Is equity exposure safe?

Equity-Exposure

“Long shots almost always miss the mark.”
—Peter Lynch (American investor and mutual fund manager)

What is an equity fund?

Equity funds generate high returns by investing in the shares of companies of different market capitalization (large cap, mid cap & small cap). They generate high returns than debt funds or fixed deposits. The whole thing depends on is how the companies performance, which results in profit or loss and how much an investor can make based on his shareholdings.

Market Capitalization:

It is the aggregate value of the company based on the current share price and the number of outstanding stocks. Market cap is calculated by multiplying the current market price of the company share with the total outstanding shares of the company.

How does equity fund work?

An equity fund invests 60% or more of its assets in equity shares of companies in varying proportions. It might be the purely large cap, mid cap, or small cap fund or a mixture of market capitalization. The investing may be by value-oriented or growth oriented. Allocating a major portion of equity shares, half will go to debt and money market instruments. This will take care of a sudden fall in the market.

Performance of Equity funds in India:

All most all categories of mutual funds, equity funds deliver the highest returns. On average, equity funds have generated before-tax returns of 15% or more. The returns may fluctuate as per the market movements as well as the economic conditions.
To earn returns with good expectations, you need to choose your equity fund carefully. If you want to invest in Equity, remember the secret is to stay invested for a long period (>5 years).

Features of Equity Funds:

  • 80C tax exemption: Equity Linked Savings Scheme is the only tax-saving investment under Section 80C of the Income Tax Act. With the shortest lock-in period for 3 years.
  • Cost of investment: When one is frequently buying and selling equity shares it often impacts the expense ratio. While currently, SEBI has fixed the limit of expenses ratio at 2.5% for equity funds and they are planning to reduce the rate too.
  • Cost-efficiency and diversification: One who is investing in equity funds can start investing at a nominal amount.
  • Holding period: When one redeems the units of capital funds, one can earn a capital gain. This earned capital is taxable and this rate of taxation depends on how long you stayed invested in equity.

Taxation of Equity Funds:

Capital gains earned on the holding period of up to one year are called short term capital gains (STCG). STCG is taxed at a rate of 15%. Capital gains on the holding of more than 1 year are called long term capital gains (LTCG). LTCG in excess of Rs 1 lakh will be taxed at 10% without the benefit of indexation.

So what is better lump sum or SIP?

1. Systematic Investment Plan (SIP)

A SIP is where the monthly investment happens automatically on the pre-decided date. Where one can start investment from Rs. 500. Where we have to just grant permission to the fund company to deduct the investment from your bank account. SIP gives you the benefit that when the market is high you would be allowed a few units. And when the market is low, you will get more units.

Benefits of SIP:

  • SIP is considered to be a disciplined approach to investment.
  • One can achieve long term financial goal with SIP.
  • SIP can be started with a small amount of money.
  • Reduces risk because of Rupee cost averaging.
  • Timing the market is not necessary.

2. Lump-sum

This method can work over time. Because not everyone is feasible to arrange for a large sum. A SIP allows an investor to invest a fixed amount of money at regular intervals. It also gives an advantage of averaging the cost of units besides providing benefits of compounding. So we can say that opt for SIP rather than Lump sum investment.

You should invest in equity funds as per your investment objectives, your investment capabilities, and your risk-taking ability. Equity funds are not meant for short term investment. Maximum your funds will cook for five years of investment, accepting the versatile market one should invest in mutual funds.

MyWay

MyWay Wealth offers you to invest your funds in Equity. Being a smart investor one should choose the best investment option. One should always opt for investment which matches their financial goals and risk appetite. Equity definitely gives more returns than gold, real estate, and FDs.

Happy Investing!!

Know more on Growth and Dividend Option

Growth-or-Dividend

There are different kinds of mutual fund options available in the market. Every mutual fund scheme you choose will have two options: growth or dividend option. You can differentiate them based on their Net Asset Value (fund’s per share market value). Always remember, the various factors such as the behavior, objective, fund manager are all the same but the performance and results delivered are different.

Growth Options:

Under the growth options, you have to stay invested for a longer period to see the growth. The returns you earn are not realized immediately. You will not receive any payment in the form of dividends. The returns are realized only when you sell the units. The NAV on the date of the investment will be your cost price and the NAV on the date of sale becomes a selling price. The difference will be your returns.

The profit your funds make remains in the market and you get the benefit of compounding over the years. The number of units you buy remains the same, but the price or NAV keeps going up. It best suits for the investors who don’t need an income from their investments today but are targeting a corpus for future use.

Dividend Options:

The dividend options allow you to book profits periodically. This option is good for investors who need periodic income from their investments. The amount of dividend is not certain. When the NAV reaches a certain level, the fund house pays out the dividend. The dividend-reinvestment is different from your dividend options. In the dividend reinvestment option, profits are booked, but instead of declaring a dividend, the fund’s house buys more units at the current price. So your number of units goes up but the NAV remains the same.

Which option is best to choose?

This depends on factors like your investment objective and tenure. For Equity Mutual Funds, the growth option would be the best because you can make compounding earnings. If you plan to invest in the short term, Debt mutual funds will be the best. For short term investment in debt funds, you can go for a dividend option.
Thus,

  • Long-term needs: Equity Mutual fund with growth option is better.
  • Short-term needs: Debt Mutual funds with dividend option is advisable.
  • Mid-term needs: Debt Mutual funds with growth options can be better.

MyWay

You can invest in hand-picked funds through MyWay Wealth– India’s most trusted Mutual fund app for Direct Plans.

So start investing in Mutual funds to make your dreams come true.

Mutual fund as an Investment Option

Mutual funds

 

One of the best ways to ensure that you reduce the risk associated with your investment portfolio is through diversification across various asset classes. The percentage of investment in various asset classes will depend on your individual goals, risk appetite and time horizon for your investment.
Mutual funds are one of the most preferred investment options to investors who are wanting to invest in equity as they offer diversification and offset the risks.

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Invest Before It’s Too Late

term Insurance

“The best we can do is size up the chances, calculate the risks involved, estimate our ability to deal with them, and then make our plans with confidence.”
Henry Ford.

Why you need a life cover?

Not to save taxes, not for a secure retirement, not because the advertisement agency put together images of happy families doing cool things together. Not because you are arm-twisted into buying a policy by a family member, a friend, a neighbor, your bank or just a ‘wont-take-a-no-for-an-answer’ agent.
You need a life insurance cover for only one reason: To protect your family’s financial health if you die an untimely death.

It’s you who has to figure out how much the family will need to live without you bringing in the monthly income and how much money is required for the further of your kid’s education and marriage.

Now let’s look at some of the plans that help you to get a cover.

1. What is typically an endowment plan?

An endowment plan offers a life cover as well as a saving option. Your nominee gets the money in case of your unfortunate demise if you outlive the policy period.

  • Price: On the other hand, the endowment plan provides a maturity benefit, along with the additional features such as maturity benefit, rider benefit, terminal bonus, reversionary bonus, of this policy makes it so expensive.
  • Sum assured: The sum assured is not high in the endowment plan as compared to the term insurance plan. This is because the endowment plan fills the aim of savings. You need a lover sum assured but also a maturity benefit.
  • Aim of cover: The endowment plan helps you to save for your future goals. It gives you guaranteed returns and caters to future savings.
  • Payment options: In an endowment plan, the payment is lump sum either at the death of the policyholder during the policy term or as a maturity benefit on the completion of the policy term.

 Disadvantages of endowment plan:

  • Its low yield policy.
  • The surrender value is lower than the premium value.
  • The premium is higher than the term plan.

Example:
Mr. Bond is the policyholder. His age is 25 years. The plan for what he has opted is a term plan. Sum assured is 20 lakhs. The duration of the plan is 25 years. And yearly premium he has to pay is 6443.

2. What is the term plan?

The term insurance plan offers you a life cover. It is a simple life insurance plan that promises to pay a sum assured if the policyholder dies during the policy period. If he outlives the term there is no maturity benefit.

  • Price: Since a term plan doesn’t offer any return and only provides risk cover it is less expensive.
  • Sum assured: The sum assured in the term plan is high. That is possible because it covers the risk, by fulfilling the need for protection.
  • Aim of cover: In term insurance, the nominee receives the sum assured in a lump sum, or in equal installments or a contribution in case of the death of the person during the policy period.
  • Payment: The policyholder has the option to customize the payment option based on the family needs.iIt can be a lump sum, monthly or combination of both.

Advantages of term plan:

  • Term insurance is the simplest form of life insurance to understand.
  • Term insurance is a sensible choice for people who are building a family.
  • Lower initial cost when compared to an endowment plan.

Example:
Mr. Bond is the policyholder. His age is 25 years. The plan for what he has opted is an endowment plan. Sum assured is 20 lakhs. The duration of the plan is 25 years. But here in an endowment plan, he has to pay 86616 yearly.

In short:

PlanDescription
Term Plan1. Life cover
2. Fixed term
3. No maturity benefits
4. Death benefits
Endowment Plan1. Life cover
2. Maturity benefits = Sum Assured + Bonus + Additional bonus
3. Death benefit = Sum Assured + Accrued Bonus + Additional Bonus (If Any)

Here are the features of Term and Endowment Plan

BenefitsTerm PlanEndowment Plan
Maturity BenefitNoYes
Death BenefitYesYes
Premium AccountLowHigh
LiquidityNo
Yes
Investment SavingsNoYes
Tax BenefitsYesYes

Let’s look at some of the pointers before you take a cover:

  • How much cover do I need?
    You need to buy insurance for all the debt. Each time you take a large loan – usually a home loan, sometimes on a personal loan – buy a term cover for the full amount for the loan that you take.
  • When it is a good time to buy?
    Buy as soon as you have dependents or the possibility of getting dependants. Touching thirty is usually a good time to buy the cover. You are old enough to have a good income flow and not that old for covers to be too expensive. The cost of life cover rises exponentially as you age.
  • Which policy to buy and how much to buy it?
    Term insurance is a pure vanilla product. You pay a premium if you die the company gives you the cheque to your spouse. Since its the long term plan, so remember you are getting your cover till your retirement.

Now that we know the Term Plan is the best option, Why Delay? Start investing in Term Plan through MyWay Wealth. The app has a user-friendly interface, completely paperless process and charges no fees or commission.

Term Insurance - MyWay Wealth

All you need is a few minutes on your smartphone and you will be able to provide a cover of 1 crore to your family, with the same amount with which you get a Netflix monthly subscription. So Make Your Investments Today.

Protect Your Family with MyWay Wealth!

Why MyWay is India’s most secure platform for investment?

Dear Customer,
I noticed you haven’t started with the investment process yet. People often hesitate to invest in digital platforms because of security and trust issue.

Don’t worry, investing in MyWay Wealth is 100% safe and secured. Here is how we ensure safety and security:

  • 256-bit Secure Socket Layer (SSL) encryption
  • All payments are routed via BillDesk (PCI – DSS Compliant)
  • All  orders are executed via Bombay Stock Exchange (BSE)
  • MyWay is a SEBI registered Investment Advisor (INA200005323)

Also, we have built a smart fund recommendation to suit your investment goals and style.
I assure it would hardly take 2 minutes to complete the process. For your ease, I am adding a direct link for the same.

If you have any concern, please write to us at ask@mywaywealth.com or call at +918048039999we would be happy to answer your query.

Introducing National Pension System (NPS) on the MyWay Wealth app!

Now invest in NPS on the MyWay Wealth app and save more taxes!

Secure our future with MyWay app

Dear Customer,
We are glad to introduce a brand new product on the MyWay Wealth app – National Pension System. Now you can invest in NPS on the MyWay Wealth app without any paperwork in a completely digital manner!

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Now invest via UPI on MyWay Wealth

We wanted to share an exciting update with you. In our effort for making the payment experience superior, we have introduced UPI as a payment option on MyWay Wealth. Here is how it works:

  • Install MyWay Wealth app, finish paperless KYC in 5 minutes and choose Top Rated Mutual Funds to invest in.
  • You need to have a VPA (Virtual Payment Address) for your bank account. Once you choose UPI as a payment option, you will be promoted to enter your VPA.
  • A payment request will be sent to your native UPI app (e.g. BHIM, Google Pay, any bank’s UPI app, etc.) and you will receive a notification about the payment request.
  • Pay from the UPI App and return the MyWay Wealth app.
  • Your transaction is successful and you can track the same in the reports section.

We know the value of hard-earned money, and we guarantee absolute peace of mind on your purchases. Signup now to start investing in Direct Mutual Funds, Term Insurance and National Pension System (NPS).

Happy investing!

Reasons to invest in Mutual Funds!

1. Expert advice

The Mutual funds you invest in are taken care of by Experts, who make instant changes in your scheme as per changing trends in the market. Thus you can easily review the growth in your investment.

2. Close Supervision

  • The Companies that deal with your investments are closely monitored by SEBI. Such strict regulations compel companies to make necessary disclosures at regular intervals.

  • Even online platforms, such as MyWay Wealth, require you to complete KYC (Know Your Customer) compulsorily to ensure safety of your investments.

3. Wide range of options:

Your risk appetite is unique and hence Mutual funds provide various funds like: Balanced funds, equity mutual funds, monthly income plans, income funds, and liquid funds to meet your investment goal.

4. Reduces risk

Mutual funds provide you broad exposure to various stocks such as bonds, shares, equities, etc that are carefully selected by professionals further reducing your burden.

5. Liquidity

Mutual funds allows your to convert your investments into physical cash to meet your immediate needs incases of emergency, within 1-3 days.

6. Low Costs:

The transactions costs charged by Direct Plan mutual funds are relatively cheaper than other investments. Install MyWay Wealth, which is a Direct Plan mutual fund investment app to start investing.

7. Planned Investing

Mutual funds help you to maintain a disciplined lifestyle instead of trading based on your fear or greed in the stock market directly, thereby encouraging long term investments.

8. Smaller investments

You can start investing in mutual funds with just Rs. 500.

9. Flexibility

Mutual funds provide you two investing options: regular deposits (SIP) or lump-sum payments.

10. Tax Benefits

Mutual fund provide tax advantages, that you get more profits.

11. Available on apps

You can make investments in mutual funds with just a few clicks using your smartphone. These platforms give advice, track and provide alerts on your investment plans. And its simplified as it is completely paperless.

12. Higher Returns

Since Mutual funds are linked to stock markets you can earn higher returns and beat high prices when compared to traditional instruments such as Fixed Deposits.

If 12 reasons couldn’t convince you to invest in mutual funds, I don’t know what will! Signup now to start investing:

Accomplish more with MyWay Wealth’s Advanced Research Reports!

We are excited to announce the launch of our newest feature – Advanced Research ReportsThese reports are the perfect companion for investors to take a well-informed decision, and make the best returns from investments.

Key highlight:
Portfolio Analysis

  • Detailed analysis of the fund’s portfolio and sector exposure.
  • Check out top holdings and more.

Performance Analysis

  • Return analysis across multiple investment periods.
  • Index VS Fund Growth

Risk Analysis

  • Category Risk and Return matrix
  • Various other risk indicators like alpha, beta and more.

We hope that you will like this new feature of your MyWay Wealth app, and make the best out of it. Click here to download MyWay Wealth app to start investing in Direct Mutual Funds, Term Insurance and National Pension System (NPS).

Alternatively you can signup online to start investing:

Advanced Research Report

ZERO COMMISSION. ZERO FEE. ZERO PAPERWORK.

 

 

 

Team MyWay wishes you Happy New Year 2019!

MyWay Team wished you great new year.

Why one should invest in SIP through MyWay?

Fund recommendation

Fund recommendation engine:

Invest in Funds which have constantly outperformed market.

Real-time tracking

Real-time tracking:

Track/monitor your investments with a click of a button anytime, anywhere.

Portfolio Rebalancing

Portfolio Rebalancing:

Get your risk covered by periodically balancing your portfolio.

Do-It-Yourself

Do-It-Yourself:

You can invest in over 5,000 direct plans in your own way.

So, what are you waiting for? Signup now to start investing:

If you have any concern, please write to us at ask@mywaywealth.com or call at +918048039999, we would be happy to answer your query.