There are many different mutual fund investments that people can choose from. There are some good reasons to invest in mutual funds, like getting help from a qualified asset manager. Investors trust fund managers to choose investments that will be good for their money. If you're an investor, it's best to know how fund managers do their jobs. Here are a few factors that impact the returns from a mutual fund. 1. The cost of running a fund The expense ratio, which is also called the fund management fee, is a typical fee that the fund house charges investors to cover costs like operating costs, wages, compliance costs, administrative fees, etc. It usually shows how much of the investor's mutual fund holdings it is. Most hedge fund companies use the 2/20 model, which lets them take 2% of the fund's AUM as a cost ratio and 20% of the fund's profits as performance fees. 2. Window dressing illusion Mutual funds sometimes use "window dressing" to hide the fact that they aren't doing well by making it look like they are. They don't have to explain what happened to make them perform badly. Before putting money into a fund, a potential investor should carefully look at how the fund has done in the past and how it invests overall. 3. Indexing as a way to lower risk Investors prize fund managers' stock-picking skills. But now, a lot of mutual funds invest in a portfolio that is like an index. It lets them get similar returns and lowers their risk. But if they charge you a management fee, this may not be the best way to invest. 4. Giving short-term growth more importance than long-term growth Fund managers may put more emphasis on the fund's short-term growth to make it look more appealing to individual investors. This lack of long-term thinking could force the fund manager to ignore the bigger picture and focus only on how the next quarter will go. The short-term goals of a fund may affect how you do as an investor and what your financial goals are. 5. Incentives Mutual fund companies need to increase AUM to grow their market share and profits. They often use advertising and marketing methods to get people to invest. It leaves the manager of the fund with little time to run the fund. But none of these things improve how well the fund works. By investing in index funds that are passively managed, small investors can avoid being affected by the fund manager's goals. How to figure out how well a mutual fund did Set goals for your investments Before you make an investment, you should know what you want to get out of it. Finding the answer to the question is the first step in choosing the best mutual funds. Choosing between mutual funds The best way to find the best mutual funds is to compare the returns of several similar funds. Check out how things worked in the past Even though a fund's past performance doesn't tell you how it will do in the future, it might be helpful to know how it has done in different market conditions. How they did compare to the index Even if the fund didn't do well, management fees still have to be paid. So, before you put money into a fund, compare the fees. Most of the time, better funds will cost you more. Risk-adjusted returns Mutual funds have to take your capital risk into account. When a fund makes more money than its overall risk, this is called "risk-adjusted returns." Conclusion As an investor, you should know how standard fund management works so you can have more control over your money. Start investing in mutual funds with Zebu right away by opening a demat account.
Jul 14, 2022
September is an exciting month for the IPO market. Here are all the upcoming IPOs for this month. Keventer Agro The company sells a wide range of products under many different brands and categories. As of March 2021, they were involved in the value chain and had more than 90 SKUs in the fresh, frozen, and ambient long-shelf-life product categories. The Keventer Agro IPO is made up of Rs 350 crore in new shares and 1 crore shares from existing shareholders. Capital Small Finance Bank In 2016, Capital Small Finance Bank became India's first small finance bank. In March 2021, it will be one of the top SBFs in terms of asset quality, cost of funds, retail deposits, and CASA deposits. Capital Small Finance Bank has a diverse portfolio with a large book value across several types of assets. The bank has a secured loan rate of 99 percent, which is the highest among its competitors. It's a first public offering. Sresta Nature Bioproducts The business, which is based in Hyderabad, sells packaged organic goods. The Sresta Natural Bioproducts IPO includes both new shares and shares from existing shareholders. The company plans to sell new shares to raise Rs 50 crore to cover working capital needs and pay off or repay some market loans. Landmark Cars The car dealership is ready to start an initial public offering (IPO) of Rs 762 crore, which will include both new shares and an offer to sell equity. The net money made from selling new shares worth Rs 150 crore would be used for general business goals and to pay back or pay off any market loans. Tracxn Technologies Tracxn Technologies helps new businesses set up customer service that works well by giving them statistical information about their customers. The IPO offer from Tracxn Technologies is a full sale from the shareholders who already own the company. Ola Cab The company is one of the biggest app-driven cab services. It has 250 locations in India, New Zealand, the UK, and Australia where it helps people get around. Through the app-based business, customers can get in touch with drivers of motorcycles, e-rickshaws, cabs, and taxis. The value of the IPO would be about Rs 1500 crore. Elin Electronics The company is a major player in the electronics manufacturing services (EMS) sector, with a 12 percent market share in Fiscal 2021. Manufacturers of lights, fans, and small kitchen appliances can get full product solutions from Elin Electronics. They were also the first to make motors with a fraction of a horsepower. In the IPO, fresh shares worth Rs 175 crore and OFS stocks are put together. Droom Technology They run a business that makes it easier to buy and sell cars online by using technology and data science. Droom Technologies is the only company in India that offers a completely online transactional solution and has the largest selection of cars for sale online. About 1.15 million cars, bikes, and other vehicles, both new and used, are listed on their platform. In the IPO, current shareholders can offer to sell their shares, and new issues of Rs 200 crore are also being made. One Mobikwik System Mobikwik is one of the largest companies that offer "Buy Now, Pay Later" services. Fintech is an important part of the field because it makes everyday mobile transactions easy and gives people the option to "buy now and pay later." The public offering includes both primary shares and an offer to sell. Skanray Technologies They are the best at making medical devices and they design, develop, manufacture, and sell high end equipment. The primary issue includes new shares worth Rs 400 crores and an offer from current shareholders to sell their shares. Gemini Edibles and Fats The company makes, sells, and sends out edible oils and fats. Gemini Edibles has had one of the segment's fastest growth rates. In the south Indian states, they are the market leaders when it comes to making sunflower oil under the brand name Freedom. Ixigo Ixigo makes it easy to book travel, tickets, and hotels online. They help travelers make smart travel decisions by using innovations in artificial intelligence, machine learning, and data science. The company has been given permission to start an IPO for Rs 1600 crore. API Holdings With respect to gross merchandise value (GMV) in Fiscal 2021, they are India's largest healthcare provider. API Holdings runs a business that is integrated from beginning to end. This lets them serve all of the stakeholders in the healthcare value chain. Emcure Pharmaceutical The company is one of India's biggest pharmaceutical companies. It develops, makes, and sells drugs around the world in a number of important therapeutic areas. Final words IPOs can be a great way to invest and give investors a chance to diversify their portfolios. But before putting money into a new company, you must do your homework and research. Invest in an initial public offering (IPO) only if you know the company and understand its value. Without doing research, investing in an IPO can be risky. With Zebu, you can invest in IPOs that will happen in September 2022. Sign up for a free Demat account.
Jul 13, 2022
No single investment strategy is perfect. No single investment strategy is the "end-all, be-all" answer to all of your needs. Because of this, investors often mix and match two or more investment strategies to find a combination that works for them. This mix gives the investor a benefit in one of two ways. First, it can be done by combining the good things about the different strategies so that the good things outweigh the bad things. In a second way, one or both of the strategies that make up the combination cancel out the problems of the other strategy. One way to invest in more than one type of stock is called GARP. Growth at a fair price is what GARP stands for. GARP is an investment strategy that combines Value Investing and Growth Investing to give an investor "the best of both worlds". So, to understand the GARP strategy better, we must first learn about Value Investing and Growth Investing. So let's get down to business. Value Investing Value investing is like getting a good deal when you shop. Let's say you go out to buy something, anything. You can buy a low-quality product for a low price, or you can buy a well-made product that is more expensive than the low-quality product but less expensive than the regular market price of the good. Which one do you want? Clearly, the second one is the winner. Yes, it would cost more than the low-quality product, but the fact that it would be better and cost less than usual makes up for the price difference. Well, value investing is when you buy shares in companies that are strong at their core, which means they run their business well. Share prices that are higher than, say, penny stocks are a natural result of this performance. Because of this, you buy these shares when their prices are lower than what they should be. As the market straightens out, the share price will rise to what it should be, and the investor will enjoy capital appreciation. Value investing usually involves buying shares of companies that have been around for a long time and have a strong position in the market because of how they do business. The idea behind value investing is also that the efficient market hypothesis is not true. This means that shares can be overvalued or undervalued because their prices don't reflect all the market conditions and facts that affect their prices. Value investors try to figure out what a share's fair value or "intrinsic value" is. An investor can use a number of different fundamental analytics, but Price to Book (P/B) Ratio, Price to Earnings (P/E) Ratio, and Free Cash Flow are some of the most common ones. Growth Investing Growth investing is a way to make money by letting the value of your investments go up. This capital growth happens because the company, whose shares are called "growth stocks," has new technology and services that help the business run. Access to newer technology and services gives the business an edge, which means it can make more money than its competitors in the industry or even in the market as a whole. Most of the time, the extra money doesn't go to the shareholders. Instead, it goes back into the company's capital to give it more resources to use the better technology and services. There are two main ways in which growth investing is different from value investing. First, growth stocks usually belong to new companies that have a lot of room to grow because they are in markets that haven't been fully explored yet. Because of this, these stocks are a riskier bet than those that are based on value. Another difference is that growth stocks are often overvalued because of their high demand, which comes from the fact that they have a higher chance of making money. When it comes to investing in stocks for growth, investors pay attention to five key things about the stock in question. These are the company's past and future earnings growth, its profit margins, its return on equity, and the performance of its stock price. Investing in GARP GARP stocks are mostly growth stocks that have been put through some value investment stock filters. This means that investors are looking for stocks with high growth rates to add to their portfolios. The price of the share affects how value investing affects how stocks are chosen. This means that a GARP stock is a growth stock that is undervalued. GARP investing doesn't have any rules about what metrics investors should look for when buying shares of a company. The Price/Earnings to Growth (PEG) ratio is an important metric for this strategy. If the ratio is less than 1, the price is in line with the growth of the business and not too high, like with growth stocks. Filtered Goodness As was already said, no investment plan is perfect. So investors shouldn't put any of the above strategies on a pedestal that is too high. The GARP investing strategy is a mix of ideas that has become popular because it works better than other mixes. This doesn't mean that any of the less popular strategies are less useful or that GARP isn't a good filter. So, investors should always do their homework and use or ignore pre-made strategies based on their goals, risk tolerance, time horizons, and many other factors. Do you use any combinations of investing styles or strategies that have worked well for you?
Jul 12, 2022
What do we mean when we say that a stock is defensive? As the name suggests, these are the stocks you can count on when the market is moving around a lot. These are the stocks that don't lose as much value when the market goes down as most high beta stocks. So, what do defensive stocks look like, and what are the benefits of having defensive stocks in your portfolio? Let's look at some of the things that defensive stocks have in common and some examples of defensive stocks in India. 1. Things that never go out of style When you talk about traditional industries that never go out of style, food, FMCG products, etc. come to mind. Food and cleaning products are used in different ways, but what they are used for doesn't change much. In fact, the only time that these products become more popular is when the economy gets richer. Because of how stable their demand is, they tend to be less volatile and can keep their price and returns even when times are bad. Hindustan Unilever, ITC, Marico, Britannia, and Havells are all great examples of Indian defensive stocks. Of course, they might not give you the same kind of return that most high beta stocks do, but that's not the point. The main idea is to put your attention on stocks that can protect the value of your portfolio when times are bad. 2. Businesses that are always in demand This can be a continuation of the last point, but there are many people who can benefit from this trend. Aside from food and FMCG, this group also includes stocks in pharmaceuticals and cement. For instance, the need for cement can be put off, but it can't be eliminated. Because of this, cement stocks tend to keep their value even when the market is bad. It's an example of prices changing to reflect more realistic growth expectations. But there hasn't been much of a drop in demand for these goods. 3. Dividend yields that are appealing Stocks with a high dividend yield are a good example of defensive stocks. Most of the time, defensive stocks are those with dividend yields of 6–7% or more. Because they generate annuity income, the attractive dividend yield makes them very attractive at lower levels. In India, this category includes stocks like NTPC, Coal India, NMDC, REC, Chennai Petroleum, IOCL, and BPCL. They come from many different industries, but what they all have in common is a good dividend yield. In many cases, the yield on the dividend is better than the yield on the bond itself. 4. Big businesses with strong business plans We've seen this happen with companies that have been around for a while and have grown to the point where repeat business doesn't take much work. In this group are companies like TCS, Infosys, Reliance, Maruti, etc. Even when these companies' stocks go down on the stock market, investors know that they will eventually go back up. And over the years, these stocks haven't let their investors down very often. When the market is bad, these stocks can be good places to put your money. They might not give you the kind of returns that many midcaps do, but like most defensive stocks, they do a great job of protecting you from the risk of going down. 5. Priced conservatively in terms of P/E and P/BV One of the most common characteristics of defensive stocks is that their P/E and P/BV ratios are still relatively low. If you look at companies like Reliance, IOCL, BPCL, and NTPC, you'll see that most of them are priced in a way that makes them seem like good deals. Of course, most of the time there isn't much room for growth or the size works against them. But you can be sure that these stocks will do pretty well even if they go down. Also, when the market goes down, they make a case for buying, and you can be sure that these stocks will go up again in the long run. Since valuations change quickly in their favour, having a low P/E and P/BV is an added benefit. 6. The business doesn't really follow a cycle Commodity businesses like steel, aluminium, and zinc can be pretty cyclical because the prices of metals are largely based on the international prices on the raw materials. When the economic cycle goes against them, there is a big chance that prices will go down. Second, when these stocks go down, it takes a long time for them to get back to where they were before. This is because commodity cycles tend to last longer. Because of this, most metals and commodities stocks are not good choices for a defensive bet. Even if they have good price-to-earnings ratios, they do not become basket cases. More often, defensiveness comes from stocks that have a moat that sets them apart. 7. Low beta stocks are good defensive bets Most of the time, stocks with low betas are those that are good for protecting your money. Think about the Indian Nifty. Stocks with Betas that are much lower than 1 include Cipla, ACC, Bajaj Auto, Hindustan Unilever, IOCL, and Infosys. Even though these stocks may not do well in bull markets, they tend to hold their value better when markets are down or too volatile. On the other hand, stocks with high betas like Bosch, Eicher Motors, ICICI Bank, and Adani SEZ are not good defensive bets. They are more likely to be played in markets with a lot of action. When the market is bad, defensive stocks are a good way to protect your money. That is the whole point of defensives!
Jul 11, 2022
It can be hard to make money on the stock market. Some stocks are very sensitive to economic slowdowns and downturns, while others may be profitable no matter what, making them fairly recession-proof. The idea that economic activities change all the time through times of boom and bust is called "cyclicality." Everyone knows that the Covid-19 pandemic has a cyclical effect on the stock market. During the first economic downturn, stocks that were sensitive to the economy went down. As the economy began to get better, most companies' stock prices went back up. This upturn was also helped by government programmes and interest rates. This article explains what cyclical stocks are and how they work. A cyclical stock is one whose price is affected by big changes in the economy or by changes that happen over time. Cyclical stocks tend to move with the expansion, rebound, recession, and recovery of an economy. Most cyclical stocks are shares of companies that sell things that people need every day. These are things that people buy more of when the economy is doing well and less of when it is not. Companies that make or sell durable goods make or sell physical items that are expected to last at least three years. Non-durable cyclical stocks, like clothes and ready-to-eat foods, have shorter useful lives, go bad quickly, or are used up quickly. Nike, which makes sportswear, is an example of a company that works in this segment. Companies offer cyclical services that make it easier for their customers to travel, have fun, and do other fun things. Netflix is one of the most well-known businesses in this field. Some of the most popular cyclical stocks in India are automakers like Maruti Suzuki India and Tata Motors, as well as banks like HDFC Ltd. To give you a quick idea of some industries that tend to go through cycles, here are a few well-known and easy-to-understand examples: Airlines and Hotels: When the economy is doing well, both people and businesses are more willing and able to spend money on airline tickets and hotels than when times are tight. Retail: When the economy is weak, people tend to spend less on goods they don't have to buy. But businesses that sell mostly necessities are not as cyclical. Restaurants: When the economy is bad, people tend to eat at home more, which hurts F&B stocks. Automakers: When the economy is bad, people tend to keep their cars longer and buy new cars more often when the economy is good. Most tech stocks go up and down in cycles. Banks: During a recession, there is less demand for mortgages, auto loans, and credit cards, and more people who already have loans have trouble paying them back. Also, interest rates tend to go down before and during recessions, which makes it harder for banks to make money. Manufacturing: When the economy is bad, demand for physical goods tends to drop, which hurts the companies that make them. Many of the above-mentioned industries, like retail and the auto industry, deal directly with customers and are therefore part of the consumer cyclical stock India sector. Different stocks and cycles Most of the things in this category are useful, like TVs, refrigerators, air conditioners, cars, etc. When the economy is growing, companies that make the above items have the highest growth rates in terms of profits because the market needs them more. Because these companies are making more money and more people want to buy their shares, the average price of their shares goes up on the market. This increases their cash flow, which makes them even more profitable. But when the economy is in a recession, cyclical public companies are the ones that suffer the most. The economy slows down during a recession, which has an effect on the level of production and employment. When unemployment goes up, people buy fewer consumer goods at first. This causes a big drop in total income and profit levels. Most cyclical stocks' share prices go down when the economy is bad. This is because these companies make less money and fewer people want to buy their shares. So, there is a direct link between changes in the business cycle and cyclical stock performance. Since a rise in economic output raises the profits of the companies issuing the bonds, and a fall in the economy leads to a sharp drop in the profits these companies make, The difference between stocks that go up and down and stocks that don't Stocks that do well when the economy does well tend to do well when the economy does well. But that doesn't work for stocks that don't follow a cycle. Even when the economy slows down, these stocks tend to do better than the market as a whole. Defensive stocks are another name for non-cyclical stocks. They include all the goods and services that people keep buying through all types of business cycles, even when the economy is bad. Companies that sell food, energy, and water are examples of non-cyclical businesses. Adding non-cyclical stocks to your portfolio can be a great way for investors to protect themselves from losses caused by cyclical companies during a recession.
Jul 10, 2022
Stocks that are thought to be undervalued on the stock market are called "value stocks." Many investors think that the market overreacts to any news, which causes stock prices to change in ways that don't show how strong the company's fundamentals really are. So, stocks that are currently trading for less than what the company is really worth are called "value stocks." Investing in value stocks, also called "value investing," is a strategy based on the idea that the market will eventually figure out what these stocks are really worth, which will cause the price to go back up and bring in good profits. What do value stocks do? The idea of buying low and selling high is at the heart of value investing. If you know how much something is really worth, you can buy it for less and sell it for more. This is how it works to buy stocks based on their value. The investor finds the value stock, buys it at a discount and holds on to it until it reaches its real value, at which point he or she makes a lot of money. Stock sales and discounts won't be advertised and shown to the public. You, as a smart and realistic investor, will need to find stocks that are trading cheaply so you can buy them now and make money from them later. Features Value stocks are cheaper than other stocks like growth stocks because they are undervalued. One thing that value investing stocks have in common is a low price-to-earnings ratio and a high dividend yield from stocks that aren't doing as well. Another important thing about value stocks is that their prices don't change as much when the market is high or low. How To Find A Value Stock Intrinsic value is a combination of studying the financial structure, cash flows, revenues, and profits, as well as fundamental factors like the brand, business model, market structure, etc. This is an important thing to think about when looking for the best stocks to buy. Investors use the following ways to figure out how much a company's stock is worth: Price-to-book (P/B) ratio: Divide the price of a company's stock by its book value per share to get the price-to-book ratio. Book value is the value of a company's assets minus its debts. Low P/B ratios can be a sign that a stock is undervalued and can help you find a good value stock. P/E ratio (price to earnings ratio): The price-to-earnings ratio is found by dividing the stock price by the company's earnings per share. The price-to-earnings ratio (P/E ratio) shows how the price of a stock on the market compares to its actual earnings as shown in its books. Low P/E ratios mean that the stocks are undervalued, which means that the share price could go up in the future. Price-to-sales ratio (P/S ratio) Divide the market capitalization by the company's total sales or revenue to get the price-to-sales ratio. Market capitalization is the number of shares that are out there multiplied by how much each share sells for on the market. If the P/S ratio is low, it means that the stock is undervalued and a good buy. Cash flows freely Free cash flow is the amount of cash a company has left over after all of its operating and capital costs have been paid. If the company has free cash flows, it will have money to invest in the future, pay off debts, pay dividends, and do other things. There are other ways to figure out how much the company and its shares are really worth. When making a list of the best value stocks to buy, investors need to know about the company's finances, its competitors, the products it sells, and its track record with corporate governance. These will be the most important parts of the business. When investors look at all of these things, they can decide if a stock is a value stock and can give them good returns in the future. In a perfect world, the price of a share of stock would be the same as its true value. In the long run, the price of a stock will be about the same as its value. In the short run, however, this isn't true for a number of reasons. The reasons could be problems with the economy as a whole or the fact that the business sector is cyclical. The value investors think that the market will eventually figure out that the prices are wrong and fix them. This is why value investing is done by experienced investors who look for stocks that are strong on the inside but are trading at a low price. So, figuring out the stock's intrinsic value is the best way to tell if it's a good deal to buy or if the price is too high to sell. When looking for the best value stocks to buy, investors should do their own research, think about their financial goals, and decide how much risk they are willing to take.
Jul 09, 2022
Growth stocks are companies that have a lot of room to grow. By buying shares in these kinds of companies, investors can make a lot of money through capital appreciation. However, investing in growth stocks requires the right research before you can buy them. Features People who like to take risks and want to make a lot of money on their investments should buy growth stocks. By looking at the following things, investors can easily find the best growth stocks and the companies that make them: Price to earnings ratio On the market, companies with a lot of growth potential are found, and shares of those companies have a high bid value. These companies' growth stocks have a high price-to-earnings (P/E) ratio, which means they give a high return on total investment. People see a company's full potential and think it will grow at a fast rate in the future if it has a high price-to-earnings ratio. But in some situations, a high P/E ratio can be misleading because it could mean that a business is overvalued. The performance of these kinds of businesses is caused by a boom, persistent inflation, or the growth of a financial bubble. One of the first things that the best growth stocks in India tend to have is a ratio of 1 or more. Price earnings to growth ratio Because the P/E ratio has some limitations, investors in India also look at the price-earnings to growth ratio to tell growth shares from standard equity shares. The main benefit of the PEG ratio over the P/E ratio is that it takes into account how much a company's total earnings per share are growing each year. PEG Ratio = Market value of unit shares divided by the growth rate of earnings per share When a business has a high PEG ratio, it means that it has done very well. It is a better way to analyse a stock than the price-to-earnings ratio because it doesn't give you false information. Strength of the company Companies can only give out growth stocks if they have a lot of room to grow and expand in the future. This can only be done if the company has a strong base, a good plan for business growth, and good management to reach the goals that have been set. It can be seen in the return on equity (RoE) value that is published every year. In India, companies that raise money through growth stocks usually have a record return on total equity of 15% or more per year. Why should you buy stocks that can grow? Capital appreciation Investing in the best growth stocks is done to make sure that a lot of money is made through large capital gains. These companies grow faster than the industry they are in, which means they make more money. Investing in growth stocks is only a way to make money in the long run. The long-term capital gains tax (LTCG), which is lower than the short-term taxation policy, applies to any capital gains made during this time. There is also a provision for indexation, which lowers people's tax burdens even more. Prepare for rising prices The best growth stocks have returns that are much higher than the rate of inflation in an economy. In the long run, people's purchasing power goes up, which means that their standard of living goes up because they have more money. Risks of growth stocks Growth companies look to make money by using aggressive business strategies to get a big share of the market. Investors lose a lot when these kinds of companies don't pay dividends because they want to use the money instead to grow. During the lock-in period, investors don't get any dividends, so if a business keeps losing money, in the long run, investors will lose all the money they put into it. Growth stocks are usually issued by companies that are still growing and changing, so they are very risky. They are very sensitive to changes in the market because they are volatile. Even though this feature lets businesses make huge profits when the market goes up, even a small change in price can cause losses. Investing in the best growth stocks should depend on how the market is doing. The underlying performance of growth stocks can also be caused by a country's stable economy. If there is a financial bubble, companies that work in that sector tend to do better than they should. This kind of growth can be deceiving because it is caused by a strange thing in the economy. In order to make enough money, investing in growth shares in India requires a thorough analysis of both the companies chosen and the social and economic conditions at the time.
Jul 08, 2022
Putting money into mutual funds through a structured investment plan (SIP) has become very common. Read on to find out why mutual funds are such a good way to invest and how SIP can help you reach your long-term financial goals. Looking for good stock trading platforms? We offer the best online trading platform and the lowest brokerage for intraday trading. Everyone has hopes, dreams, and goals they want to reach. Everyone wants to feel safe about their money. For example, a new car, a bigger house, or a trip with the whole family to a faraway place. But you can only reach your goals if you put in the work that is needed to make them happen. Investing in mutual funds through a Systematic Investment Plan (SIP) could be a simple way to help you reach your goals. So, let's look at what SIP stands for, how they work, what the benefits of SIP are, and how investing in SIP can make it seem like you can reach your financial goals. HOW DOES SIP WORK? A Systematic Investment Plan, or SIP, is an investment in a mutual fund that lets you invest slowly over time. It is a way to invest fixed amounts of money on a regular basis, such as monthly, quarterly, or every six months. If you invest consistently in this way, you may find it easier to reach your financial goals. To make money, you don't have to time the market. With SIP investing, this uncertainty is taken away. Once you've chosen the term and frequency of your investments, you can choose to have them made automatically. Then, tell your bank to regularly move money from your bank account to the SIP mutual fund of your choice. .WHAT'S GOOD ABOUT SIP IN MUTUAL FUNDS? The investments are not affected by the volatility of the market. The markets show what's going on in the economy, and just like the economy, the markets go up and down. So, a drop in the market could wipe out some of your gains, but a SIP can turn this to your advantage. One of the benefits of SIP is that it keeps investors from gambling in markets that are very unstable. Investors may buy more units when the market is low and fewer units when the market is high. Because of this, the long-term average cost of each unit is expected to be less, and the returns on investments are good. Because you invest every month, the NAV of each scheme changes, so the number of units you get each month also changes. When the market goes up, the price goes up every month, and you get fewer units. When the cycle turns and markets start to fall, the price to buy drops and you start to get more units for the same amount of money. Rupee Cost Averaging is the process of investing at different times in the market so that the costs are spread out over a longer period of time. HELPS TO BUILD CORPUS WITH SMALL AMOUNTS Another benefit of SIP investment is that it lets you put as little as Rs. 500 per month into mutual funds. Even if you don't have a lot of money, you may be able to benefit from India's growth by investing in mutual funds. This could be a cheap way to put money away every month without going over budget. With the SIP step-up feature, you can increase the amount you put away each month as your income goes up. Investors can also add more money to their SIPs regularly through mutual fund firms. With a systematic investment plan (SIP), you invest the same amount of money in a mutual fund scheme every month. Over time, this adds up to a large corpus. One of the main reasons why your savings grow is because of compounding. Because mutual fund returns are re-invested and you get returns on your returns, you benefit from compounding, which is a simple but powerful force. YOU BECOME MORE DISCIPLINED WITH YOUR SAVINGS One of the most well-known benefits of SIP investments is that they allow investors to save money in a structured way. Also, a monthly budget helps teach people to be responsible with their money. SIPs are very flexible, so they can be stopped at any time and the amount invested can be increased or decreased. By using SIP to save first and spend later, you can follow the golden rule of personal finance. Now, all you have to do is pick a monthly SIP date that matches the date you get paid. And before you start spending, every month you'll end up investing. BOTTOM LINE Investing in mutual funds through SIP has many benefits besides the top three listed here, such as convenience, diversification, flexibility, no fees to start a SIP, etc. Also, SIP goes against the idea that making money requires a lot of work and planning. In reality, SIP shows that you should avoid complicated investment strategies like "timing the market" and instead invest regularly to keep your money in good shape. If you are looking for a good stock trading platform, then check out Zubu’s website for the best online trading platformonline trading platform and lowest brokerage for intraday trading.
Jul 07, 2022
A few rules about investing could help us figure out how quickly our money grows or loses value. Then, some rules help us decide what to do with our money. For instance, how should we divide up the money in our mutual funds? How much should we save for retirement and emergencies? We've made a list of general tips to keep in mind when making decisions about money or investing. Are you looking for the best trading platforms? Then your search ends here. At Zebu, a share broker company we offer our users the right online trading platform and the best trading accounts. 7 RULES OF INVESTING To quickly understand how much money is worth, you need to know the first three thumb rules. RULE OF 72 Everyone wants their money to double in value and is looking for ways to make that happen as quickly as possible. The rule of 72 gives you an estimate of how many years it will take for your money to double. If you divide 72 by the expected rate of return, you may get a very accurate estimate of how long it will take for your money to double using this method. Let's look at an example to see how this rule works. Let's say you put Rs 1 lakh into something that gives you a 6% return. If you take 72 and divide it by 6, you get 12. That means that in 12 years, your Rs. 1 lakh will be worth Rs. 2,00,000 It's important to remember that this rule only applies to assets that pay compound interest. You can also use the Rule of 72 to figure out how much interest you'll need in a certain amount of time to double your money. For example, if you want your money to double in 5 years, you can find the interest rate by dividing 72 by the amount of time it takes to double. I.e., 72/5= 14.4%p.a. So, for you to get twice as much, you should get 14.4% p.a. RULE OF 114 Using the same reasoning and math formula, the investing rules of 114 can give you a pretty good idea of how many years it will take for your investment to triple. Rule 114 says that if you invest 1 lakh at 6% p.a. for 19 years, it will grow to 3 lakhs. Similarly, if you want your money to triple over the next five years divide 114 by 5, which gives you a rate of interest of 22.8% per year for your money to triple in 5 years. RULE OF 144 Rule 144 is the next rule of thumb to keep in mind when investing in a mutual fund. Rule 72 times 2 is 144. The "rule of 144" tells you how much time it will take to quadruple your investment. Rule 144 says that if you put Rs 1 lakh into a product with a 6% interest rate, it will be worth Rs 4 lakh 24 years later. So, to find out how many years it will take for the money to grow four times, just divide 144 by the interest rate of the product. 100 MINUS AGE RULE The 100-minus-age rule is a great way to figure out how to spend your money. That is, how much of your money should go into equity funds and how much should go toward paying off debt. This investment rule says that you should take your age away from 100. The number you get is the right amount of equity exposure for you. The rest of the money can be used to buy debt. Say, for example, you are 25 years old and want to invest Rs 10,000 each month. If you follow the 100 minus age rules for investing, 75 percent of your money will be in stocks (100 – 25). Then you should put Rs 7,500 into stocks and Rs 2,500 into debt. Using the same rule, if you are 35 years old and want to invest Rs 10,000, you should put 100 – 35 = 65% of your money in stocks. So, you should put Rs 6,500 into stocks and Rs 3,500 into debt. RULE FOR A MINIMUM INVESTMENT OF 10% This rule of thumb says that investors should start by putting away at least 10% of their current salary and then increase that amount by 10% each year as their salary increases. To make the most of the power of compounding, you should start investing as soon as possible. Investing early will help you make the most out of it. EMERGENCY FUND RULE Like the rule about investing at least 10% of your income, you must put some of your salary into the emergency fund. You need to have money saved up because you never know what life will throw at you. So, you should save money for emergencies before you start investing. According to this rule, you should save enough money to cover your monthly costs for at least three to six months. In case of an emergency, you need to be able to get to your emergency fund, and it's best to keep it liquid so you don't run out of money. RULE OF 4% WITHDRAWAL Stick to the 4% rule if you want your retirement fund to last long. If you follow this rule as a retiree, you will have a steady income. But at the same time, you have enough money in the bank to make enough money. For example, if you have a retirement fund of Rs. 1 crore, you should take Rs. 4 lakh every year, or Rs. 33,000 every month, to keep up with inflation. SUMMING UP The rules of thumb listed above are general rules and guidelines that every investor should follow. A good investor is careful, so before you start, you should do your research and talk to someone who knows about investing. That's why it's important to stress that these rules shouldn't be followed without question. Keep in mind that a good investment portfolio helps you reach your financial goals while taking your risk tolerance and time horizon into account. At Zebu, a share broker company we offer our users the right online trading platform and the best trading accounts.
Jul 06, 2022
It is a good time for women to be financially independent and take charge of their money. With easy access to information on the internet, changing social norms, and the ability to work and invest, women must get over the stereotypes and deal with money problems head-on. Here are a few tips for women to plan their finances. At Zebu, an online trading company we believe everyone should trade and have created an online trading platform with the lowest brokerage for intraday trading. Set up a budget Make a budget that fits your monthly or annual income and how long you want to take to reach your goals. This is where the 50-30-20 rule can help. Set aside 50% of your monthly income for living expenses, 30% for savings and investments, and the remaining 20% to live like a queen. It is important to make a budget for your money. Once you know what your costs will be, you can work around the estimate. With a budget, you can also figure out how much money you'll need over the next 10 to 15 years, taking inflation into account. Set Financial Goals Learn how to make a plan and set financial goals for yourself as part of financial planning for yourself. You can use a spreadsheet or Excel to make a list of your financial goals. A financial goal is what you want to do with the money you've worked hard to earn. The goals are broken up into short-term, medium-term, and long-term groups. Once you have a plan, you will be able to figure out which goals you should save or invest for. So, it makes it easier for women to plan their finances. For instance, you will have to set a limit on your variable costs. If you don't keep track of your irregular spending, you could end up in a financial hole. This could be caused by anything from required travel, phone, and internet services to a shopping spree or a night out with the girls. You don't have to give up all the fun, but if you want to buy a house or start a business, you might want to be more careful with your money. Find out where you are now The next step in planning your finances is to find out where you are now. You can figure out your net worth or baseline by taking the value of your assets minus the value of your debts. Assets are things like bank accounts, investments, real estate, jewellery, and other valuable things. Liabilities are things like credit card debts, loans, mortgages, and other debts. Set up a fund in case of an emergency. There are no signs that a rainy day is coming. Anytime, things can go wrong. Women are often forced to take breaks from their careers to take care of their children or sick parents. This means that they don't get paid and can't invest their money. Because of this, it is important to have cash on hand even if you don't get paid. Make sure you have a backup fund in a liquid investment that doesn't have a time limit. You should always be able to get to the money. So, put money aside each month for those unexpected costs that your insurance won't cover. Focus on Retirement On average women live longer than men when it comes to making financial plans. So, they will need, on average, more money to live without a salary. So, planning for retirement is an important part of making a plan for your money. Even though retirement seems far away, you'll only have the money you've saved. So, even people who plan to work after they retire should get ready for a life with limited ways to make money. Also, make sure you have health insurance so that you don't run out of money if you have to go to the hospital. CONCLUSION There are many reasons why women need to plan their finances. To start, women work less than men, live longer, and get paid less than men. And in the modern world, money is a sign of power, independence, and freedom. So, if you want to reach your goals, you need to plan your money well. Get in touch with Zubu, an online trading company that offers anonline trading platform with thelowest brokerage for intraday trading
Jul 05, 2022
Investors look for ways to make money, get a good return on their money, and save money on taxes. There are too many investment options on the market right now, which is where ELSS funds come in. We will talk about ELSS mutual funds and find out more about them. We will also talk about how to invest in them. As a share broker, we understand the problems trader face with lowest brokerage options to help them in the trading journey. WHAT ARE ELSS FUNDS? Section 80C of the Income Tax Act lets ELSS, which is a type of equity mutual fund, be tax-free. "Equity Linked Savings Scheme" is shortened to "ELSS." It works just like any other open-ended equity fund that mostly invests in the stock market to give investors growth through capital appreciation. The least amount of time you have to hold on to these investments is three years. Under section 80C of the Income Tax Act, 1961, a person who invests in ELSS can deduct up to Rs 1.5 lakh from their total gross income. So, an ELSS has to compete with products like the PPF, NPS, a tax-saving fixed deposit, a national savings certificate, and so on, to get the money of tax-aware investors. The other securities, on the other hand, are mostly fixed-income products, while an ELSS is only invested in stocks. Because of this, ELSS is seen as a way to build wealth rather than a way to save money. So, like other equity funds, the ELSS follows a bumpy path to growth and gives returns that go up and down a lot. But it makes up for this volatility by giving you the chance to make huge profits. WHAT DO ELSS MUTUAL FUNDS HAVE TO OFFER? Here are the most important things about ELSS mutual funds. ELSS Funds must put at least 65% of their portfolio in equity shares and can put as much as 100% of their portfolio in equity shares. You get the best of both worlds when you invest in stocks: your money goes up in value and you pay less in taxes. In ELSS Mutual Funds, there are no fees to buy or sell. If you want a steady income, you can either get dividends or choose the growth option to make your money grow. They must be locked in for three years, which is the shortest lock-in period of any way to save money on taxes. WHAT ARE THE TAX BENEFITS OFFERED BY ELSS FUNDS? Under section 80C, you can get a tax break if you invest in an ELSS mutual fund scheme. But if you cash out or switch out of the scheme before the lock-in period, you will have to pay taxes. Long-term capital gains tax applies to equity mutual funds that have been held for more than a year. However, if the profits reach Rs 1 lakh in a financial year, they are taxed at a rate of 10% without the indexation advantage. Like all other mutual funds, ELSS can be bought through a systematic investment plan (SIP). You can start a SIP for an ELSS mutual fund with as little as Rs 500. As your income goes up, you can add more money to your SIP investment, just like you can with other mutual funds. ELSS funds are investments that do two things at once. It helps you not only save money on taxes, but also use that money to build up a lot of wealth. So, you might put these assets toward long-term goals like your kids' college education or your retirement, where you'll need to do much better than inflation. As an experienced share broker, we understand the pains a trader faces with lowest brokerage options to help them in the trading journey.
Jul 04, 2022
When it comes to making investments, investors have a lot of choices, such as debt vs. equity, active vs. passive funds, mutual funds vs. stocks, value vs. growth investing, and so on. Investors can choose between growth investing and value investing when they put money into the stock market. Both strategies help investors make more money on the stock market, but they do so in different ways and are widely used. Fundamental research is a good way to tell the difference between value stocks and growth stocks. Let's look closely at each type before we say what makes them different. Before we get into choosing growth stocks, the primary aspect of every trader’s life is technology. At Zebu an online stock trading company we offer the best online trading platform with the lowest brokerage options Investment in growth stocks The Growth Investing strategy looks for companies that have a higher chance of outperforming their earnings and are expected to keep giving high returns on profit growth. Small-cap, mid-cap, and large-cap funds all have growth stocks. Investors are willing to put money into something and pay a higher price if they think it will grow or give them a higher return soon. Investors are optimistic about the company's business plan and its chances of growth in the near future. Several things, like the company's position in the market or the belief that its next line of products will be well received, can give investors confidence. Also, these stocks are more "expensive" than those of their competitors because their price-to-earnings ratio is higher. This is why investors are willing to pay more for these stocks than they are currently making because they think the price will be worth it in the long run. Investment in value stocks The value investing method usually looks for stocks that are undervalued, or whose current market price is lower than what they are really worth. So, they move along slowly, but they are worth more in the long run. The idea is that the market will quickly see how valuable it is, and the share price will then "catch up," leading to big profits. So, if the actual value of a share of stock is Rs. 100, but it is currently trading at Rs. 75, an analyst will think this is a good value pay. There are many things that can cause value stocks to be undervalued, such as the economy, legal problems, bad press, disappointing earnings, etc. All of these things make us question how well the company will do in the long run. But they come back slowly. Value stocks are best for investors who want to hold them for a long time, and their prices may be more likely to change than those of growth stocks. DIFFERENCE BETWEEN VALUE V/S GROWTH INVESTING An important difference between value stocks and growth stocks is that value stocks have a better chance of beating their peers when interest rates go down and corporate earnings go up. But when the economy slows down, it will be the first to pay the price. Value stocks, on the other hand, may do well in the early stages of an economic recovery, but they are more likely to do poorly in a long-term bull market, when constant media coverage, a rumor, or a news story about the company's management could cause a panic sell-off. VALUE V/S GROWTH INVESTING: WHICH IS BETTER? There is no right or wrong way to choose between growth investing and value investing when investing in the stock market. Instead, each method has its own set of goals, benefits, and risks. Because of this, it is best to use a combination of investment styles instead of just one, since both have their pros and cons. The primary and most critical aspect of every trader’s life is technology. At Zebu an online stock trading company we offer the best online trading platform with the lowest brokerage options.
Jul 02, 2022