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| Structure your portfolio based on the goals Posted: 10 Sep 2013 05:02 AM PDT Invest In Tax Saving Mutual Funds Online Call 0 94 8300 8300 (India)
IT IS time for an individual investor to take a portfolio approach to investing because looking at small niches or specific areas might not give them the correct picture. This is especially true in a situation where the various asset classes are in turmoil including equities, debt and even precious metals.
The first step for every investor is to take a look at all his or her investments and then understand as to what this role is played in an overall portfolio. Most of us tend to look at an investment in isolation. So for example, there might be some equity holdings and when there is a fall in the value here then the loss might be considered in terms of the impact that will be witnessed. However, it is important to put this in context in the sense that the role of the equity investments taken together and how they stand in terms of the portfolio is important.
Once the overall portfolio position is understood then the investor will be able to look at the importance of the investment in the context of the goals that are set. If there is a specific aim for choosing a debt investment then the importance of the goal and the way in which the investment is progressing would be seen. This would give a better picture to the investor because it would indicate whether there is any need to make a change in the strategy that is being followed and when the change would be essential. This will help in controlling any panic action because then the overall situation can be evaluated and the decision can then be made depending upon the need and the way in which this would need to be tackled. Safety:
There could be an element of conservatism that creeps into the decision-making when the investor is facing or witnessing tough conditions in various investments. This would mean an aversion to risk and there has to be efforts made so that the portfolio reflects this particular situation. The investor has to first check as to what part of their portfolio meets the safety feature and this would require conservative investments that are present in debt instruments. There has to be a clear distinction of the debt investments because those that can be traded also have an extra element of risk in the form of interest rate risk. This would mean that the value of the investment would fall when the interest rates in the economy rise. The other way to build safety is to ensure that the instruments are not traded so the amount goes into areas like fixed deposits and bonds that will be held till maturity. This ensures that all that the investor has to worry about is the interest rate that is being earned on the investment and nothing else. This is better for those who do not want any worry for their investments or having to track the investments once they have been bought. It makes a good choice for those who are extremely conservative in nature. Happy Investing!! We can help. Call 0 94 8300 8300 (India) Leave your comment with mail ID and we will answer them OR You can write back to us at PrajnaCapital [at] Gmail [dot] Com
--------------------------------------------- Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.
Invest Tax Saving Mutual Funds Online Tax Saving Mutual Funds Online These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)
Download Tax Saving Mutual Fund Application Forms from all AMCs Download Tax Saving Mutual Fund Applications
These Application Forms can be used for buying regular mutual funds also
Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )
------------------ Best Performing Mutual Funds
|
| Posted: 10 Sep 2013 01:55 AM PDT Invest In Tax Saving Mutual Funds Online Call 0 94 8300 8300 (India)
Companies are expecting these issues to do well this year on relaxed norms and attractive rates " The gap between the G-Sec rate and the coupon rate has been reduced this year. Thus, the coupon rate has become attractive " Harsh Kumar Bhanwala Executive director, India Infrastructure Finance Company WITH the government relaxing the norms for taxfree bond issuances and attractive coupon rate, companies are anticipating the issues to do well this year. Tax-free bond issues through the private placements route have already witnessed a good response. Rural Electrification Corporation (REC) public issue that opened on Friday was oversubscribed 1.83 times on the first day itself as per the NSE data. REC plans to raise Rs 1,000 crore, with an over-subscription option of Rs 2,500 crore. The issue closes on September 23 and is open for subscription in three tenures — 10 years, 15 years and 20 years. The taxfree coupon rate on these bonds will be 8.01 per cent, 8.46 per cent and 8.37 per cent for 10 years, 15 years and 20 years, respectively. Retail investors will be offered the bonds at interest rates of 8.26 per cent, 8.71 per cent and 8.62 per cent, for 10 years, 15 years and 20 years, respectively. "The private placement we did, at the same interest rates, was oversubscribed and hence, we expect good response to the tax-free bonds issue as well," Rajeev Sharma, chairman and managing director of REC had said in a press conference. Says Harsh Kumar Bhanwala, executive director, India Infrastructure Finance Company, "The gap between the G-Sec rate and the coupon rate was more last year, which has been reduced this year. Therefore, the coupon rate has become attractive. This year, the reference rate allowed is 80 basis points less than the GSec rate two weeks prior to the issue week, compared with 115 basis points last year. Thus the effective rate comes to 12 per cent for those in the highest incometax bracket." According to the government notification, the ceiling coupon rate for AAA rated issuers shall be the reference G-Sec rate less 55 basis points in case of retail individual investors (RIIs) and reference G-Sec rate less 80 basis points in case of other investor segments. In case the rating of the issuer entity is AA+, the ceiling rate shall be 10 basis points above the ceiling rate for AAA rated entities. In case the rating of the issuer entity is AA or AA-, the ceiling rate shall be 20 basis points above the ceiling rate for AAA rated entities. "We launched tax-free bonds under the private placement route in two tranches, both were oversubscribed and we collected Rs 1,800 crore. We would be seeking board approval on September 2 and by the end of the month would be coming out with the first tranche of the public issue of tax-free bonds. We have been autho rised to raise Rs 10,000 crore till March 2014. We may look at subsequent two tranches of private placement and three to four tranches of public issue," added Bhanwala. "We are working on the timings of these issues and on how to reduce the expenses. Bringing out an issue in October, which is the festival season, may hit collections. Also, if other companies launch their issue at the same time, collections would get impacted," added Bhanwala. The government has also enhanced the issue expense limit for companies to not more than 0.65 per cent of the issue size for public issue and 0.25 per cent for private placement. The issue expense would include all expenses relating to the issue like brokerage, advertisement, printing, registration, etc. Says an official of SBI Capital Markets, "There is a fairly good demand of taxfree bonds this time as the pre-tax yield is coming to more than 12 per cent. From the REC response, it is evident that demand is high from retail investors too." Another attractive feature is that the government has done away with the `stepdown' clause. Till last year, an investor buying these bonds through the secondary market was not given the higher coupon rate offered for retail investors. The government has also allowed issuers to earmark suitable amounts within their private placement allocation for placing with sovereign wealth funds, pension and gratuity funds without the requirement of book building procedure. According to the government notification, 40 per cent of a public issue of taxfree bonds has to be earmarked for retail individual investors and 20 per cent each for high net worth individuals, companies and qualified institutional buyers. Retail individual investors are those that invest less than Rs 10 lakh. Last year, poor investor interest saw the 10 (authorised) public sector units raise only Rs 25,000 crore from tax-free bonds against an approval of Rs 60,000 crore. This year, the government has allowed 13 PSUs to raise Rs 48,000 crore by issuing tax-free bonds. REC public issue that opened on Friday was oversubscribed 1.83 times on the first day itself The issue closes on Sept 23 and is open for subscription in three tenures -10, 15 and 20 years The coupon rate will be 8.01 per cent, 8.46 per cent and 8.37 per cent for 10, 15 and 20 years Happy Investing!! We can help. Call 0 94 8300 8300 (India) Leave your comment with mail ID and we will answer them OR You can write back to us at PrajnaCapital [at] Gmail [dot] Com
--------------------------------------------- Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.
Invest Tax Saving Mutual Funds Online Tax Saving Mutual Funds Online These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)
Download Tax Saving Mutual Fund Application Forms from all AMCs Download Tax Saving Mutual Fund Applications
These Application Forms can be used for buying regular mutual funds also
Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )
------------------ Best Performing Mutual Funds
|
| Posted: 10 Sep 2013 12:40 AM PDT Invest In Tax Saving Mutual Funds Online Call 0 94 8300 8300 (India)
THERE are times when investors feel frustrated because their mutual funds fail to perform as expected. They hope that things would turn for the better but as the time passes by, this does not happen. The worse comes when the mutual fund gives up on the investment and the fund house plans to merge two or more schemes so that there is a different investment exposure that arises due to this. This leads to a situation where an overall evaluation is required by investors. Nature of fund: One of the key parts of the entire investment is that in many cases, the investor wants a specific exposure and thus looks for a particular fund that can suit their needs. For example, if an investor wants an exposure to the infrastructure sector and hence has chosen a fund from this area then they would like to ensure that the nature of the investment is maintained. If the portfolio changes when the fund is merged with some other fund, then this condition would be violated. Investors would then have to ensure that they change their investment to some other fund that meets their original re quirements. This kind of check becomes necessary otherwise the change might affect the entire nature of their investment. Possibility of gains: A factor that is directly impacted by the merger of schemes is the expected return from a particular investment. A merger and a change in the overall portfolio can change the entire condition. It could be that after a long period of stagnation, there is a large rise in the returns that can be earned when the conditions in a particular area or sector get better. However, if the nature of the investment is changed, or the earlier portfolio gets diluted, then the amount that can be earned would not be possible. This will result in a situation where the possibility of the gains is not as expected. So, this becomes a critical factor to consider for investors. Risk element: There is a clear link between the risk and the returns that are expected. Usually, investors find that their positions are weakened when they face a risk that is higher than what they had initially expected. While this could lead to some higher returns, the risk becomes something to worry about. However, when it comes to these kinds of mergers between schemes, then there is a chance that the position has actually reversed, which is also a major cause for concern for every investor. If an investor is looking at a higher risk element to get the required return, then the change through the new investment could result in a position where the risk is now actually lower. But a lower risk might not always be good if the investor does not desire this and hence, while the investment might look slightly less risky, it would need to be in tune with the requirement of the investor. If this is not being done then the option would be to ensure that the choice in terms of the scheme is changed and that the necessary realignment takes place. Happy Investing!! We can help. Call 0 94 8300 8300 (India) Leave your comment with mail ID and we will answer them OR You can write back to us at PrajnaCapital [at] Gmail [dot] Com
--------------------------------------------- Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.
Invest Tax Saving Mutual Funds Online Tax Saving Mutual Funds Online These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)
Download Tax Saving Mutual Fund Application Forms from all AMCs Download Tax Saving Mutual Fund Applications
These Application Forms can be used for buying regular mutual funds also
Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )
------------------ Best Performing Mutual Funds
|
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