Monthly Archives: December 2016

Practical Wealth Creation Plans with Equity Investments You Need to Know

Everyone aspires to live a peaceful life after retirement, but most people struggle to create enough pool of wealth that they can utilize to enjoy their retired life without depending on anyone. So what is the best way then? Well, several financial experts suggest different ideas for creating wealth. However, one of the most tried and tested and reliable ways is to invest in equities. To be able to earn valuable returns through your investment, you need to develop new investment strategies constantly, execute the ideas perfectly, keep researching the market, stay abreast with the latest happenings and do a lot of other things, which are discussed below:

Set yourself a practical financial goal

One of the key aspects of wealth creation plans is being meticulous. Based on your risk taking abilities and your financial goals, you need to chalk out a plan on how you are going to accomplish it. First and foremost you need to analyze your current and future financial standing as well as clearly define your needs. Based on the amount of money you can spare to invest, you need to decide where to spend your hard-earned money so that you can get maximum returns. You also need to decide the time-period that you want to stay invested in and your growth potentials. It is no secret that equity investment has changed people’s life, there are several cases where people have earned a fortune, and there are also those who have lost everything.

Research, research, research

One of the key aspects of being successful in the investment market is proper research; it is your strongest weapon. Several people say that investing in equities is like gambling, however, this is not true. With thorough research about every equity you are investing in, you would exactly know, which equity would provide you quick growth. It is pivotal that you look at the past performance of the equities, this would help you know if the equity has performed consistently and it would also give you a fair idea about how it would perform in the near future. Don’t just invest your money but also spend your time in researching about the companies.

Create a good portfolio

Once you have researched and identified the potentially high value equities, the next step is to invest in right quantities. Avoid investing too much in a single stock, it is best advised to scatter your investments. You need not have to essentially invest in 40 or 50 stocks, just invest in four or five best stocks. Bigger portfolios are hard to manage as well as it is practically impossible to keep a tab on each and every stock. However, there are studies that suggest investing in 20 to 25 stocks is ideal because it keeps the risk constant.

Think long term

Financial gurus from around the world have corroborated that the best way to get maximum benefit from equity investments is to stay invested for a longer period. Whilst is important to buy the right stock, it is equally important to hold them through different market cycles. The key to success in equity investment is not just picking the potentially valuable stock but also be patient over a period to see your money grow.

Reconstruction

It may happen that your risk taking capability would change due to change in financial status; you may face an unforeseen emergency situation or you may earn a large amount of money while you are still invested. In such circumstances, it is vital that you reconstruct your portfolio to your benefit; you can choose to invest more in the stocks that have been performing well in the past or you may want to withdraw from a few stocks that have not yield good returns.

This A Plan to Make Your Future Financially Secure

Pharma stocks are among the market darlings since a long time and have reached higher sharply in the last few months. Although the pharma funds may delay returns in the short run due to various compliance requirements, in the long run, they are a big shot. As of now with the growing mutual fund industry, the pharma mutual funds are considered to be one of the best-performing sector funds. Among them, the SBI Pharma Fund is the outperformer which has secured the best position in the market. With a NAV amounting to Rs.136.393 as on April 10, 2017, the fund has gained superior possession.

In the long run, every investor desires to invest in a fund that can multiply the income manifolds to provide a huge capital appreciation. On the flip side, the fund managers also get the chance to make the best bet of the invested capital while taking significant risk factors. The SBI Pharma Fund also aims to deliver the highest possible returns to the investors by allocating the funds in the most promising companies across the pharmaceutical sector. The fund is an outperformer in its category with excessive returns.

Investing in pharma sector is one of the best ways of making high growth on capital. The reason being is that this sector has high-growth potential. With a large size of the population in the country, the requirements of pharmacy are greater which make this industry high demanding. SBI Pharma Fund’s review has evaluated that the fund has major investments in the best companies which involve Sun Pharma, Strides Shasun, Aurobindo Pharm, Cipla, and Lupin. These entities have the potential of providing the expected returns on the investments.

SBI Pharma Fund Growth: A Brief Analysis

The primary objective of the scheme is to provide the investors with maximum growth opportunities through equity investments in stocks of growth-oriented sectors of the economy. There are five sub-funds dedicated to specific investment themes, viz., Information Technology, Pharmaceuticals, FMCG, Contrarian, and Emerging Businesses. These all endeavour to generate high-yielding returns on the investments in the long run.

The gains offered by the scheme in the past have been tremendous. The absolute annual returns of the scheme have reached up to 56.3 percent in the year 2014. The annualised returns on the scheme for its three- and five-year investments are 19.3 and 23.4 percent respectively, which are further noteworthy as compared to its peers.

SBI Pharma Growth Fund has the entire investment in the pharmaceutical or the healthcare industry. 97.01% of the total assets of Rs.1,037 crore as on March 31, 2017, is being put in the equity stocks and securities. The remaining assets are parked in the debt instruments in order to provide regular income and diversification.

Different Types of Home Loan Everyone Should Know

In India, applying for home loan is the most common and convenient way to buy a dream home. Research suggests that, over the past few years, with the growing number of financial institutions offering housing finances, the number of people applying for loan have increased manifold. The various benefits attached with getting a housing finance like tax cuts and banks offering different kinds of loans to suit different needs of the borrowers have only made housing finance more feasible for home buyers. For most of the people tax benefit is the biggest benefit from availing a home loan. The banks nowadays offer different kinds of loans or even customized loans that suit the needs of the borrowers. Such benefits have only made housing finance more feasible for home buyers. Below listed are a few of types of home loans available in the market:

Home purchase

This is the most common type of home loan prevalent in India and the most easily accessible variant. There are plenty of banks as well as private financial organizations that offer loan for home purchase at attractive interest rates. The key to avail the best deal is to make a thorough comparison of the quotes and choose the one that is most cost effective rather than just going with the bank that offers the lowest interest rate.

Land Purchase

Land purchase loan, as the name itself suggests, is availed for buying a piece of land on which you wish to build your real estate property. This loan can be obtained for building home for self-occupation or commercial use. Typically, most financial institutions in India offer loans up to 85% of the value of the land. This type of loan can prove beneficial for people who dream of building their house as per their needs rather than buying a ready-made apartment from a builder.

Home extension loan

At some point in life, everyone needs to upgrade their current home and make certain modifications, be it the addition of a new bedroom or extending the balcony. If you want to make any alterations to the existing structure of your home, you can avail home extension loan to fund the construction work. Before you apply for the loan, you first need to have a copy of permission letter from the concerned civic authorities sanctioning the structural modifications.

Home improvement loan

This type of loan is very similar to home extension loan, in the sense that you can avail funds under the scheme to carry out home improvement works like painting the exterior, undertake roof repair works, or refurbish the electrical and plumbing fittings in the home. Typically, this type of loan is availed by people who wish to increase the commercial value of their property so that they can demand a higher price for the same while selling it.

NRI loans

This home loan type as the name suggests is exclusively for non-residential Indians (people who are Indian citizens by birth but have settled or live abroad) who wish to invest in buying a property in India. Several banks in India offer lucrative home loan schemes for the NRIs at the most competitive interest rates and affordable repayment schedules.

Bridge Loan

This type of home is for people who want to sell their existing house and purchase a new home. A bridge loan is a financial arrangement with the lender that helps you get the required funds to pay for your new home until you find a buyer for your old house.

Stamp duty loan

When you buy any kind of real estate property, you are mandated to pay a stamp duty, which is usually about 1% to 2% of the property value. If you are unable to pay the amount, you can avail the stamp duty loan, which is specifically offered by banks for this purpose.

Things You Should know before investing in Mutual funds

Mutual funds are a means of investing money in a variety of assets such as gold, government bonds, equities and other securities. Mutual funds help you to diversify your investments and reduce investment risk as they invest in a broad range of securities. You can generate regular income from the funds or use it as a means to grow money in the long term. You can invest fixed amount of money regularly in mutual funds as per your financial plans and thus build wealth in the long term..

ICICI Pru MF offers different types of mutual funds. You can identify the right fund as per your needs and also compare the performances of funds before investing. The different types of funds include the following:

Equity fund

Equity funds provide potential for high growth and returns by investing in shares or equities. They are best suited for investors looking for long term investment horizon. They can be actively and passively managed. Equity funds are considered a high risk option as they are subject to market volatility however they can also generate big returns if you choose the right shares to invest in..

Debt funds

This fund mainly invests in bonds and other debt instruments. They are best for investors looking to optimize current income assuming low to moderate levels of risk. They are suitable for medium to long term investors.

Exchange traded funds

These funds are instruments that track an index, commodity or a basket of assets closely and trade like shares on an exchange. Exchange traded funds invests in stocks of companies, precious metal or currencies and are backed by physical holdings of a commodity. They give the flexibility to buy or sell units all through the day. They generate lower returns than equity funds.

Balanced funds

Balanced funds bridge the gap between the high risk equity and the low risk debt schemes. They are made up of a mix of equity stocks and bonds. They are best suited for investors looking for debt plus returns with a higher level of risk. These funds are a great place to start you investments in mutual funds.