Make wiser investments in Gold

Gold funds

“Gold has two significant shortcomings, being neither of much use nor procreative”
-Warren Buffett

One of the most prominent investors of our time, Warren Buffett is known for his advice on investments is telling people to trade in anything but “gold”. However, we Indians love gold and just cannot let it go. It would be hard to find a person who has not invested in gold in one form or another. There are those who buy gold jewelry for different occasions like weddings, festivals, etc., while others look to make a profit.
“Gold is not an investment at all!” said the Vanguard founder and former CEO, John Bogle in an interview with CNN. “Gold is speculation. It has absolutely no underlying intrinsic value,” said the American investor, who is known for promoting Mutual Funds. An investment that only recently became popular among the average investor for its low-cost and high earning schemes.
Did you know that you can invest in gold through Mutual Funds? This investment vehicle collects the money and invests in physical gold without the hassles of storage and low yield. There are two ways you can go about it. One is to invest Gold Exchange Traded Fund (ETF) and the other is to simply invest in Gold Funds. Let’s see how they differ from each other :

 

Gold ETF

Gold Fund

  • Investor trades in the

physical gold through an exchange.

  • A Mutual Fund scheme which invests on the Gold ETF and other related assets.
  • Can be purchased from the stock exchange and requires a Demat account.
  • Can be purchased in Mutual Funds without a Demat account.
  • Gold ETFs are priced transparently based on international gold prices.
  • Gold Funds invest in Gold ETFs and other related assets, their NAVs are dependent on gold prices as well as prices of other assets that funds hold.
  • Gold ETFs typically require a minimum investment amount of 1gm gold which is close to Rs 3,000 at current prices.
  • Gold Funds allow a minimum investment of Rs 1,000 (as monthly SIP).

 

If you were determined to purchase gold, do so with the better investment vehicle. Since Gold Funds are professionally managed, they are preferred over physical gold, even though it holds less liquidity. Using the MyWay Wealth App, any person can trade in these funds with his specific appetite of risk. Explore More on Top Rated Gold Funds

So go for the real gain, not just for the gold!
Think MyWay Wealth!

Investment fads come and go, but choices remain the same.

Investment fads

The age-old fundamentals taught to us at schools never change, right? A Gurukula has now become a Convent, or a blackboard could have changed to a smart-board but the values imbibed in us remain the same.

Same works for Investment Choices.

The performance of the Indian Economy can be determined with the help of the GDP (Gross Domestic Product). GDP in simple words is the market value of all the final goods and services produced in a period of time. India’s GDP growth rate was 8.3 percent in the year 2003, raised to 10.4 percent in 2010 but fell to 3.2 percent in the year 2013 and again saw a rise in the year 2017 with 6.7 percent as the growth rate.

So an Economy depends on various economic factors and numbers do fluctuate, so it’s quite natural for other indicators like Inflation, Interest Rates, Corporate Profits, Currency Strength and also Stock Market to go through a roller coaster ride. The Indian Economy is facing a shock wave and we definitely foresee a doubtful future with the three C’s of Confusion, Consternation, and Concern.

The Stock Market is known for its volatility in stock prices. But trying to track the Stock Market on a daily basis to gauge the performance of your long term equity funds, is like trying to find a needle in a haystack. Yet, there are people who do this as a job, they are called Traders or Speculators and it is their role to inspect the market minute to minute. 

But we are investors. Most of us are salaried people and do afford to set aside savings every month. But the normal mistake seen in investors is that we get into a “herd mentality”. We buy more when the market goes up and sell when the markets go down. It’s likely we follow the herd and do what other investors do. But in reality, the ones who make money are the ones who stay invested.

So rather than getting baffled by the volatility of the markets, what we can do is invest a small chunk of our savings every month in equity through a well-structured plan called SIPs (Systematic Investment Plan). If you invest with the objective is to make high returns from your valuable investments, then the best way is to stay put for a long time. By doing so, you will not only earn index-beating returns but also meet the rising prices in the economy. So all you need is the fourth C: Consistency.

illustration

Behavioural Finance plays a key role in understanding the investment activities of people. Another aspect where the “herd mentality” can be seen again is with Gold and Real Estate. 8 out of 10 people in a family gathering or a common forum will brag about their success stories of earning high returns by investing in real estate or gold. But what they don’t include is the making charges that go into Gold returns and transaction costs, taxes, cost of maintenance, registration or stamp duty, when it comes to Real Estate. And not to forget about the hassle involved in finding or selling property in India, including the cost of fixing the house for the tenants. Also, we don’t keep a close watch on the property prices or gold prices as much as we look at the day-to-day variations in the stock market. If we did, we would realize that Gold and Real Estate also go through volatility. When it comes to risk, Real Estate does go through price, liquidity and legal risk and Gold is equally risky as it is not a source of regular income. But thanks to the stock market, although it is risky, at the same time it is also transparent, helping us to track them and also help in creating and generating wealth/income.  

If you’re a person who reads and consumes a lot of knowledge on Mutual Funds, you would have noticed that a number of books, magazines or articles still follow“Logical Investment Techniques”. Where investors like you and me gasp at day-to-day conditions in the stock market and ponder on our decisions regarding  funds, famous authors like Monika Halan (Editor, MintMoney and author of “Let’s Talk Money”) and Dhirendra Kumar (Founder and Chief Executive, Value Research and author of “Best Investments”), believe that equity fights inflation, provided you stick to the knit.

To get access to top recommended Equity Mutual Funds, MyWay Wealth is a one-stop destination. From Equity to mid-cap funds, tax saving to advanced investing, you can find them all on MyWay. And for investors who feel Gold is a good investment option, you still invest in them through Gold funds with MyWay rather than physical Gold. All you need is a few minutes to complete your KYC process and input your monthly contribution.

MyWay Wealth

As stated before, numbers in an Economy aren’t stable always, volatility in the market shall prevail, but what remains unchanged is that fact that your investment decision will rely on your risk appetite and your financial needs. This will not alter even if you would choose a bank for an investment or an app for the same. For example: If Equity funds through Systematic Investments Plans (SIPs), was your choice to meet your short term goals 5 years back, then, you can still choose the same investment for your present goals. All that would change is the amount you would deposit through SIPs (it’s wise to increment the amount you contribute to SIPs as and when you’re earning potential increases) which will be according to your present goals, needs, and profile.

Remember not to get disenchanted with the daily fads of the Stock Market.

Equities! A Smart Way to Invest

EquityPeople normally don’t find it safe to invest in Equity. They consider it a gamble. Why? Because your shares are traded in the stock market which is subjected to market fluctuations. Then why does Monika Halan, consulting Editor for Mint, state “I Love equity funds”  in her book “Let’s Talk Money”.

Let’s look at this picture:

Think smart

Surprising! The most trusted instruments such as Fixed Deposit multiplies wealth only by 20 times whereas investments in Equity multiplies it by 260 times.

Equities are stocks, meaning shares of a company. When you invest in equities it means you own the shares of a company and are partial owners of the company

Here are some benefits of investing in equities:

  • Higher gains: As mentioned before investments in equities are subjected to market conditions, so one has more potential to earn higher gains when the market price of a share rises.
  • Dividend: If the company you invest in performs extremely well then, as equity shareholders of the company you are entitled to earn dividends.
  • Authority: Once you invest in shares of the company you get voting rights in the company, meaning you can exercise control.
  • Easy transfer: The shares are listed in the stock market and hence if you want to sell your shares, you can do so easily, thereby increasing liquidity.
  • Bonus shares: At times, a company can issue additional shares instead of dividends to existing shareholders.
  • Higher Claim: Since you are the owner of shares in the company, it also means you get to enjoy a share of the incomes of the company.
  • Right shares: There are chances that you receive “Right Shares” when the company goes in for further expansion of capital. Owning these shares, you get higher preference than the general investors.

 

All these benefits make you feel so important and prioritized. But the hitch is how do you know which company’s stock performs well? How are your shares trending in the market? When to sell or buy?

This arises the need to understand the difference between investors and traders. The work of a trader is to track the market minute to minute and closely monitor the fluctuations in the stock. But as an investor, you must ascertain your investment horizon and financial need, invest in Equities and to stay invested until investment purpose is achieved. Remember, “time in the market” is important not timing the market.

The best option to invest in Equities is through Mutual Funds. Even Monika Halan says that she doesn’t buy shares directly but rather invests in Equity through Mutual Funds. Because when you do so, the decision of picking the right stock is vested with Professional Fund Managers who track the movement of shares closely and rebalance the investment portfolio regularly. They have a tab on the performance of companies, markets, political events, interest rates, and past data that help them to forecast the future of a stock. With Mutual Funds, there is a scheme for every person depending on your risk and investment goal. Say if you are a conservative investor but are willing to take a little bit of risk then, with Mutual funds you can always have your investments primarily in Bonds (Debt) with a little exposure to Stock (Equity).

Read More: Goal-Based Investing

As an investor one should remember that Equity Investing is no gamble. In a growing economy like India, good investments should outperform in the long run, irrespective of the macroeconomic factors. The Table below will give a clear idea:

 

Time Period 1 year 3 years 5 years
Amount Invested (INR) 12000 36000 60000
L&T India Value Fund Direct Plan Growth Option 10,948.02 37,485.68 76,658.66
ICICI Prudential Bluechip Fund Direct Plan Growth 11,596.35 40,193.66 75,470.58
SBI Bluechip Fund Direct Growth 11,322.36 37,843.27 72,645.74

These are the Top 3 Rated Funds on MyWay Wealth. The Table clearly shows that when Rs 1000 a month invested through SIP in these funds, say L&T India Value Fund Direct Plan Growth Option for a period of 1 year gives a fund value of Rs. 10,948 which is lesser than the invested amount of Rs. 12000. But when the same process is carried out for a process of 5 years, the fund value is Rs. 76,658.66, which is 27% more than the invested amount Rs. 60000. The same pattern is seen in the other two funds as well.

To sum it up, Equities may be volatile in the short run, but over the longer period, volatility will decrease and the returns will increase, thus reducing the risk.

So, Remember!

The thumb rule in Equity is to stay patient and remain invested for a long period to reap its benefits.

Term Insurance for Women

Term Insurance

“Someone is sitting in the shade today because someone planted a tree a long time ago.”

–Warren Buffett

 

This phrase is so true when we speak about our Mothers. Mothers play such a significant role in our lives. The lessons they teach structure our lives beautifully. A woman has so many responsibilities to fulfill at various stages of her life, be it the role of a daughter, a sister, a wife, a mother and if you’re a working woman, then you’re even the bread earner of the family. As women, we know every nook and corner of our house and understand the needs of every family member; their favorite food, their outing spot, the gadgets they like and even their financial needs. We always want to protect our families from every trouble.

But what if we are not around them? What happens when we cannot cater to their needs? What if we face an untimely death? Still, as mothers, we want our families to have a peaceful life after we have left them. For this, we need to prepare our families both mentally and financially. This arises the need for Women especially to have

“Term Insurance”

Term Insurance is the purest form of Life insurance, wherein you need to pay a fixed amount as a premium to a certain amount known as Sum Assured. And in case of your unfortunate death during the policy term, your family receives the amount.

Why should a working woman opt for Term Insurance?

  • The conventional thought is, Men are the bread earners of the family, even though women work. Let’s imagine your income stops for a while. Can anything substitute that income? No, right? So a women’s salary is also a major source of income for the family. Also, Term insurance is provided based on the total income of the family. Hence your salary matters.
  • Since you’re a working woman you would help your partner in taking care of the expenses of your family. A term cover is essential because, in the absence of your income, it would help your partner to handle the expenses all by himself. Let’s say, for example, School fees of the children, EMI, loan, rent etc.

Read More on: Worried about your Job? Mutual Funds can help!

 

What is the use of a term plan for a homemaker?

  • Even if you don’t make monetary contributions to your family, your absence would still leave a huge void in your family.
  • Your partner or your siblings would have to carry forward your responsibilities.
  • With the help of term insurance, your partner or siblings can cut down on their work hours or part-time jobs and dedicate their time in fulfilling your responsibilities. (Planning of your child’s marriage /education or taking care of your parent’s medical needs). They would receive a fixed amount of income, that would cater to their financial necessities and goals.

Read More on: Invest in Term Insurance to Save for your Child’s Education

Women receive certain special benefits with term insurance such as:

  • Special premium rates especially for women.
  • If you don’t smoke, then you receive attractive premium rate benefits.
  • Comprehensive protection with the option to choose Critical illnesses rider and other added riders as well with your term plan

How do I get Term Insurance done?

Working women normally have a busy schedule, an easier way to handle finances would be to use digital platforms. MyWay Wealth – India’s most trusted app for Direct Mutual Funds, is one such digital platform that offers Term Insurance.

The app has a user-friendly interface, completely paperless process and charges no fees or commission. 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.

Term Insurance cover

You may delay but life will not, and lost time is never found again.

Hence plan your Term Insurance on MyWay Wealth app today and be rest assured regarding your families well-being. You have worked hard all your life, now make it work for you. “Let your presence be felt always”.

Are you worrying about your Job Loss? Here is what you can do!

The thought of losing a job is very scary, isn’t it? With the evolving technologies around and automation happening in every industry, it is but natural to be worried. Any of us can lose our job at any time and the worst part is we can’t do anything about it.

What you usually do to get out of this fear is you start talking to your peers, your friends, spending more time with your loved ones or you may watch a motivational movie etc which can motivate you. Each of them will motivate you but you would end up getting the perfect answer for what if I lose my job?
So here are some best ways to prepare for and tackle the job-loss situation:

Create your emergency fund:

Build your emergency fund out of your income. Transfer around 30% of your saving income into Liquid funds or ultra-short-term funds where risk is minimal, and your money will start growing on a daily basis. An ideal emergency fund should be equal to six months’ future expenses or if you are having any EMI’s going on, it should at least equal future six months EMI.
Another option would be to reduce the EMI amount & increase the tenure of the loan temporarily till the time things get normal. This is not at all beneficial for you in the long term so better have an emergency fund in place.

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Cheat sheet to utilizing your bonus in the best way possible

It is that blessed time of the year when your salary account gets credited with a bit more than usual. But do you remember how long that feeling lasts? Probably you will feast yourself with a vacation or buy yourself a nice gadget. However, remember within a very short period of frivolous spending your extra income disappears. During this entire process, seldom is we think about ‘investing’. I will discuss a few pointers on how smartly you can use this money to make it work better for you:

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