3 Investment trends you must avoid!

Do you ever wonder how some people invest in just the right things? And that their investment decision never yield bad results? This may be a bit too far-fetched because every investor makes some mistakes and learns from it. But the best way to be a good investor is to learn from other people’s experiences and make the most out of their advice. Life is after all too short to learn from your own mistakes!

Below are the three investment trends you should avoid if you are investing for profit and growth:

Investing in Brand Names:

Most of the investors are generally involved in making this mistake. The dazzling image of the company leads people to believe that the stocks are more profitable. But this is just a false front and many brands are in deep trouble underneath the surface. If it is long term security than the brands are a good place to invest because they well-established with large capitals but they are not a very smart investment opportunity in terms of profit and growth.

These stocks are less risky, so they should occupy a small portion of your overall collection. With overvalued stocks, there lie little growth opportunities and hence, avoiding large investments is the key if you are investing for profit and growth.

Investing in Penny Stocks:

Penny Stocks have little capitals invested in them and hence, they fetch little profit and their trade price is also low. These stocks are risky for investment because they are controlled by sizable traders. Penny stocks are terrible options to both, invest or trade. The reason for the growing investment in penny stocks is because of the thinking that bulky investment can be made at cheaper cost with high selling price to yield maximum profit. The investors based on this knowledge make large investments that prove to be fruitless most of the times. Because of the lack of right management, this is an investment you should avoid under all circumstances.

Overlooking Stock Value because of Price:

This is the most common problem with investors who are new to the market. Quite often these investors gamble in stocks with luring prices but there’s no actual market value to the stocks at close inspection. Without proper market analysis, the stocks look like a successful investment plan with a high yield promise. But behind the entire glamor, these stocks are quite unstable and are not a very good investment opportunity. You should properly evaluate the background of the company and try to know the actual stock value instead of going for the deceitful price.

What are the Techniques to trade Right Stocks at Right Time?


Picture Source: Pixabay

Today, the surge in stock prices has made the trade market flourish with amazing results. With the rising and falling prices of stock in an instance, the stock trade market has made it crucial for all traders to be vigilant with each trade. Timing, along with the market knowledge of the stocks, is the most important aspect in stock trade. Thus, in order to be successful in trading stocks, it is imperative that you know which stocks to trade and at what time. Timely decision making is important when it comes to stock trading.

Selecting the right stocks for the trade can be difficult, especially if you’re new to the market. Stock selection does not depend on the popularity of a company or a brand name. The market variables change every day and to make the best out of your trade, you need to do a thorough analysis of the market. This can be challenging, but in order to make the right decision, you need to select the right time to start your trade. The best time to start off is early in the morning. Stock trading is similar to entering a battle and remember, nobody enters a battle unprepared! So, start preparing early and do a thorough analysis of the stock market in the morning.

Let us have a look at some techniques that will help you make the right decision:

Pre-Market analysis is Important:

In your pre-market analysis, look for stocks with value worth what you’re willing to spend. Volume is important, so look for stocks that are heavy in volume. Filter out stocks that trade thinly by checking the average volume for 30 days. Check the analysis for future market value of the stocks for picking the best ones out the list.

Dig Deeper into The Right Market:

Now, with your best selected stocks, do a clean trade off with high volume stocks and set your minimum value of the volume you want to trade, like 50,000 shares per 5-minute bar. This is what most of the traders will have their eyes on! You can also look for other loop holes or opportunities in the market that other traders don’t see by doing a much thorough analysis.

Define the Sectors and Domains:

Define your own sectors or domains you have a much deeper knowledge in, which can help you picking the right stocks. You can also use your previous experience in setting new boundaries or in enhancing your trading skills. The best way to improve your dealings is to focus on a single or at most 2 stocks for trade. Select them on the basis of popularity and or your previous experience.

Follow these simple guidelines to venture into the world of stock trade with ease.

Disclaimer: Please do not make any financial decision solely on the basis of information provided above. The views and ideas expressed in this article are solely of author and do not necessarily reflect ideas in general.


Savings: What’s your perspective?

coins-1523383(Image source: Pixabay)

Recently, A young enthusiast asked me about the importance of saving. His parents asked him to start saving but he (like most of us during youth) want to enjoy present life and didn’t want to give up on any comforts for the sake of future. Well, to some extent both (in their shoes) are right. Savings is essential but it does not mean that you should sacrifice on each and every thing, otherwise money will become definition of your life. It also does not imply that you start enjoying present without giving thought to future.

There are negative effects to both sides: Savers often end up with ‘regrets’ and spenders with ‘financial problems’ in future. What is required is equilibrium which can be answered by How, When & Where to save.

Let’s take a look –


Does more earning mean more savings? That does not make sense always. Have you ever noticed why some people are very good at saving and others find it difficult to save?  It depends upon personal money handling habits. To an extent saving habits depends on your brought-up, cultural factors. However, psychology decides the way you look at money. There are savers and spenders. Spenders love to spend money on current to enjoy life rather than saving it for future. They find their happiness in buying and comfort. Savers on the other hand – don’t enjoy losing money and gets excited when they see their savings grow.

If you are a spender then try to make your transactions in cash or debit card. Keep credit cards usage limited. A few changes like cutting on trips to grocery stores, unnecessary entertainment, Budgeting for expenses, keeping fixed cost low can help a lot in saving money.


Saving at right time is very important. Moving a fixed part of your salary as saving on regular basis can help you save better and automatically put limits on your spending. If we go by thumb rule then 25% of your salary should go to savings but not less than 15%. These days it is often known as ‘Pay to yourself first’. This small step can save and accumulate large sum over long term (compounding).


Saving in right instruments and doing the right purchases could help you save more. Buying in bulk/wholesale for nonperishable products will give you happiness of buying right and saving money. However, there are certain areas where saving money should not be given importance e.g. cheap products for health, food. This will often end up with high expenses towards health and Doctor visits. Health is wealth and therefore where to save is important to understand.

Don’t make savings “goal” of your life but accept it as a part of lifestyle so that it will not be stressful.

Happy Savings!



Investing for Child’s future

Investing for your Child’s Future

Saving and planning investments for your child is one of the foremost item in every parent’s life. Kids are one of the priorities for every parent and to safeguard their future. With increase in education costs and inflation, it’s becoming eminent to start savings for kid’s higher education / marriage at the earliest. If we take into consideration the current educational situation then it is not only accumulating funds for college but also comes with additional costs like Tuition/coaching fees, year round study supplies, project works etc. Education is going to be very costly affair and it is better to start preparing now.

Planning & investing for your child’s future will vary as it’s mostly depends on the child’s age. If a child is 4-5 years old then parents will have more time in their hand to accumulate money but if child is approaching higher studies i.e. 12-14 years old then they don’t luxury of time. With this ‘time’ variation, options of investments will also change.

Following are some of the good options available for investing for child:

Mutual Fund SIP: 

This is an excellent option to accumulate money over the long term for your child’s education/marriage purpose. Investing in mutual fund through SIP way can help you to reach the required corpus. Only important factor is ‘Time’ rather than amount of investment because effect of compounding comes from investing time horizon. Sooner you start bigger will be the corpus.  A simple SIP of INR 5000. each month with a good equity fund can give you around INR 25 lacs in 15 years, assuming 12% annualized returns.  Increasing amount of SIP every year could also benefit you with more sum at the end of tenure.

Recurring Deposit: 

This is another option available for long term purpose. Same like SIP you can start with small amount. The returns are not high as compared to mutual fund SIP but it’s a safe investment and returns are fixed.

Public Provident Fund (PPF): 

This is one of my favorite option. It comes with triple benefits of compounding, tax exempt and decent sum at end of tenure. PPF is also safe option as returns are guaranteed. It also gives flexibility in investment.

Sukanya Samriddhi Scheme:

This is one of the good initiative taken by our Honorable Prime Minister Shri. Modiji for better and secure future of girl children in India. Under this scheme, any legal guardian or parents can open the account at the time of birth of child till she attains age of ten years. This scheme gaining popularity as it offers high interest rate and it’s a EEE(EEE means tax exemption on investment (80 c), exemption on interest received and exemption on maturity amount ) product like PPF.

Gold ETFs: 

Gold ETF’s or e-gold is also a good option of investing for child’s future. It is risk free as it’s not in physical form and gives good returns. Gold investment is more for hedging purpose therefore do not invest all your money only in gold.

Term Insurance:  

Taking a pure term insurance is always recommended. In case of an any unfortunate event all this planning could get wrong and therefore insurance plan can safeguard this crisis.  But this does not mean to buy ULIP plans or any child insurance plan. Combination of term insurance and SIP, will give more returns and security than other expensive plans.

Fixed Deposits: 

Fixed deposit is one of the safest investment tool. Though it does not offer tax benefits like PPF but it offers safety and fixed returns. Do search and compare between different FDs before investing. ( )

 Choose from the above suggested options which is/are best suitable to your own needs, risk capacity and time frame. Invest early so that your child can get good benefits in future. Do teach your child about money and importance of savings which will help him realize the value of money. ( )   

I hope this information will help you make the right decision. Happy Investing!


NRIs in USA/Canada can invest in Indian mutual funds


Good News for USA/Canada based NRIs….!  NRIs based in USA and Canada can invests in mutual funds in India now.

Due to FATCA(Foreign Account Tax Compliance Act) and  due to stringent rules in the USA, most of the fund houses in India were not accepting applications. But now India signed the Inter-Governmental Agreement (IGA) with USA to improve international tax compliance.

List of fund houses that currently accepting investments from NRIs based in US and Canada

  1. -Birla Sun Life Mutual Fund
  2. -SBI Mutual Fund
  3. -UTI Mutual Fund
  4. -ICICI Prudential Mutual Fund
  5. -DHFL Pramerica Mutual Fund
  6. -L&T Mutual Fund
  7. -PPFAS Mutual Fund
  8. -Sundaram Mutual Fund

Some Important points:

  • Documentation required and process for investments is same for all the investors. KYC, Additional KYC & FATCA details are compulsory for all mutual fund investors.
  • For offline investments for NRIs, some fund houses may ask for additional declaration signed by client.
  • L & T mutual fund house does not allow USA/Canada NRIs to invest in closed ended funds.


 Source: Economic Times

How to setup Financial Goals!


Whenever an Investor ask me on How to start investing, the first question I ask – what are your investment objectives? Almost 80% of them don’t know the “right” answer OR they just say – earn more money.

Investing without any goal is like travelling without destination. Also if you do not have any specific goals in mind you cannot choose a right product for investment. So the main thing before starting any investment is to decide your goals.

How to decide goals?

Financial goals are simply those things which you want to achieve or dream about. These goals will be different for different investors like buying a new home, retirement or daughter’s wedding. Goals should be realistic, clear, and measurable and should have a time frame.

But remember earning more money or become rich is not a goal. Robert Kiyosaki rightly said, “Money is not a goal. Money has no value. The value comes from the dreams money helps achieve.” Your goal should be based on making your life and future financially secure and money is a tool which helps you achieve it.

There can be more than two or three goals and each goal should have specific time period, importance and its own cost. Decide and write down these details on a piece of paper.

Prioritizing your goals:

Prioritize your goals on the basis of importance and time. Some goals need longer time e.g. retirement, while others are important to be achieved in next 3-5 years.

Divide your goals in three main categories:

  • Short Term Goals (1 years)
  • Medium Term Goals (3-5 years)
  • Long Term Goals (more than 5 years)

 Plan to achieve your goals:

 Planning to achieve goals is a process and it should include:

  • After prioritizing, decide how much money you need to save to reach your goals based on available time frame. Write it down.
  • Before starting savings do checklist of available assets, cash/savings already with you.
  • Budget your expenses. It will help you figure out how much you can save. Change your spending habits. Saving money depends mostly on your spending habits.
  • Clear your credit card debts, try to reduce the use. The interest on credit card is one of major thing which lowers down your savings.
  • Identify your risk tolerance level. Do not stretch yourself beyond your limit.
  • Above steps will give you clear idea about what investment products you should choose. And therefore, select the investment products which is best suitable to your own goals, risk ability and duration.

Keep monitoring your goals. Adjust the savings, time whenever and wherever needed. Download some good financial apps or register with some financial websites to keep a check on it.

Good luck and Happy Investing!


Mutual Fund SIP: Things to know before investing.

Mutual Funds Systematic Investment Plan (SIP) is a great way to start investment in mutual funds. It offers you to invest a fixed/pre-determined sum of money on a regular basis (monthly, quarterly) in mutual fund schemes. Some features of SIP like Rupee cost averaging, regular savings, compounding returns makes it a very attractive option of investment.

However, there are certain things which every investor should know and understand before taking the first step. Below is my attempt to cover some of important points to make that decision.

Goal Based Investing:

Investing without goal is like a construction without base. Do not invest your money on anyone else’s recommendations or only because your friend/colleague is investing. Invest with specific goals or objectives in mind. Setting up goals can help you make a proper plan with all the details like time horizon, amount required to invest, risk capacity etc. It will also help you in choosing suitable scheme.

When it comes to selecting the scheme, many investors often get confused and end up investing in the scheme which is recommended or listed with tags like “best Performing, Star rated Fund, proven past records” etc. Investors should understand that these are not the ONLY criteria’s for selecting a right scheme. Also, it’s not about “best scheme” to invest but it’s about selecting a scheme which is best suitable to your goals, risk capacity, duration and other needs.

SIP is not an investment strategy:

SIP is a way that helps you save regularly and accrue money to reach your investment goal. It is not a strategy to gain high returns.

SIP works best for long term:

SIP is recommended generally for long term as compounding works better when duration of investment is longer. However, that doesn’t mean that you should be invested for “long duration”. Monitoring your funds, its performances and making necessary changes when required is also very important.

SIP is not a way to reduce market risk and loss:

As mentioned earlier SIP is a way to invest in mutual funds i.e. indirect investment in stock market. Therefore, the risk of market volatility is inherent and chances of loss is also inevitable. But when you investing through SIP, you are lowering the risk of your investment over a period of time.

SIP is not always suitable for all types of mutual funds:

Mutual funds investment is subject to market risk and hence investing for long term in equity market is always good. Doing SIP in equity funds is better due to market volatility but it is not always beneficial with Debt funds for short duration.


SIP in Equity Linked Savings Schemes (Tax-saving Scheme) gets little confusing due to its lock-in period. Income Tax regulations states that if you want tax exemptions, you should be invested in ELSS schemes for at-least 3 years and the amount should remain invested for a minimum period without any withdrawals.

Therefore, when you invest in ELSS through SIP mode your each installment is treated as fresh investment and hence gets locked for 3 years.

Remember, your mutual fund portfolio should not consist of only SIPs but some lump sum investments too. Like I said before SIP is always not suitable to all types of mutual funds and for every goal.

Hope my points will help you make the right decision. Happy investing!

Gold Monetisation Scheme


Gold Monetization Scheme is the scheme which lets you earn interest from your idle gold (in any form) without selling it. This scheme addresses the physical gold held by households and institutions of the country. Under this scheme, customers can deposit gold in any physical form (like, coins, jewelry or bars) in the bank and can earn interest based on weight or as per value appreciation.



What are the Objectives of this Scheme?

India is one of the largest importer of the gold with almost no indigenous supply. This scheme will help Indian Government to use the gold for more productive purposes and to reduce reliance on the import of gold.

How to open an account in bank?

The scheme is pretty much similar to fixed deposits where customers can deposit their physical gold and earn interest. The minimum deposit shall be equivalent to 30 grams as per RBI norms. There is no maximum limit under the scheme. The purity of this gold have to be testified by (CPTC) Collection and Purity Testing Centers. These centers assess purity of the gold and certify along with gold content. When a customer provide this certificate, Bank will open a ‘Gold Saving Account’ and will credit the quantity of gold. Separately, CPTC will also inform bank about the value to be credited in the customer account.

Once this is done, bank will send gold to refineries for melting or storage or sell it to the other designated banks participating in the scheme. At the time of maturity, depositor will receive either gold or equivalent rupees, based on the option he choose at the time of opening an account. This option cannot be changed later.

The scheme come in three different tenures:

  • Short Term (1-3 years)
  • Medium Term (5-7 years)
  • Long term (12-15 years)

What are the benefits of this Scheme?

  • Customer can earn interest on their idle gold. Even broken ornaments/jewelry can give a chance to earn interest under the scheme.
  • Appreciation in the value of gold can also benefit customer with the interest earning.
  • The gold deposited by customer under the scheme, will be safe with the bank.
  • All the earnings are exempted from capital gain tax, wealth tax and income tax.

A few important points:

  • As per RBI, designated banks are free to decide the interest rates on these deposits.
  • Depositors can do premature withdrawals subject to minimum lock-in period (for medium term 3 years lock in and for long term 5 years lock-in) and penalty amount will be decided by the bank. This will also subject to reduction in interest payable.
  • Customer/depositors can open this account in joint names including the nomination service.
  • Resident Indians, HUF’s, Mutual Fund companies or ETF’s registered under SEBI can make deposits under this scheme.
  • Last but not least, customers who want to invest their physical gold through this scheme should take a note that if you are depositing gold jewelry or ornaments then it will be melted and checked for purity by testing centers. Therefore, at the end of term/maturity, you will get back only gold bars and not original piece of jewelry.



Meet the new age Currency – Bitcoin !

1455564901042 Bitcoin is the currency of new age. It’s an electronic payment system through which one can create and held the currency digitally. It is not paper like dollar or rupee but it’s a digital currency.

In simple words, it’s a virtual form of currency and used for electronic transfer and purchases.

What makes it interesting and different is that it is completely decentralized and no authority or bank owns it.

Bitcoin was invented by Satoshi Nakamoto, a software developer who wants to create a currency independent of any controlling authority and transferable electronically with low transaction cost.

How does Bitcoin actually works?

One can easily start with bitcoins with some basic knowledge and related terms (please refer to the bottom section of this article). One needs to install Bitcoin wallet on a computer or phone. It’s a mobile app or computer program which provides a personal wallet and allows users to send or receive bitcoins. When one installs it on mobile or computer it generates an address for bitcoins transactions. Bitcoin address is nothing but similar to an email and each address should be used only for one transaction as this address will get public to whole network once transaction made by the user.

There are 3 ways through which you can earn bitcoins –

  1. Accepting payments in the form of bitcoins, if you are offering any product or service.
  2. Buying and selling of bitcoins through online Bitcoin exchanges.
  3. Through competitive Mining.

Let’s see it with an example: Savita wants to send some bitcoins to Smita. Savita will open her wallet and copy the address of Smita, add amount and sends it to her. Now the wallet will sign the transaction with Savita’s ‘Private Key’. This transaction get broadcast to the network and then will be verified by miners. When Smita gets the bitcoins and confirms; the process will end.


How bitcoins price is determined?

It is determined by supply and demand factors of the market for bitcoins. Just like all other currencies bitcoins price also fluctuates. There is actually no fixed price for bitcoins but it is about both parties who need to agree on the price.

There are limited number of bitcoins (21 million) to transact and creation of new bitcoins are at very low rate. (Production rate is decided every 4 years).

Bitcoins in India

People are getting to know about bitcoins in India. Bangalore is leading in accepting and learning about bitcoins.

Earlier RBI wasn’t in much support of bitcoins but now it allows to operate with cautious warning about misuse of crypto-currency. Bitcoin is still an unregulated industry in India but it is expected to get it done soon in near future. Currently there are some Bitcoin exchanges which are successfully operating like Unocoin, Coinsecure and BTCXIndia.

Understand common terms in Bitcoin

Bitcoin/bitcoins: With ‘b’ capitalized refers to the entire system or network and without capitalization it is used as units or currency.

Wallet: Bitcoin wallet is like virtual bank account to send and receive bitcoins. It’s like a physical wallet to store bitcoins. It also holds your private key which is linked with your Bitcoin address.

Address: It is used to send and receive the bitcoins transactions on the network. Address is also known as public key which is use as a scan able QR code and use by user for digitally signed transactions.

Private Key: It is secret number that allows bitcoins to send. Each Bitcoin wallet contains one or more private keys and they are saved in wallet. It is important to keep this key secret and secure because it enables to spend the bitcoins.

Block: It is a record in the block chain. It is like file or page of the public ledger (block chain) which cannot be altered or removed once written.

Block Chain: It is public record (public ledger ) of Bitcoin transactions in chronical order.

Mining: It is a process used to generate new bitcoins by solving cryptographic problems using computer hardware.

Time to go grab some bitcoins! See you next time.


  • Investopedia
  • Coindesk

Fixed Deposit Schemes: How to get most out of it?

Today I am going to talk a little bit about Fixed Deposit Schemes.

Fixed Deposit (FD) Scheme is an easy and a great option for risk averse investors. Most retirees prefer to park their funds in FD to generate regular income. The income from FD does not beat the inflation but safety of principal and assured returns makes it attractive for investors who wants to seek regular income.

Let’s see how we can maximize the returns and get most out of FD –

Fixed Deposit Laddering:

This strategy can be used to get most liquidity and lower risk of interest rate volatility. Let’s understand it better with an example:

Mr. A, is a retiree and wants to make a FD of INR 3 lakhs for 3 years. If he goes with typical usual method of 3 year single FD then he will simply put the money in it and will enjoy the income at the given rate. But what if after 2 years, bank raise interest rate? Mr. A is still getting less interest rate than the current rate. Or say after 3 years interest rate goes down? He have to invest his money at the low rate without any option.

Now, there is a better way – which can help Mr. A in this case and it is called as ‘Laddering’. Fixed Deposit laddering consists of creating an investment ladder, step by step and spreading the investment amount across multiple maturity periods but at equal duration.

Let’s go back to the same example.

With laddering, Mr. A can break the amount of INR 3 lakhs into 3 equal parts of 1 lakh each rather than investing the entire amount for entire 3 years. He will invest 1 lakh for 1 year deposit, next 1 lakh for 2 year deposit and last 1 lakh for 3 year deposit to make a ladder, such as it will be like 3 FDs with 3 different time durations. Further, he can re-invest the one year deposit when it gets mature in another 3 year deposit to create next step of ladder or if his 2 year deposits gets mature he can re-invest in another 3 year FD to get income in the fifth year; so on and so forth.

How much tenure works for the ladder depends on the investor’s liquidity needs and consideration of post-tax returns. Fixed Deposits with low tenure (e.g. quarterly) may have high liquidity but post tax returns will be low. This strategy gives you a couple of benefits like –


If any investor holding Fixed Deposit breaks it before maturity he need to pay penalty and also loses the interest amount. But with this strategy FDs with different maturity periods gives the facility of liquidity and without any penalty, Smart?

Easy Access to your Funds:

By laddering you always have some money maturing at equal duration. That way you can invest the amount in other options if you want or can re-invest in FD with high rate (if offering) to make next step of ladder. You can choose the maturity period for laddering like quarterly, half yearly as per your choice.

Guaranteed Regular Returns:

Laddering can give the benefit of regular and steady returns. This strategy is not for earning high interest rate but to get returns regularly and to minimize interest rate risk.

FD laddering is not a strategy to generate high income but to get maximum advantage of FD. It also has some drawbacks e.g. it will not give you a high interest in the scenario of rising interest rates.

Now, if you find laddering confusing or complicated, there is another strategy you can use. You can simply divide your amount in equal/unequal parts and make multiple FDs with different tenures. Remember the saying – “Don’t put all your eggs in one basket”!

Let’s see another example on how this will work.

Mr. B have INR 5 lakhs and wants to invest in Fixed Deposits. Now, instead of going with single FD, Mr. B has divided the amount in 3 parts (1 lakh, 2 lakh & 2 lakh) and parked it in 3 different FDs with different tenures (1 year, 3 year & 5 year). If he needs money after 1 year he can get it once his first FD is matured or in worst case he can liquidate any one of the FDs instead of breaking the whole and not losing the interest amount.

The last and simple strategy is to make Fixed Deposit for a longer duration, say 10 years when interest rate is at high. This way you will be able to lock your amount at high rate of interest for longer duration. This option will not give you liquidity but it could give you a high interest income.

I hope the above strategies help you get maximum benefit out of Fixed Deposits.

Happy Investing!