Here’s what’s going wrong with your investments!

“No matter how great the talent or efforts, some things just take time. You can’t produce a baby in one month by getting nine women pregnant.”
Warren Buffett

Your impatience is understandable.
Equity markets are spinning at a dizzying pace, there’s more chaos than order and lastly, you are yet clueless about how should you react in such a situation – worry because bellwether indices are going bonkers by the day or happy because your portfolio isn’t imitating the magnitude?

But just because a behavior is understandable doesn’t really make it rational.
A child may cry and yearn to get an extra helping of his favorite dessert – the behavior is understandable but is neither rational nor in his best interests. Similarly, you may be sweating with anxiety by simply reading the pink newspapers but instead of following the number one rule to make profits – “buy low, sell high”, you would still deliberate on doing the exact opposite; again an understandable but irrational behavior.

Here’s some trivia that will help you draw a parallel with what’s happening with your investments
The Chinese Bamboo is among the world’s tallest and strongest grass. But wait, this isn’t the most noteworthy aspect of the bamboo. Read on and you’ll be amused.

The bamboo requires a lot of nurturing and care with adequate water, fertile soil, high-quality fertilizers, and ample sunshine. But if you were to grow the bamboo, you would realize that despite all precautions and careful nurturing, the bamboo does not even peek out of the ground for four years!

Yes, even after persistent and diligent attention, you wouldn’t even have a bud to show for it for four years! But, in the fifth year, something astonishing happens –

The Chinese bamboo grows up to a height of 80 feet in only six weeks!
Does the seed simply lay dormant for the first four years and suddenly, in the fifth year, decide that it’s time to shoot up? Obviously not. The first four years were, in fact, crucial for the seed to develop its foundation and roots underground and make it strong enough to support the exponential growth in waiting.

Now, what would happen if you dug into the soil every month and took the seed out to inspect or simply dig it out in the second or third year losing all hope? A lot many things could’ve happened but there’s one thing that would definitely NOT happen – you would never be able to see the Chinese bamboo you’ve dreamt about.

Similarly, India has jumped ranks in the Ease of Doing Business rankings, GST refunds are being fast-tracked, the Insolvency and Bankruptcy Code has brought back significant capital back into the banking system, liquidity is being bolstered through several collaborative measures between the Government & RBI and another good set of developmental reforms are underway. Sure, the system and markets may seem dormant but there’s no reason to not believe that it’s simply strengthening the foundation to create a $5 trillion economy in the next five years.

To offer more context, 2016 was a year of major structural reforms and events including the RBI governor’s abrupt exit, demonetization and the GST proposition being tabled – the impact of which continued and reflected in CY 2017 only to be topped up with additional geopolitical uncertainties like the domestic elections and global trade wars. However, for the same period which laid grounds for a synchronized global slowdown, India continued to remain resilient.

To the naïve investor, an 11% CAGR would seem petty but ask any investment veteran and you will understand that it always is about the relative performance gave that an opportunity is only as good as it stands against the next best opportunity.

While the multiple squiggly lines in the above graph may seem overwhelming, all you need to focus your concentration on is the thick blue line (NIFTY) and how it has outperformed other developed and developing economies’ indices.

So, there is merit in sitting tight while the seed of an economic reform strengthens its roots underground and continue having faith until the economic bamboo spurts out of the ground. Meanwhile, it is strongly beneficial to step up systematic investment/transfer plan amounts and make the to sow as many seeds you can at a lower cost to benefit from the imminent growth.

Time in the market beats timing the market, any day!

Group health insurance

What is Group Health Insurance Plan?

The employer purchases a group or corporate insurance on behalf of employees. This is one of the key benefits received by employees from employers. At times, Group insurance health plans cover the family members of the employees.
Besides offering access to affordable health coverage services, it also benefits the employers for retaining the employees and gets tax benefits.

Key features of the plan:

  • Offers a cashless facility and direct settlement of the bills with the hospital.
  • Covers pre and post hospitalization expenses for a specific period.
  • Extends cover to critical ailments.
  • The policy also covers domiciliary expenses (Domiciliary Hospitalization – medical treatment for a period exceeding three days for illness/disease/injury which in the normal course would require care and treatment at a Hospital)
  • It provides cover for pre-existing diseases after payment of extra premium.
  • This plan may offer maternity benefits.
  • Daycare procedures covered.
  • Few insurance companies cover Non-Allopathic Treatments for a specified limit.

(more…)

senior citizen coverage

What is Senior Citizen Coverage?

Getting old makes you see life from a different perspective. Health is the first companion that starts deserting along with it your hard-earned savings. A Senior Citizen Health Insurance assists such times. There are various health insurance plans, specially designed for senior citizens.
Health insurance for senior citizens is offered by different insurance companies to provide you financial security by covering all your medical expenses. Gifting health insurance to your aged parents is the best way to care for their needs.

Why buy health insurance for senior citizens?

  • They are more prone to illness
  • You buy a plan to ensure that medical emergencies are taken care of in a systematic and hassle-free way.
  • Unexpected health issues and money crisis makes aged people feel guilty, and they think they are like a burden to a family.

(more…)

When push comes to shove: GoI does not shy away from doing what it takes

“Mood of doom and gloom is not going to help anyone. I am not saying we maintain a Panglossian outlook and smile at everything — I don’t expect people to smile away difficulty — but a mood of doom and gloom will not help anyone,”

-Shaktikanta Das
Governor, RBI

Desperate times call for desperate measures.

This has never been more than in recent times. With India staring at the incoming wave of a global slowdown, the two biggest forces – Ministry of Finance and Reserve Bank of India have decided to keep their long-standing feud aside and attempt to insulate India through growth-inducing measures, reforms, and policies.

Over the past couple of weeks, Nirmala Sitharaman had announced a slew of big-bang measures including rollback of the controversial surcharge on equity capital gains, intent to recapitalise public sector banks, dispose angel tax, fast-track GST refunds while the generally conservative RBI decided to move out of its comfort zone and pay out a surprisingly large sum of INR 1.76 lakh crore.

While these measures are expected to be instrumental in the economy, Finance Minister Nirmala Sitharaman chose to not wait for more data and in fact acted proactively by calling for another press conference late Friday this week with another set of surprises. Following are a few highlights of the announcements made during the press conference.

inference

Key takeaways for investors:

We continue to maintain a stance that now is a good time to start accumulating through systematic plans with a medium-term horizon. The short-term outlook for Indian equities is that markets are expected to be highly volatile in the short term and offer massive wealth creation opportunity for investors willing to ride the tide and participate in the imminent recovery. Investors with a moderate investor profile and time horizon of 5+ years can choose to explore top highlighted funds in the multi-cap category.

21.49% (पिछले 1 साल मे): निवेश कीजिए IDFC गवर्नमेंट सिक्युरिटीज कांस्टेंट मेचुरिटी फंड मे

Get 21.49% (past 5Y) returns in IDFC Govt. Securities Constant Maturity fund!

NPS

NPS – your perfect choice to save extra up to ₹15,480!

True freedom is when we have financial independence and security, isn’t it? We invest with the hope to achieve this goal. How about you invest in a government-backed scheme that not only secures your retirement but also gives you the right exposure to equity and helps you to save tax?
Yes, MyWay Wealth smartly puts all your investment needs in one box and presents to you…

National Pension Scheme

NPS is a government introduced retirement plan, regulated by the Pension Fund Regulatory and Development Authority (PFRDA). NPS has a perfect definition of diversification as it includes equity, bonds, and government securities in its scheme. This composition of NPS yields returns ~9% to 12% which is way higher than other pension options such as PPF (7.9%), APY (8%), SCSS (8.6%) and FDs (8.25%).

Not just that! Under section 80 CCD, NPS lets you save upto ₹15,480 in taxes (over and above savings under section 80C) if you invest ₹50000 in any financial year.

Let’s see a sample NPS portfolio for a 35-year-old who makes a monthly contribution of just ₹5000 in NPS until the age of 60 years. Assuming an interest rate of 10%, he would earn a total pension wealth of ₹65,96,366 with just a principal amount of ₹15 lakh. Thanks to the power of monthly compounding!!

Gold Prices Spiked ~19% (YTD) Buy 24K Digital Gold Now!

Did you know that the price of gold has risen nearly 8% so far this August and about 19% in 2019? Yet, we Indians still love gold. But is it wise to buy it in its physical form?
Let’s find out!!

  • 1gm of gold today costs Rs. 4000. But the price turns out to be high when you buy physical gold as it includes making charges and taxes.
  • Purchase of physical gold causes you to worry about its safety and maintenance. Leaving the gold at home can raise the concern of theft, whereas placing it at banks can cost storage charges.
  • Liquidity can be an issue — there’s no guarantee that you will get the complete resale value on your gold.

Is there a better alternative to physical gold?
MyWay Wealth has just the right solution. Buy gold for as low as Rs.1000 !!! Presenting…

24 karat Digital Gold with 99.5% Purity!

Digital Gold gives you the freedom to buy gold at an affordable live price quoted. Also combines the benefit of safety by offering BRINK’s – secure locker with 100% insurance cover. Not just that; You can sell any amount of gold above just Rs.1 and get the amount credited to your bank account within 3 days or get it delivered at your doorstep in the form of gold bars & coins.

You don’t want to miss this opportunity!

Decoding Side-pocketing in mutual funds!

Side-pocket, as literally explanatory, is a provisional pocket to cast aside a certain fraction of the total funds available – in our context, to the mutual fund.

Side-pocketing as a concept was first brought into mainstream discussions in 2015 when Amtek Auto’s credit rating was downgraded by several notches and was classified as a potential default. At the time, JP Morgan AMC had significant exposure to Amtek Auto’s debt instruments and the investors incurred heavy losses on account of the write-off in value. Now, such negative returns triggered panic and heavy redemptions by investors – now, as you can imagine, Amtek Auto’s securities were illiquid (could not be sold since there were no buyers) and the AMC had to start offloading good & liquid instruments to meet redemption requirements and as a result, the proportion of good to bad securities dropped and the AMC was left with a larger exposure to the bad assets – practically causing a run on the system. Though JP Morgan tried freezing redemptions, but the regulator did not permit such a restriction. This led to discussions around the possibility of mutual funds creating a side-pocket.

(more…)

RBI’S INR 1.76 Lakh Crore Defibrillation to The Indian Economy

Following Nirmala Sitharaman’s prescribed economic booster shot late last Friday, RBI decided to inject the Government coffers with a heavy dosage of surplus reserves of INR 1.76 lakh crore late evening yesterday.

This slew of economy-reinvigorating measures by the GoI and RBI’s large-hearted contribution comes amid a time when India is surrounded by a global, synchronized slowdown. This time, with global pressure mounting and the Indian economy staring at a downside risk of 30bps-40bps, RBI loosened its grip on fiscal prudence and seems to have acknowledged stimulus as the need of the hour.

The Bimal Jalan committee was set up under the stewardship of the renowned former RBI governor Bimal Jalan with an objective to recommend ways to utilize RBI’s excess cash reserve and part transfer to the Government of India. Though RBI has been among the most resilient Central Banks globally in terms of deviating from the established norms for fiscal prudence, the committee’s recommendations were reportedly guided by the fact that the central bank’s resilience should be in line with larger public policy objectives.

(more…)