Chill Maadi

The tendency of the Indians to invest more during auspicious occasions is undeniable. Diwali is coming soon and the financial market is already getting prepared for the same. But before jumping into the decision, you must know where you should invest from your side. Many people tend to invest emotionally in various risky options. But this Diwali, there will be nothing like such hasted decision if you follow some simple tricks.

You must know some important facets of the financial market to have an effective investment. These are the following –

• Analyze the market value
• Know the market conditions before investing
• Estimate your budget
• Judge your need for investment
• Do not invest emotionally
• Be updated to the conditions of finance sectors

Some important sectors of investment you must know this Diwali

These are some most popular and important sectors of investments one can opt for this Diwali. But, it is always advised to know the risk factors before investing in any of these.

Investment in Precious Metals

Generally, common people try to invest in buying some costly metal items during the Diwali season.  These are gold, silver, and platinum. But the market value of these metals varies in every Diwali. So, it is better not to invest more than 8 percent of your total budget. Moreover, the price of platinum and gold always remains on the higher side. So, it might not be easy for everyone to afford such precious items.

Mutual Funds

Some people want to invest in mutual funds in Diwali. Undoubtedly, mutual funds are growing rapidly in Indian economies. Most of the young generations prefer to invest in mutual funds in a large amount. It will not only give you more return but also provide an instant lift to your finances. But mutual funds are always subjected to market risks. So always consult with a financial advisor before investing in mutual funds.

Equities

The trading window becomes wider during the Diwali season. The effects are seen not only in Indian exchanges but also in some international stocks. But it does not ascertain you about getting a risk-free benefit from it. The liquidity level in the market fluctuates during Diwali. So, there will be some percentage of risks when you invest in Equities.

Real estate investments

Many people try to invest in real estate during Diwali and Dhanteras. But some of them do not care about the rest of the savings left after such a huge investment. Real estate investments need plans. You should not choose it over small investment options. It is suggested that after years of savings and planning one should invest in real estate. This is not a short term investment plan. So, be wise while deciding on investments in such criteria.

Fixed deposits

Invest in fixed deposits (FDs) to avoid financial risks. This is the most favorite option for middle-class people. But you must know about the maturity period before investing. If you are not comfortable with longer maturity periods, then avoid.

Bonds

Financial bonds are making an impressive base in the market. People expect a good return after investment. And bonds assure a safe investment plan. On this Diwali, invest in bonds if you are searching for a safer option.

NSC (National Savings Certificates)

Post Office investments are also beneficial for clients or investors. These are risk-free options for beginner investors. It will also a good return to you after a certain time.  You can also get the benefit of Income Tax under 80C.

PPF (Public Provident Fund)

If you are already in any service, you should opt for PPF in this Diwali.  Though PPF runs in a span of fifteen years it is a risk-free choice for all service holders. Invest in PPF as soon as possible you start your service career. You will also be able to save Taxes as a result. But you cannot invest more than 1.5 lakhs in a financial year.

So, here are some applicable ideas on investments you can follow in this Diwali to get the most out of it.  Choose the most appropriate one for getting a regular benefit from your investment.

Savings for life have become tricky as well as mandatory now a day. In the modern world, the risk of investment has increased. Besides, the need for investment has also risen. The diversity of options concerning savings is bringing you on the edge of threat regarding savings. So, you must know the correct way to save enough for the future. Here you will get to know about the details of it.

These are the strategical steps to guide you towards the appropriate way to save more.

Estimate your need

It is important to know what do you need to invest in to live a brimful of life. Moreover, an estimation of the expenditure should be framed to balance your life with income. The idea of saving more comes from the idea of buying less. So, cutting off unnecessary luxuries from a daily life might change your financial goals.

Search for the best insurances

In the 21st Century, investment comes with insurance. It might seem that investing in insurance will make you compel to provide premiums regularly. But the insurance in which you are investing today will revert more benefits tomorrow. Besides, it will ensure a secured life. Insurances are of many types as in health insurance, life insurance, automobile insurance, and home insurance and so on. But you will have to judge which one is most necessary for you right now.

Get the best mutual funds

Recently, mutual funds are taking the lion’s share in savings for the young generation. Mutual funds might be a bit riskier than other investment options. But, it returns more benefits than the other rivals available in the finance market.

Check your savings status at a certain interval

Always check your status of savings at a certain interval of time. It will assure you a review of the strategies. If you find the status is not much healthy and cash flow rate is higher, you must check the strategies once again. Go through the bank details, returns from ITR, insurance premiums and so on for getting a detailed scenario of the same.

Check the status of loans

There are many types of loans available in the finance market in today’s world. Education loans, home loans, car loan and many more are there. Most of the people need to get the support of financial loans to grab a firm base of financially robust life. But, when you feel that you need to start with a new loan check the status of other loans.

Home loans generally run for a longer period as the amount tends to be bigger than other loans. If you see that you are almost near to fulfill the home loan, try to complete the cycle with savings amount. It will save amounts of interest.

If you have kids, you might get support from the education loan. Most of the higher studies need a higher amount of money. If you plan for it from the beginning of your family life, you can save the interests of education loans.

The verdict is if you need a loan on an urgent basis, then only go for it. Otherwise, plan for house building, education for kids and other expenditures from the very beginning of your life. It will help you to save more money for your older age.

Take a smart retirement plan

Retirement plans are nothing but pension plans. It will provide you an assured sum at a certain interval of the period after your retirement. It will determine a fixed income even after your retirement.  Proper planning during your service period is necessary to choose a smart retirement plan. It is necessary to invest in such financial plans when you are earning sufficiently.  The policy you are selecting must be fulfilling your estimated needs after retirement.

A small outline to save more

• Always start it early. It means that think about savings from the very beginning of your service life.
• Compare the investment plans before investing in any
• Do not be biased to any certain criteria while choosing an investment plan.
• Save more with fixing small targets
• Save it more frequently in a small amount of sum.

If you are already following these strategies for a better future then it is perfectly alright. Otherwise, it is time to think about your plans and savings once again.

Having a home of your own is one of the greatest achievements in an ordinary person’s life.

Well, somewhere we all are fascinated about buying our dream home at our dream location. Isn’t it? Whenever any of the interior decor posts on social media comes in front of you, we silently think I wish I could have it or could afford it, but we got stuck when money comes into the role and why not?

Afterall considerable investment is required to buy a home, but don’t worry, I have the realistic and simple ways to save and grow money which will surely help you to buy home within a few years.

However, I would suggest you before you begin saving, you first have to know how much you’ll need to save. Plan to sit down with a mortgage lender who will let you know how much of a mortgage you can qualify for.

So, be proactive, and here are the Best Ways to Save Money for Buying a House:

• Invest In Mutual Fund SIPs or FDs

You must have heard and seen many times about invest in Mutual funds and get your money double. Many of you doubt that we will lose our money, but it is not valid.

In the present time, Mutual fund SIPs are a reliable and easy way to generate money from your invested capital. One can set apart a portion of their income and invest it towards Mutual Fund investments through Systematic Investment Plan. This will help you to make Home Loan down payment quickly as your ultimate goal.

You can understand it with an example like if you start investing Rs. Fifteen thousand a month in SIP, with a reasonable return of 12%, you can build sufficient fund of around Rs.12.40 lakhs in just five years.

Similarly, Fixed Deposits (FDs) also help you to build a good wealth within a few years.

• Start early savings

It is a fact “when it comes to saving money for investments, the earlier you start, the better it is for you.” Therefore, It is always recommended to start saving in your 20s itself

If you start investing while you are still in your 20s, you can enjoy the power of compounding to multiply your savings, thus having sufficient funds by the time you plan to purchase a home. This will help you in making your home loan EMIs, thereby reducing your Home Loan burden.

Your early strong financial position will also help the bank to put trust in you and will ensure approval of your Home Loan application.

• Cut down unnecessary expenses

For reducing the unnecessary costs, the first step is always to make monthly expenditure budget. A budget doesn’t stop you from spending money, but it will help you to figure out where your money is going so you can check out and cut off the expenses which are not required.

• Create a second income for yourself

It’s the era of Digital India with many proven ways of earning money with the help of a laptop and the Internet; you can quickly start earning and saving. Start doing side hustles, utilize your time, and make more money. There are many side incomes you can generate like if you work as a writer, you could do freelance writing on the side, if you work as an accountant you could help people with their tax returns, or you can also work with someone on a commission basis.

Keep exploring beyond your imagination as there are many sites which provide you assignments or side projects to generate passive income.

• Lower the Rent You Are Currently Paying and Save The Difference

If you are living in a rented property which has higher rent you can look for another cheap rented property and save the difference of rent. Currently, it does not seem to be nice but what you can do is to invest that difference amount in FDs, MFs or Gold, etc. which will help you to generate another income source from the savings.

“Buying a house is a massive investment; some of us call it a lifetime investment. You have to look for every aspect.”

The mega economic cycle that started in 2003 is well and genuinely reaching an end (from the looks of it).

2003 was a critical time in history –
1. The US had entered Iraq and was pouring money into two wars
2. China was added into WTO
3. Enron, 9/11, Worldcom, Dotcom and Asian crisis had ensured the bottom was well and truly made
4. Banks were giving away cheap loans to the subprime customer to create MBS

Why you should be careful while buying a bank stock and prefer to buy only sectoral mutual funds.

Yes, I know HDFC is the best stock ever. A perpetual multi-bagger. But check this post.

Banks are a beast. This is one industry that makes money out of money, is highly regulated and yet they break the rules often, and is super complicated. Banks make money by four main ways –
1. Loans
2. Trading of securities
3. Taking deposits
4. Commissions
Almost all the other sources of revenues are some variant of the above.

So why not to buy banking stock?

A lot of people confuse banking stocks with other stocks; PE ratio, customer service quality, management quality, and blah blah. But remember, a bank must be judged only on its balance sheet and never on its income statement. Because reading the balance sheet of a bank is tough, I always ask people not to invest in bank stocks.

Why balance sheet only?

There are several reasons, and the main ones are-
a. Provisions- Bank knows that they won’t get their money back on most of the loans they give away. So they make provisions from their income every year to cover those losses. A bank can “manage provisions “ any year to alter its income statement significantly. This means there can be a huge profit when the bank is F****d

b. HFT- Banks keep Held-For-Trading bonds on their balance sheet. Every time interest rate and inflation moves, the value of this line item changes. Any decrease in this line item will mean the bank will have cut its exposure, and that will significantly affect the bank’s performance

c. Concentration Risk- A bank may be conservative, but its books may be focussed on one particular sector or division. Like HDFC is heavy on retail banking or IDFC on infra sector. This Concentration in exposure is good till the time is good, then the tide turns, the bank is destroyed.

Eventually, ratios like profit ratios, PE, PEG, EBITDA, Margins don’t work. We investors are wired to look for profit and YoY growth. We don’t have understanding or time to analyze the balance sheet plus the terminology is entirely different in banking.

Best is to buy the Banking Index fund or sector fund as a Fund manager will understand these things better. The guru mantra is – If you don’t understand the business, don’t invest in it.

HDFC –

I am very concerned about HDFC. It has continued to rise without a stop in the last 10yrs. It may be the first instance in the world where an FI has not been affected by industry-wise rout, mostly because banks are linked to each other and when one goes down, it takes the other one with it. Betting against history is too big a risk. Either HDFC is a black swan event or iska time bhi aayega!

Don’t ever think that retail banking moves the needle in the banking industry. Very few banks have a retail portfolio that can move the needle. HDFC and ICICI are two major ones. We know what happened to ICICI. The Subprime crisis was a typical case of a bank going overboard on one asset class. Banks were not foolish to give loans to anyone. They gave subprime loans so that they can make Mortgage-Back-Securities (MBS) and sell it off. The expectations were MBS gains will offset defaults in subprime lending. Unfortunately, they ended up multiplying their exposure to MBS without understating the base of the security, so the income statement kept looking wonderful while the balance sheet was destroyed. And then one day the music stopped

Stock is the share of ownership of to company. When you buy stocks, you became a co-owner of the company you purchased. Stocks are being bought and sold in a stock exchange or stock market wherein there you will buy and sell shares. You should have a stockbroker prior you can buy or sell stocks in a stock market. There you will enroll an online stock trading account so that you can buy or sell stocks personally.

I encountered the word “stock” six years ago when I worked in a manufacturing firm in the Philippines. It was provided to me by the company because it is one of the privileges of all the workers. The number of stocks disposed to meet depends on the job function. That stock aid is without a doubt a big help for my loved ones and me in terms of our financial demands in those time.

Investing in stock is a good investment you can ever make if you only learn when and how to invest in stocks. You should also have knowledge, discipline, and perseverance in managing your portfolio in order to have an excellent profit from stocks. Remember that you can only lose money in stocks in two actions: when you buy and sell it.

In addition, one good thing about investing in stock is that it will give you higher earnings in the long term than other investment methods available presently. Long term investing in stocks means you will buy shares regularly to selected stocks greater than five years.

In the Philippines, blue chips are those stocks comprised in PSE Composite Index (PSEi). According to on the fac tots from PSE and BSP, the shares invested in blue chips will give you a 14% average annual total return according to on the past behavior of Philippine stock market from January 1989 to August 2009.

Moreover, for the last 20 years, investing in stocks gives you higher average annual total profit compared to Treasury bills (T-Bills) and savings account with 11.0% and 2.3% average annual total returns, respectively.

Therefore, investing in stocks, particularly blue-chip stocks, is the best technique to earn a more significant profit in stocks.

Many people are just plain fearful of investing their hard-earned money in the Forex market. Most of these fears are the result of hearing inaccurate or incomplete information. In other words, prevalent myths about the currency markets keep many people from investing. Don’t fall into this trap. Read on about several myths being dispelled.

You, Will, Get Rich Quick In The Forex Market

Far too many people fall into the trap of thinking they can take their money, invest it into a few prime forex pairs, and then sit back and watch the wealth roll in. While this may happen occasionally, it is the exception to the rule.

Very few people ever build wealth by investing in the forex market. And becoming rich is not necessarily the best reason for trading currency. Instead, considering your investment as a nest egg or retirement funding is a much better way to think about the forex market.

Knowledge Equals Success in the Forex Market

While it is commendable to want to increase your understanding of the forex market, it does not guarantee success. Too many investors feel invincible after taking a workshop and delve into trading currency pairs too quickly. The truth is, being informed of the risks does not reduce them.

Listen to the Forex Experts

It is not hard to find people who claim to be experts in trading on the forex market. It is hard, however, to determine what parts of their advice might work best for your own needs. These “experts” do not know everything, and at times, they can be downright wrong. Know when to follow a good tip and when to step back and listen to your intuition.

A Forex Market “Hobby” Can Make You Successful

Treating your investments as a weekend hobby will never make you wealthy. If it were that easy, more of us would be laughing all the way to the bank. There is no easy way to make a profit through forex market investment; only time and skill will produce real wealth.

Keep these common myths in mind as you begin investing. Don’t expect positive results overnight. Do your homework and take others’ advice with a grain of salt. As long as you are aware of the realities of investing, you need not fear the Forex Market myths.