too basic. In my sessions, one of the most common questions is what is the right time to invest. And I am met with stares when I talk about remaining invested for the long term in simple instruments like mutual funds.

Many investors are also looking at different products to invest into each time and find the thought of investing in the same product regularly, boring.

Sometimes, individuals feel overwhelmed by matters of finance and are likely to do what they want to, despite getting good advice. With so much information on the internet and from other sources, people get confused, which leads to wrong decisions even though they may be getting the right advice, as is the case with my co-worker’s uncle.

Essentially, people don’t listen to good advice because: 

• they feel they know better, even though they have no experience,
• they don’t like hearing negative things about what they have invested in,
• they think complex-sounding investments are exotic, and
• they are confused.

Unfortunately, most investors learn the hard way and only a few actually make any change. Investors are happy to blame product manufacturers for losses, rather than their own behaviour.

Most investors seldom think of a financial plan or goal-based investing. In the case of college teachers, when asked about their goal for investing in cryptocurrencies, the common response was: ‘to get good returns’.

And this is the way most people invest in India, without a goal in mind.

Unfortunately, the number of financial planners is low and investors are not willing to pay for financial advice.

Government and the regulator needs to ensure that the critical subject of personal finance is included as part of the curriculum during college studies.

In the meantime, financial advisers and educators should take heart from this Agatha Christie quote: “Good advice is always certain to be ignored, but that’s no reason not to give it.”

Rajiv Kapoor

9839034761

KEEP PACE WITH TIME - INVEST IN MUTUAL FUNDS

आज से 5 या 10 साल पहले ऐसी कोई ऐसी जगह नहीं होती थी जहां PCO न हो। फिर जब सब की जेब में मोबाइल फोन आ गया, तो PCO बंद होने लगे.. फिर उन सब PCO वालों ने फोन का recharge बेचना शुरू कर दिया।अब तो रिचार्ज भी ऑन लाइन होने लगा है।

आपने कभी ध्यान दिया है..?

आजकल बाज़ार में हर तीसरी दूकान आजकल मोबाइल फोन की है।
sale, service, recharge , accessories, repair, maintenance की।

अब सब Paytm से हो जाता है.. अब तो लोग रेल का टिकट भी अपने फोन से ही बुक कराने लगे हैं.. अब पैसे का लेनदेन भी बदल रहा है.. Currency Note की जगह पहले Plastic Money ने ली और अब Digital हो गया है लेनदेन।

दुनिया बहुत तेज़ी से बदल रही है.. आँख कान नाक खुले रखिये वरना आप पीछे छूट जायेंगे..।

1998 में Kodak में 1,70,000 कर्मचारी काम करते थे और वो दुनिया का 85% फ़ोटो पेपर बेचते थे..चंद सालों में ही Digital photography ने उनको बाज़ार से बाहर कर दिया.. Kodak दिवालिया हो गयी और उनके सब कर्मचारी सड़क पे आ गए।

आपको अंदाजा है कि आने वाले 10 सालों में दुनिया पूरी तरह बदल जायेगी और आज चलने वाले 70 से 90% उद्योग बंद हो जायेंगे।

चौथी औद्योगिक क्रान्ति में आपका स्वागत है...

Uber सिर्फ एक software है। उनकी अपनी खुद की एक भी Car नहीं इसके बावजूद वो दुनिया की सबसे बड़ी Taxi Company है।

Airbnb दुनिया की सबसे बड़ी Hotel Company है, जब कि उनके पास अपना खुद का एक भी होटल नहीं है।

US में अब युवा वकीलों के लिए कोई काम नहीं बचा है, क्यों कि IBM Watson नामक Software पल भर में ज़्यादा बेहतर Legal Advice दे देता है।

*समय के साथ बदलने की तैयारी करो।*


HMT *(घडी)*
BAJAJ *(स्कूटर)*
DYNORA *(टीवी)*
MURPHY *(रेडियो)*
NOKIA *(मोबाइल)*
RAJDOOT *(बाईक)*
AMBASDOR *( कार)*

 मित्रों..इन सभी की गुणवक्ता में कोई कमी नहीं थी फिर भी बाजार से बाहर हो गए.!!
कारण...
*समयके साथ बदलाव*
*नहीं किया.!!*

इसलिए...
व्यक्तिको समयानुसार अपने व्यापार एवं अपने
*स्वभावमें भी बदलाव*
करते रहना चाहिएँ.!!

👉 *Update & Upgrade*
*Time to Time.!!*

समयके साथ चलिये और सफल रहिये

म्यूच्यूअल फण्ड अपनायें और समय के साथ चलें

Rajiv Kapoor
9839034761

What are Contra Mutual Funds

What are Contra Mutual Funds

Contra mutual Funds are equity oriented mutual funds whose investment objective is to invest in the shares of the companies or sectors which are under-performing mainly due to the short term concerns.


The fund manager follows the contrarian investment approach i.e. buying shares of the companies whose share prices are depressed due to short term concerns. The demand of these shares is very less as they are usually rejected by other investors


These under-performing stocks are usually available at lower price than their fair value or intrinsic value and are likely to perform well in the long run as market price of a share will always tend to move towards its fair price or intrinsic value creating opportunities for traders to generate superior returns in the long run


Contra mutual fund is out of favor or against-the-wind style of investing. Fund managers select companies which are fundamentally strong but whose true potential is not reflected in its share price. The concept is to buy shares at a price lower than its fundamental price or intrinsic value.


Please note that contra mutual funds may not give superior return in the short term but are ideal for investors who have investment horizon of medium to long term. Also, the reward risk ratio is quite high for investors in the long run.


Rajiv Kapoor
Investment Advisor
9839034761

HEALTH INSURANCE

Not having enough health insurance

Healthcare costs in India are increasing at a distressing rate. Based on some estimates, the annual healthcare inflation is the range of 15 – 25%. A hospitalization for a serious illness can cost Rs 5 Lakhs or above and long term hospitalization can be a tremendous financial burden on households.

While health insurance is essential for all, it is even more relevant for senior citizens because health risks increase with advancing age. Employees who are covered under their company’s group health insurance policy usually do not worry about health insurance but you should know that, you will lose your health cover on retirement.

So, it may be prudent to buy individual mediclaim or family floater plan before retirement even if you are covered under your employer’s group health insurance scheme, so that you can continue with the same health insurance plan even after retirement.

We spend so much on things that spoil our health such as fast food, junk food and alcohol and think

so much when it comes to payment of premium for a health insurance policy ……………. ???

Buy a health insurance policy for yourself and your family. You never know of tomorrow.

Know more from me……… !!

What will be the best mutual funds over the next 3 years, with a moderate risk in the market?

 

One of the best strategies to deploy in markets and one which comes with moderate risk is Dynamic Asset Allocation Funds.

Asset Allocation Funds or Dynamic Asset Allocation funds are best to invest in a market for people looking for Moderate Risk.

How Do Dynamic Asset Allocation Funds Work?

Simply put Dynamic Asset Allocation funds work on the principal of “Invest more in Equity when the Markets are low and Invest less in Equity when the markets are high”.

1.)    These funds change their Debt to Equity Asset allocation accordingly.

For example, at a stage of markets these funds could have Debt: Equity ratio as 60:40 and if markets correct (go lower) then it can change to 30:70.

All this is done by the fund manager themselves based on an index which tracks the expensiveness of the markets. The index and corresponding Debt : Equity Allocation could be like this. (please note that this illustration is from an indicative stand point only)

2.) Apart from the fact that you will buy more equity when markets are down, another distinctive advantage is that these funds book profits automatically for you. Once the markets start moving up, the fund managers sell equity and buy more debt and hence it results in profit booking for the investors.

3.) These funds come with equity taxation and the long term capital gains tax are zero. Many of these funds use Equity arbitrage as a strategy to ensure that they remain in the 65% zone for Equity + Equity Arbitrage to get Equity funds taxation.

We have created a Portfolio of the two best Dynamic Asset Allocation fundsavailable in the market. You can start SIP or do a lump sum investment in these funds anytime.

But mind you that these funds are basically conservative in nature and may not give very good returns vis a vis the sensex

Regards

www.rajivfcs.weebly.com

Rajiv Kapoor

Practicing Company Secretary

Kanpur

9839034761

Fixed Deposits Vs Debt Mutual Funds: Which is better?

Fixed Deposits Vs Debt Mutual Funds : Which is better ?

When it comes to financial investments, most individuals are averse to taking risks.

Who would want to lose their hard-earned savings due to misinformed financial decisions?

Most prefer guaranteed returns and avoid volatility. It is no wonder that a bulk of Indian household savings are in bank fixed deposits.

Those who venture out in search of higher returns, fall for Ponzi schemes that promise “high return on capital with no risk.” Thousands of crores of hard-earned money has been lost to chit-fund scams like those of the Rose Valley Group and Saradha Group.

Others may invest in corporate fixed deposits that offer a high interest rate, but these are not backed by strong financials or the management’s intent to repay. In the past, companies such as Unitech, Jaiprakash Associates and companies promoted by Yash Birla that have either delayed or defaulted on payment of interest or principal or both.

Sadly, most individuals are unaware of the benefits of mutual funds. While mutual funds offer several asset classes to choose from, debt mutual funds are a good alternative to bank fixed deposits. However, you need to choose wisely.

With declining fixed deposit rates, the interest in different investment avenues is growing. This article, outlines the key differences between fixed deposits and debt mutual funds while covering the common questions you may have about the two.

What are debt mutual funds? How are they different from fixed deposits?

Unlike fixed deposits, where the rate of interest is known before investment, debt mutual funds diversify your investment over money market securities such as commercial papers and certificate of deposits, government securities, corporate bonds or corporate deposits. The allocation to these securities depends on the investment objective of the scheme.

To put it simply, under fixed deposits, you directly invest your money with the issuer. In debt funds, you invest the money indirectly through the fund house. The fund manager decides in which securities to invest, keeping in mind the investment objective of the scheme and focusing on high risk-adjusted returns.

How do debt mutual funds work? Do they pay a fixed interest like fixed deposits?

While fixed deposits either pay or accumulate the interest at a set date, the return of debt mutual funds is represented by their Net Asset Value (NAV).

As the underlying securities are traded in the market, similar to stocks, the value fluctuates depending on the liquidity and the direction of interest rate. Thus, when interest rates rise up, the value of the bonds and in turn your NAV falls. When rates head lower, the reverse happens. Thus, when RBI cuts interest rate, the value of the debt fund investment is expected to increase and earn a higher return.

As these are interest bearing securities, the yearly interest is divided by 365 (no. of days in the year), and the debt fund’s NAV goes up daily by this small amount.

Under debt funds, there are dividend options also available, which can be monthly, quarterly, or yearly. Therefore, similar to the interest pay out of fixed deposits, you may choose one of these options if you are looking for regular income. Please note, that the dividends paid out are post deduction of dividend distribution tax (DDT) of 28.84% (including surcharge and cess). Hence, this option is beneficial only if you are in the highest tax bracket.

Do debt mutual funds earn a higher return than bank fixed deposits?

There isn’t a straight answer to this question. As explained earlier, the returns of debt mutual funds are market linked. Therefore, the returns vary based on the schemes investment mandate, prevailing market conditions, and tax regime.

Schemes that invest in money market instruments or debt securities with a maturity period of a few days to some months, such as ultra-short term funds or liquid funds, carry a low risk; hence, the returns too may be lower. However, certain schemes in the category are able to deliver a higher return than bank FDs if the market conditions are conducive.

Short-term debt schemes invest in maturity assets of up to 1 year or more. Here the returns, though higher, may be more volatile than liquid schemes. Over a period of 2-3 years, most short-term debt schemes have the potential to deliver a higher return than bank FDs.

Income funds invest in securities of various maturities. Under most such schemes the portfolio is skewed to instruments with longer maturity. Income funds and similar long-term debt funds are more volatile, and the interest rate cycle plays a crucial role. In a period of rising interest rates, debt funds that invest in longer term securities may not offer the best returns; hence, these may trail the returns of bank deposits. However, in a falling interest rate scenario, these same schemes will be able to deliver high returns on investment.

What about the tax implications?

Debt mutual funds and bank fixed deposits are taxed differently.

The interest earned on bank fixed deposits are added to your total income (under the head ‘income from other sources’) and taxed as per your income tax slab. While in the case of debt mutual funds, if you redeem your investment before three years, the gains (also known as Short Term Capital Gains (STCG)) are added to your income and taxed accordingly.

For redemption of units which are held for a period of three years or more, the Long Term Capital Gains (LTCG) are taxed at a rate of 20% with indexation. The indexation benefit, aids to lower the tax impact, and is useful, especially for those in the higher tax brackets… and this is where debt funds score over bank fixed deposits. Due to a lower tax on investments greater than 3 years the debt fund tend to score a higher post-tax return as compared to bank deposits.

It is always important to keep up-to-date with the prevailing tax laws. If the Government changes the tax rules – like it did in 2014 – the benefits may get impacted. Earlier, withdrawal from debt funds attracted LTCG tax of either 10% (without indexation) or 20% (with indexation) and the holding period to qualify as long term was just 1 year.

What are the risks associated with debt mutual funds?

Debt funds primarily run two risks: the interest rate risk and the credit risk.

The market value of tradable securities held in a debt fund drops when the interest rates in the economy rise, and as a result, the Net Asset Value (NAV) of a fund drops. Since securities are redeemed at par value on maturity, those who can hold out until maturity don’t suffer much, but speculators who try to time interest rate movements do.

The credit risk, or risk of default, is a much bigger concern for debt fund houses. This is because, if the company issuing securities goes belly up, debt funds incur losses that can’t be recovered easily. Therefore, it is essential to check if your fund is investing in highly rated debt securities. Low rated debt securities offer a higher interest rate, but with higher risk.

Credit opportunity funds that adopt an accrual strategy benefit from this, with an increased credit risk to generate a higher yield. Schemes that have a high concentration of low quality assets should be clearly avoided. Liquidity too, is a cause of concern in low-rated debt securities. It can get worse if the credit rating deteriorates and the fund manager is unable to sell his holdings.

In the past, JPMorgan India Short Term Income Fund and JPMorgan India Treasury Fund bore the brunt of its corporate debt holding in Amtek Auto. The Amtek Auto security was de-rated to junk status, which led to severe mark-to-market losses for the fund. Due to the lack of buyers, the fund was unable to sell its holding.

At the same time, it is important to note that fixed deposits too are not devoid of risk. While your investments in well-known banks may be relatively safe, you should avoid entrusting your hard-earned money to shady and not-so-strong co-operative banks. Many cooperative banks in India have gone bust in the past; hence, it is best to stay away.

If you are opting for a corporate fixed deposit of an NBFC or others, due diligence is critical before parking your hard-earned money. Corporate FDs are not guaranteed investments; hence, you need to check the credit rating and financials of the company before investing.

Where should you invest—Debt mutual funds or fixed deposits?

Remember, compared to banks FDs and some Small Saving Schemes, the rates for which have been a downhill, investing in debt mutual funds can prove more rewarding and tax efficient.

But you ought to take enough care when selecting winning debt mutual fund schemes for your investment portfolio, because debt funds aren’t risk-free. It is therefore suggested that you should seek guidance of your financial advisor before you invest in any debt fund.

On the other hand, if you don’t have a stomach for risk and prefer stable and guaranteed returns, then stick to fixed deposits. Open an account with reputed private or public sector banks where the risk of going bust is low.

In my view it would be imprudent to invest at the longer end of the yield curve, which is in long-term debt funds holding longer maturity debt papers. It is vital to note that most of the rally has already been captured at the longer end of the yield curve.

Going forward, if RBI increases policy rates by any chance (enabled by the change in monetary policy stance from ‘accommodative’ to ‘neutral’) and if inflation pops up its ugly head, it could be perilous for your investments in long-term debt funds.

So, it would be better to deploy your hard earned money in short-term debt funds if you’re risk averse, but ensure you’re giving due consideration to your investment time horizon.

For an investment horizon of upto 2 years, consider investing in short-term debt funds.

If you have an investment horizon of 3 to 6 months, ultra-short term funds (also known as liquid plus funds) would be the most suitable.

And if you have an extreme short-term time horizon (of less than 3 months), you would be better-off investing in liquid funds.

Don't get swayed by distributors, relationship managers, or wealth managers who push hybrid mutual fund schemes such as Monthly Income Plans (MIPs) or Equity Savings Schemes (ESSs), or balanced funds as alternatives. These schemes include an equity component in their endeavour of wealth creation, which may be unsuitable if you were to evaluate investment avenues against bank FDs, due to the high risk involved. When you invest, ascertain your risk profile prudently; so as to have suitable investment avenues in your portfolio.