Investment Advice for Defence Personnel

In a country where event managers are paid for organising weddings and nutritionists are paid for making diet plans, financial advisors struggle to make a case for earning a fee. Only a small segment has managed to break through the resistance. Investors continue to save, invest, and borrow without any framework or process in place and assume they can manage their money. Why does one need a financial advisor at all? There was a time when getting a job meant meeting "commitments." There were siblings who needed college education; there were marriage expenses; and, there were elderly parents to take care of. Today, a young earner begins financial life on a firm footing - a regular surplus income. He acquires a bank account and a debit card with the job. By the end of his first year of earning, he has bought some tax saving products and applied for loans ...

Investing is an essential aspect of financial planning and wealth-building. However, many individuals fall prey to common investment mistakes that can hinder their long-term financial success. As a financial advisor, it is crucial to educate clients about these pitfalls and guide them toward making informed investment decisions. Here are some common investment mistakes and strategies to avoid them: 1. Lack of Proper Research: One of the most significant mistakes investors make is jumping into investments without conducting thorough research. It is vital to understand the investment product, assess its potential risks and returns, and evaluate how it aligns with your financial goals. Conducting due diligence, reading prospectuses, and seeking professional advice can help make more informed investment choices. 2. Emotional Decision-Making: Allowing emotions to drive investment decisions can lead to poor outcomes. Fear and greed often push investors to make impulsive decisions, such as panic selling during market downturns or ...

Indians have always considered Gold as a safer option to invest vis-a-vis other investment opportunities like equities, fixed income, real estate etc. Gold’s ability to act as a hedge in times of financial emergencies is one of the main reasons for the yellow metal to find a favour with Indians. Gold is also believed to be auspicious and in addition to this has proved to be a prudent investment option for a long time now. In the last few years, we have been seeing a trend wherein young and savvy investors are looking at gold as more of an investment instrument rather than a commodity to be passed onto posterity. Hence, they prefer to invest their surplus into gold via instruments which are hassle-free and are more viable than investing in physical Gold. The mutual fund industry offers multiple alternatives to physical gold if investors wish to take an exposure ...

Introduction: When it comes to achieving long-term financial success, asset allocation plays a crucial role. The concept of asset allocation entails a deliberate and tactical allocation of investments among diverse asset classes, encompassing stocks, bonds, real estate, and cash equivalents. This approach aims to balance risk and reward, optimize returns, and protect against market volatility. In this article, we will explore the importance of asset allocation and provide data to support its effectiveness. Diversification and Risk Management: Asset allocation allows you to diversify your investments across various asset classes and sectors. Diversifying your investments effectively lessens the influence of an individual investment's performance on the overall performance of your portfolio. This diversification helps mitigate risk and protect against potential losses. Studies have shown that asset allocation, specifically diversification across asset classes, can reduce portfolio volatility and improve risk-adjusted returns over the long term. Data: A study conducted by Brinson, Hood, ...

Debt funds invest exclusively in fixed-income instruments securities like bonds, debentures, Government securities, and money market instruments such as certificates of deposit (CD), commercial paper (CP), and call money. Here are the different types of debt funds in India: Government Securities (G-Sec) Funds: Invest in government-issued securities such as treasury bills and bonds. These funds carry low credit risk but are sensitive to interest rate movements. Corporate Bond Funds: Primarily invest in corporate bonds issued by companies. The risk and returns vary based on the creditworthiness of the issuing companies. Money Market Funds: Invest in short-term debt instruments such as treasury bills, commercial papers, and certificates of deposit. These funds aim for capital preservation and provide high liquidity. Short-term Funds: Invest in fixed-income securities with a short maturity period, typically less than 1-3 years. These funds aim for stable returns with relatively low-interest rate risk. Medium-term Funds: Invest in fixed-income ...

What does debt investing mean? I understand ‘debt’ to be money borrowed. But I want to invest! When you lend your money to a bank (by putting your money into your savings bank account or making a bank deposit) or to a company (by investing in a company deposit) or to the government (by investing in bonds offered by state institutions such as IRDA – Insurance Regulatory And Development Authority & SIDBI - Small Industries Development Bank of India, etc. or making your Public Provident Fund (PPF) deposits or by investing in post office schemes), you are making ‘debt’ investments. While for you it actually means saving or investing money, for the borrowing entity (the bank, the company, the government, etc.), it means borrowing money. Debt investing – through Mutual Funds! But I thought Mutual Funds only invest in equity? Mutual funds are actually money managers. They offer different schemes ...

At the start of every New Year, there are a series of articles focused on which asset class is likely to do well for the next 12 months. There are two fundamental problems with such a discussion: It limits the time frame of the discussion to the next 12 months. This is tantamount to projecting what your child will grow up to be like based on what he ate for breakfast this morning; There is a false assumption that, though you may be guided into the right asset class by your private client wealth advisor, you will be sold the correct specific investment as opposed to the instrument which pays the wealth advisor the highest commission. This is tantamount to saying that because your child goes to school he actually learns something useful on how to deal with life. Stocks are risky, but can make you money Since January 1981, ...

The benchmark BSE-Sensex is back at 21,000 levels. And suddenly there seems to be a rush of enthusiasm amongst market participants. Just to recall, the first time the Sensex had touched the 21k level was in January 2008. Then as we know, the markets crashed in response to the global financial crisis. Then again in November 2010, Sensex again hit the 21k level. And again the markets tanked after scaling that level... So the one obvious question on everyone's mind is ' Where will the Sensex go from here? Will it tank? Will it scale new highs? What is the answer? We beg to differ in our perspective of this entire situation. In our view, the question itself is flawed. For one, the 21k level denotes nothing more than a mere psychological point. Investors have seen the Sensex scaling this level and then correcting sharply. So there is a collective ...

When we sent a promotional mail to our subscribers few days back, we received a good response for these bonds including from some very young persons. We quizzed some of them and found that they really did not understand the actual nature of these bonds. We were actually able to dissuade some of them not to apply for them while rang up some older subscribers to get to subscribe to them. Given below are clarifications on what are these bonds and to help you decide if they are for you:- What is the Buzz about these Bonds? This financial year (FY 2013-14), the Govt has allowed Nine Public Sector Units (PSUs) to issue tax-free bonds totalling Rs 48,000 Crores. Rural Electrification Corporation (REC) has already finished with one such offering, while HUDCO (Housing and Urban Development Corporation) is in the market with their issue currently. Others will also come subsequently ...

Dear Friends, We had given a mail to you all yesterday highlighting salient aspects of Budget FY 2013-14 of concern to you. We received a lot of queries on the same, most of them pertaining to RGESS. People primarily want to know if RGESS can help them save additional tax. We demystify the same below. 1. Why RGESS? Ans: Indians are very good money savers but their maximum money is locked-up in low yielding debt products like Provident Funds (EPF, PPF, DSOPF), bank FDs / RDs, Post Office schemes, NSC / KVP / SCSS etc. The Govt had announced a scheme called ‘Rajiv Gandhi Equity Saving Scheme 2012’ (RGESS) last year with an objective of encouraging new retail investors to route their savings into the domestic capital market. Since tax-saving is a big driver for Indians, the Govt has tagged a small tax-saving incentive also to it. 2. Who is ...