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MyAnmol by Jinal Solanki - 1w ago

Staying invested makes more sense than moving in and out of the market, if the investor has a goal to achieve capital appreciation. Every good financial advisor preaches and practices the mantra – “time in the market is more important than timing the market”.

A lot of investors make the mistake of abandoning their financial plans at the first sign of bad news. Instead, one would do well to take a macro perspective and realize that over the years, bull markets have lasted longer than bear markets. It is also interesting to note that on most occasions, the upward rallies have easily made up for short-term declines.

Reasons for Staying Invested:

 Sense of Discipline

Regular investing is probably one of the most critical aspects for wealth-creation. Staying true to your financial plan inculcates a sense of discipline towards long-term goals.

Benefits from Compounding

Give your money time to grow. Let it work as hard as you do. The mathematical reason for staying invested was well articulated by Albert Einstein, who said, “Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it. ”

Benefits from a Full Market Cycle

Staying invested allows you to participate in the rallies. This is an opportunity to buy low and sell high because in the long-term, the good schemes have always delivered positive returns. Understanding the markets is easy, timing them isn’t.

Leverage Long-Term Strategies

When you agree to stay invested for a longer duration, you give yourself the opportunity to benefit from the long-term strategy and vision of an experienced money manager or mutual fund manager.

Tax Benefits

Long-term capital gains arising on the transfer of units of an ‘equity oriented’ mutual fund is exempt from income tax. Moreover, investments in ELSS from mutual fund houses are exempt u/s 80/C of the IT Act.

To Conclude-
Irrespective of market conditions, we can control how and when to invest. That is why we believe that despite the
market uncertainty, investors should remain invested and committed to their investment goal(s).

To know more, contact us at – info@myanmol.com / 080-40463150

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MyAnmol by Jinal Solanki - 2M ago

Asset allocation is the rigorous implementation of an investment strategy that attempts to balance risk versus reward by adjusting the percentage of eachasset in an investment portfolio according to the investor’s risk tolerance, goals and investment time frame.

1.  Strategic Asset Allocation

This method establishes a “base policy mix”, a proportional combination of assets based on expected rates of return for each asset classes. Suppose stocks have historical returns of 10% per year and bonds have returned 5% per year, a mix of 50% stocks and 50% bonds would be expected to return 7.5% per year.

2. Constant- weighting Asset Allocation

Strategic asset allocation generally implies a buy and hold strategy, even if the shift in values of assets caused a drift. For this reason you can choose to adopt a constant-weighting approach to asset allocation. By allocating this approach, you continually rebalance your portfolio. For example, if the value of one asset is decreasing in value, you would want to purchase it and if that asset value increases, you would want to sell it.

There are no hard-and-fast rules to time your portfolio rebalancing under this strategy. However, the common thumb rule is that the portfolio should be rebalanced to its original mix when any given asset class moves more than 5% from its original value.

3. Tactical Asset Allocation

Tactical Asset Allocation can be described as a moderately active strategy, as the overall strategic asset mix is returned to when the short term profits that are desired are achieved.

This strategy also demands some discipline as you need to first be able to identify when short term opportunities run their courses, and then rebalance your portfolio.

4. Dynamic Asset Allocation

In Dynamic Asset Allocation, you constantly adjust the mix of assets as markets rise and fall, and as when the economy strengthens and weakens. In this strategy, you sell assets that are declining and purchase assets that are increasing in markets. This asset allocation is in polar opposite of a constant-weighting strategy.

5. Insured Asset Allocation

You establish a base portfolio value under which the portfolio should not be allowed to drop in Insured Asset Allocation. This may be suitable for risk-averse investors who desire a certain level of active management of portfolio. For example, an investor who wants to establish a minimum standard of living during retirement may find insured asset allocation strategy being ideally suitable to reach their management goal.

6. Integrated Asset Allocation

Here, an investor considers both his economic expectations and risk in establishing an asset mix.  It is a broader asset allocation strategy, though allowing only either dynamic or constant-weighting allocation.

To Conclude:
All the strategies mentioned above are dependent upon the investor preferences and their risk taking appetite. Choose your asset allocation strategy  appropriately in your portfolio.

The post Six Asset Allocation Strategies appeared first on MyAnmol.

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One of the main reasons for investing money through mutual funds is to earn better returns through expertise and professional fund manager’s advice that are responsible for making investments based on market movements and trend analysis.

However if you do not want to avail the services of a fund manager then Index Funds are the best option for you.

Here is how it works:

In an actively managed fund the fund manager picks the best stocks, bonds and other securities which own the potential to fulfill the objective of the scheme. Here, the fund manager closely monitors his portfolio and takes timely decisions to ensure best returns.

On the other hand, index funds (also called as passive funds) are the equity funds which mirror a specific index (e.g.: BSE, NSE, etc) and invest in same stocks according to the proportion of the index.

A comparative study:

  1. Cost of investments: The cost that is involved in management of an index fund is lesser when compared to that of a managed fund.
  2. Management Style: An experienced fund manager follows a structured investment approach, based on the real time developments and trend analysis which leads the funds to outperform. Whereas, this part of management is missing in passive funds.
  3. Limited downside: a fund manager has the limit to downside the risk by holding only the performing securities. Whereas, in case of index funds they fall as the market falls.
  4. Fund Manager Risk: there is always a chance that your fund manager might make a poor decision. There is a chance of him quitting the fund too. Index funds passively invest only in securities that represent a particular index.
  5. Traded on exchanges: Most mutual funds can be traded only through NAV. However, since index funds are traded on exchanges, one can buy and sell them at anytime and take advantage of the real time prices.

To Conclude:
Both the type of funds have their own specific advantages and disadvantages, it is left to the decision of the investor to choose index funds or the actively managed funds.

 

To know more, contact us at – info@myanmol.com / 080-40463150

The post Index funds Vs Actively Managed Funds appeared first on MyAnmol.

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Financial planners are unanimous in saying that when it comes to making investment decisions, women rarely take an initiative. More often than out, they rely on other members of the family, may be husband or father, to make investment choices. But social dynamics are slowly changing. More women are earning independently from an early age and, at the same time, getting married later than sooner. Then why not invest money independently?

A study commissioned by DSP BlackRock Investment Managers Pvt. Ltd and conducted by global research agency Nielsen across 14 cities in India in July 2013, found that only 23% of working women make their own investment decisions. The figure for single working is even lower at 18%.

Making investment decisions is linked to financial planning. It is a simple exercise about allocating resources to achieve future goals. However, you need to approach it in context of your current and future routine. You can draw a broad outline of your finances based on the stage of life you are in now and then keep adjusting for changes as they happen.

The planning process

Planning has to be done around an objective. “There has to be a context to planning and investing,” said Suresh Sadagopan, a Mumbai-based financial planner.

Objectives depend on individuals and their lifestyle, but to achieve them you need to plan ahead.

For single earning women without any children, the objectives could be linked to buying a car or a house or taking care of elderly parents. For an earning married woman spouse is also earning, it could be all these and the need to plan for a child. There are a lot of expenses around childbirth and you can actually invest in advance to cater to some of these.

But one goal that is common to all women, irrespective of age and status in life, is retirement. And at that point, you won’t want to give up the lifestyle you are used to living.

Many women make their retirement their spouse’s responsibility. That’s not the best thing to do. According to Nisreen Mamaji, founder, Moneyworks Financial Advisors, a Mumbai-based financial planning firm, “While working women do give some thought to retirement, non-working married women almost never plan for their retirement. But it is important for them to at least be aware and involved in the retirement planning investments because in the eventuality of the husband not being there, she will have to manage her family and finances single-handedly.”

Once the objectives and the context to financial planning have been set, then decision has to be made up on the products through which the goals can be achieved.

Cater for contingencies

Other than investing to meet financial goals, one must think of contingencies as well. All the necessary planning could be done, but in the event of unforeseen circumstances and loss of life, things turn around completely.

A loss of life can be covered through insurance. If you are a single working woman without any dependants, this may not be your primary concern. However, if you are single and have a loan running, there is merit in being insured, at least enough to cover the loan amount so that the liability doesn’t fall on your kin.

Often, even a working mother doesn’t assign too much importance to her own life to cover the eventuality of death. Insuring both earning members of the family helps protect the loss of income, which the rest of the family is dependent on.

The other emergency that may take place is health related. These are also hard to predict and can get exaggerated if there are unforeseen occurrences such as accidents.

What should you do?

Financial independence for women can’t just be about earning their own money, but also about how they manage it and secure their and their family’s future.

The foremost step towards financial planning is to become aware, which means understanding how you can make your money work efficiently for you over a number of years. The objective could be to ensure your family’s financial security, your retirement or even just your travel dreams, but the approach has to be to embrace a planned personal financial management and goal-based investing.

To know more, contact us at – info@myanmol.com / 080-40463150

The post This Women’s day, take control of your own Money! appeared first on MyAnmol.

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MyAnmol by Jinal Solanki - 2M ago

Indian women have come a long way, from the time when they were completely dependent to the time they are totally independent. Thanks to the various financial schemes and benefits given to women.

INCOME TAX

Since the introduction of IT women have been given special preference and attention by Government.

The Government has given higher tax exemption limit to women. However, to save taxes women get the same deduction as men under 80C to 80U under the IT Act, 1961.

Taxable income Tax Rate
Up to Rs. 2,50,000 Nil
Rs. 2,50,000 to Rs. 5,00,000 5%
Rs. 5,00,000 to Rs. 10,00,000 20%
Above Rs. 10,00,000 30%

SAVINGS BANK ACCOUNT

Banks provide with saving accounts facility in order to cater to the financial, investment and lifestyle needs of the woman. There exists customized bank account for women that offer various rewards and cash back offers.

Some banks have also started offering discounts on medical test required for women like thyroid test, etc.

To save for their kid’s education, working mothers can now open a accounts ‘Junior/Kid Account’ with the waiver of monthly account balance requirement if that is linked to RD (Recurring Deposit) or SIP (Systematic Investment Plan)

INSURANCE

While buying an insurance policy, women receive a benefit on the premium that is paid by her as compared to their male counterparts. Generally, women pay fewer premiums when compared to men. The reason behind this is that women have a higher life expectancy as compared to men.

Yashish Dahiya, co-founder and CEO of Policybazaar.com, says, “There is definitely a difference in the life insurance premium paid by men and women. The premium rates for women are priced lower because men have a shorter life expectancy than women. Therefore, the likelihood of a death claim by women customers will be lower as compared to men.”
LIFE INSURANCE PREMIUM

A comparison for 30-year-old male and female, non-smoker, with Rs 1 crore cover on a policy term of 35 years.

Plan Premium-Male Premium-Female
ICICI iProtect Smart Rs.991/- p.m. Rs.876/- p.m.
HDFC click 2 protect Rs.991/- p.m. Rs.857/- p.m.
Max OTP Plus Rs.807/- p.m. Rs.621/- p.m.
Aegon ITerm Rs.676/- p.m. Rs.558/- p.m.

The same cannot be made for Health Insurance as it depends on the individual’s age and another factor such as any pre-existing condition.

About health insurance premium, Dahiya adds, “The health insurance market has been a mixed one when one considers the concept of differential premium to men and women. While there is a clear differentiation offered in the life insurance market, health insurance – both indemnity and critical illness – has shied away from offering much of a differentiation. The absence of a push from most insurers in this direction is due to many factors. We hypothesize that such outcomes may be a result of (1) the mainstay of the market being a floater health policy where both adult family members (husband and wife) are covered and hence the risk is almost always evenly spread (indemnity) and (2) with multiple hospitalization events expected through the lifetime of a typical health insurance policy (indemnity), the differences may not effectively remain.”

CHEAPER INTEREST RATE ON LOANS

Many banks offer lower rate of interest on home loans if a woman is applying for it or if she is the first applicant for a joint loan. Usually, the interest rate difference is around 0.05%. The same lies for car loans too.

When looked into it, the difference in interest rate may not seem much, but if looked from the perspective of net interest savings, the longer your term period and higher your loan amount, the more you save.

REAL ESTATE: INVESTMENT AND TAXES

The discount offers for women don’t just end here, some state Government provide exemption with respect to stamp duty and transfer duty in case of sale deeds, conveyance deeds and gift deeds if the property is in the name of a woman.

Few Municipal Corporations even offer a rebate in the property tax if it is in the name of the woman.

ENTREPRENEURSHIP

To promote entrepreneurship among women, government has introduced various policies, schemes and incentives.

The latest scheme, “Stand up India” allows women entrepreneurs to avail bank loans between 10/- and 100/- lakh in the areas of manufacturing or trading sector for the first time.

The loan under this scheme allows women entrepreneurs to facilitate the purchase of assets such as plant, machinery, etc. and to fund the working loans.

Government has also indulged themselves in providing training facilities for new entrepreneurs. This includes a step by step guidance for connecting various agencies providing expertise in skills, entrepreneurship development programs. To avail this facility a nominal fee is charged.

To conclude:
Yes, we agree that Indian women have come a very long way in life through the above mentioned financial facilities. Yet, there exists many other ways in which Indian women need to be developed and made more independent.

This Women’s Day, let us all take an oath to develop and make the pride of our country as independent as possible.

The post Financial Benefits for a Women! appeared first on MyAnmol.

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MyAnmol by Jinal Solanki - 2M ago

–A Systematic Investment Plan or SIP is a smart and hassle free mode for investing money in mutual funds.

Rule No: 1 Understand how SIP’s Work

SIP’s do not provide a constant return and fixed interest. Start off by understanding and accepting the fact.

Rule No: 2 Play the Long Game

Starting off your SIP’s for a short period of time is futile and this may lead to a potential loss. Invest in you SIP for a longer time horizon and Play the Long Game.

Rule No: 3 Be Dispassionate

You just need to ‘Shut out the market noises’ and ignore all the pundits around you, who just keep telling you to check your SIP frequently and make tweaks to your portfolio.

Rule No: 4 Link them to Goals

Linking your SIP’s to your goals is a great idea!

Before you invest in SIP, ask yourself the reason for your investment, create a Goal and Link your investment to the goal. Keep your SIP’s running for a long time to achieve your goal.

To  Conclude:
Your Goals are the major driving force for your investment. Investing in SIP has the above 4 rules. Follow these rules to get a better and a greater return. Do Not Forget to Link Your Goal to Your SIP.

To know more, contact us at – info@myanmol.com / 080-40463150

The post Rules for Investing in SIP appeared first on MyAnmol.

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MyAnmol by Jinal Solanki - 2M ago

It’s Holi! So, what plans do you have for celebrating this festival of colours? Are you ready with the set of different colours, sweets and other things that you would require to play Holi safely? Of course, you would be, as you waited for a complete year to celebrate this day. Holi is considered the festival that brings colours to the life.

But did you know you can add those colours to your investments as well.

  • Add Green to Your Portfolio: The Colour of Debt

The colour green signifies balancing your new beginning, and in case of Mutual Funds investments is considered as balancing fund.  There are some low risk debt investments such as corporate fixed deposits, debt mutual funds, bonds and NCD’s help in keeping the portfolio safe even in the volatile times.

  • Add Red to Your Portfolio: The Colour of Equity

The colour red symbolises purity. Keep your equity funds in your investment portfolio as this would be highly beneficial for you. You can add this colour by making investments in the equity funds, stocks and shares of the companies. This brings you not only the benefit of capital appreciation but also would be able to achieve your financial goals. This will ensure your portfolio is well equipped. A SIP will enable you to invest small amounts of money in a stock/MF/index ETF and build a sizeable corpus over a period of time.

  • Add Yellow To Your Portfolio: The Colour Of Gold

Nothing symbolises the Yellow Metal better. This time do it the smart way by opting for Gold ETF instead of physical gold such as coins or bars. Gold ETF’s are the preferred vehicles for investing in gold as they are more tax efficient than physical gold, easy to buy and sell, available in small denominations, and can be kept safely in the demat account without incurring a storage cost. A SIP in Gold ETF would be a good way to invest if you want to buy gold after several years.

  • Add Purple To Your Portfolio : The Colour Of Real Estate

 Purple symbolizes royalty or luxury and this is what real estate adds to your portfolio.  It is a large sized investment as compared to equity or gold but it offers a good hedge against inflation. Because of the sheer size of investment every real estate buyer looks for the perfect price of the property as every penny saved translates into big savings.

This Holi, don’t just add colour to your life. Add colours to your financial portfolio as well.

 

To know more, contact us at – info@myanmol.com / 080-40463150

The post Holi Colours for Your Wealth appeared first on MyAnmol.

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There are so many different things to learn from our Indian Festivals and one among them is Holi. Holi is a festival of colors and is celebrated with great joy in India.

Let us have a look on the investment lesson which this festival teaches us.

Diversification is the key.

 Holi celebrates the onset of spring season. That is why there are various colors to celebrate the festival. Different colors make it so appealing. How would Holi be, if played with just one color? Too boring, Right?

So, here’s the first lesson, Holi teaches us the benefits of diversifying your portfolio among varieties of asset classes with an intention to maximize returns and minimize the risk.

NEVER PUT ALL YOUR EGGS IN ONE BASKET WHILE CONSTRUCTING A PORTFOLIO.

Reap the sweetness of good investment.

Any festival remains incomplete without any sweets. In Holi too we enjoy varieties of gujiyas, phirnis and thandais. Sweets carry a special lesson for us too. Just like we enjoy munching on various sweets in Holi.

Similarly as we are near to the financial year end, it’s time to take stocks of the investments that are already made. It is the time to book partial profits on the investments made given you haven’t gone horribly wrong on the investments made in the past year. With these, you may wish to buy something or go on a vacation for.

Time to get rid of the evils in your portfolio.

 Holi is the celebration of good over evil which we celebrate by burning Holika. Holika was the sister of Hiranyakashyapu, the evil king, who wanted to kill his son Prahlad just because he was lord Vishnu’s devotee. Holika entered fire with her son but came out without any harm.

 Just the way you rejoice the burning of Holika and take away all the negatives from your house, likewise you should take steps to clean up your portfolio also and reduce your high cost debt. It is a very important step to maintain your portfolio.

Revisit the ones which caused heavy losses in the past.

We often sort out all the grief and miseries with anyone during this festival.In the same way if any stock has caused you heavy losses in the past, it’s a time to revisit and check them whether it  makes sense or not to include it in your portfolio.

To conclude: This Holi, do note the above points to maintain your portfolio. Wishing you all a very Happy Holi and let your portfolio bloom in the time to come.

WISH YOU ALL A HAPPY AND A COLORFUL HOLI!

To know more, contact us at – info@myanmol.com / 080-40463150

The post  Four Investing Lessons to Learn from Holi appeared first on MyAnmol.

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Short-term capital gains come from assets held for less than a year, while long-term gains come from assets owned for over 12 months. The IRS taxes short-term capital gains as regular income, and it taxes long-term capital gains at a special capital gains tax rate

What is long term capital gains tax? 

It is a tax paid on the profit generated by an asset such as real estate, shares or shares oriented products held for a particular time frame. The definition of Long term capital gain is different for products.

Why is LTCG Tax in the news now?

Finance Minister reintroduced LTCG in Budget 2018-2019. Investors will have to pay 10% on profit exceeding 1lakh that is made from the sale of shares or equity mutual fund scheme held over a period of one year. Till now, LTCG was exempt from tax.

The budget talks about grandfathering in LTCG. What is it all about?

The grandfathering clause is an exemption that is granted to the existing investors or any gains made by them before the new law came into force. In the matter of LTCG the Government said that any gains made from shares or equity mutual funds until January 31 will be grandfathered or exempted from tax. There will be no LTCG tax on notional profit in shares until then.

So, who will come under the LTCG tax net?

The budget proposed that LTCG tax will have to be paid on profit booking after March 31. This means that for the sale of shares that is made until March, the existing law will apply and this tax shall not be applicable.

To  Conclude:
LTCG or the Long Term Capital Gain is a recent introduction in the Budget by the Finance Minister Arun Jaitley for the year 2018-19 mandating the tax to be paid by investors on their gains or their profit booking after March 31.

To know more, contact us at – info@myanmol.com / 080-40463150

The post Long-term Capital Gains Tax: Here’s all you need to know  appeared first on MyAnmol.

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What is Systematic Transfer Plan?

It is a method to stagger investments into equity funds over a period of time.

Investors here out their lump sum money in one scheme and transfer a pre-defined amount into another scheme.

The scheme which is taken for lump sum investment is called ‘source scheme’ and the scheme to which the money gets transferred is called the ‘destination scheme’

Many financial planners are suggesting STP for investors because it helps them maintain a balance between risk and return.

How do you start an STP?

Suppose an investor wants to invest 50,000 into an equity using STP, then he will have to first choose an liquid or ultra short term fund. Make an investment into this and once it is done, decide the amount you want to transfer to an equity fund.

How does an investor gain using an STP?

The big benefit of investing in an equity fund using an STP is that till the time the money remains invested in an liquid fund, he is safe.

The money here earns return that is generally higher than the savings bank account.

STP also averages out the cost by purchasing fewer units at a higher NAV and more at a lower price.

To terminate:

Financial planners have always suggested STP to maintain a balance between Risk and Return of the investors. They also use this to rebalance portfolios.

To know more, contact us at – info@myanmol.com / 080-40463150

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