The Financial Concept That everyone should have knowledge by 30

Four of the most common words/phrases in #Finance are interlinked. You will find people from all walks of the Financial world - be it traders, brokers, investment analysts, wealth managers, insurance agents - talking about risk, return, risk-return tradefoff, and diversification.

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Basic definitions

Risk: 

Risk is negative. It is the potential loss that can occur when you undertake any initiative. It is the uncertainty in the expected outcome of your initiative. 

Risk is everywhere :

Your risk losing all your savings if the bank goes bankrupt, or if the price of your property suddenly plummets due to a bubble burst, or your startup fails costing you your entire capital and time invested till date.
Usually, instruments backed by governments (bonds, T-bills) or by large corporations (like stocks, savings accounts) are low on risk.
Risk is usually measure using Standard deviation of the portfolio return.

Bull market

A bull market refers to a market that is on the rise, which is a good thing. That means that prices of shares in the market are increasing. Usually a bull market also means the economy is in a good state, and the level of unemployment is low. The US is currently in a bull market .

Bear market

A bear market is the opposite of bull. In other words, the market is declining. Share prices are decreasing, the economy is in a downfall, and unemployment levels are rising.
It sounds like a bad thing (and it certainly isn't good), but Storjohann says the most important thing to keep in mind is that the market is a "rollercoaster," meaning it's bound to go up and down and people shouldn't panic every time the market looks a little ursine. "Millennials have time on their side," she explains, "and over time money has the ability to grow."

Return: 

Return is positive. It is the reward you get for your efforts.
It can be the interest you earn from your deposits in a savings account, the dividend from a stock, the capital gain from selling a property at a price higher than you purchased it for.
Risk-return trade-off: The relationship between risk and return is a fairly simple direct relationship. 

The higher the return desired, the higher should be the risk appetite. If there was an option where the risk was low for a high-return investment opportunity, everyone would flock to it, thus driving up its demand and lowering the return. 

Basically, "no pain, no gain".

Diversification: 

Diversification is the finance way of saying "Do not put all your eggs in the same basket".

If you invest in a single financial instrument (security, stock, bond, derivative), you risk losing all your investment. However, with judicious selection of different investment vehicles and allocating your funds in an optimal manner, you can maximize your returns without increasing your risk or exposure.

Portfolio: 

A portfolio is nothing but a collection of your various investments.

Will home loans be the next big worry for banks?

Home loan growth is likely to be lower than the previous years as buyers and investors will defer their home purchase on expected correction in real estate prices. Following demonetization, the growth in home loans in FY 2017 is likely to be lower at 16-18% from earlier expectations of 18-20%, as stated by a rating company. Demand from the self-employed segment is also likely to be subdued, as their business volumes may have affected. Reduction in MCLR by various banks could lead to increased competition and balance transfers, especially in the prime salaried segment, a report said. 

In the Union Budget, the government has given 39% higher allocations under the Pradhan Mantri Awas Yojana along with infrastructure status accorded to affordable housing projects will stimulate wider investor community and improve the access to funding avenues. While growth in the prime home loan segment could witness moderation, affordable housing segment is likely to grow at a faster pace than industry with efforts, made to address the supply, demand and affordability issues. Asset quality indicators continue to remain resilient with the Gross NPAs of 0.8% as on September 30, 2016. Post demonetization, the delinquencies in the affordable housing and self-employed segments would increase given the borrowers’ reliance on cash transactions. Given the expected correction in property prices liquidity of properties may hamper, affecting the loss given default. Despite rising portfolio vulnerability owing to increasing share of non-housing loans, higher share of self-employed and low-income borrowers within housing loan segment and high competitive intensity leading to dilution in lending norms (like relaxation of LTVs/FOIRs), a gross NPAs for HFCs to remain range bound between 0.9% - 1.3% over the medium term. Incremental funding costs for HFCs have come down considerably in the second half of FY2017 with many HFCs raising funds at median rates of 7.5-8%. Therefore, cost of funds is likely to moderate further for HFCs. The reported capital adequacy for HFCs remained comfortable, due to the benefit from relatively lower risk.

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Get Finance To Fuel Your Business - Business Loan

Money is the fundamental part of business life. Some people in India love to work in companies and earn money. However, some of them believe in establishing own business and earn profits. Loan taken in order to set up/enhance/improve the business of the company is known as the commercial loans. It is also known as the business loans. 

Type of People Availing Commercial/Business Loans:

Many small and big business houses are being set up in India. Setting up of small/big business houses is not an easy task. It requires lot of financial assistance and lot of challenges comes along with it. Getting funds is the major task for the establishment of the company. It is taken up by set of people given below as follows like:

• Small time entrepreneur

• Service Provider

• Manufacturer

• Big time entrepreneurs

• Self Employed Professional

• Small time businessmen

• Big time businessmen

Eligibility Criterion For Taking Business/Commercial Loans In India

• Banks and financial institutions in India are offering commercial/business loans. Some of the eligibility criterions available for taking up the business/commercial loans in India are given below as follows:

• You must be in the line of business for at-least 2/3 years with valid certificates.

• Ownership document of property used for business purposes.

• Residence Proof document.

• Passport Size Photos

• Identify Proof like Pan Card, Passport, Aadhar Card and Driving Licence.

How Can One Apply For Business/Commercial Loans?

It is very simple. One needs to follow certain steps like:

• You must have good repayment capacity.

•  Vital documents must be available as per requirements.

• You must have database showing company’s performance.

• Statement of Profit/Loss is mandatory showing the loss and profit of the company.

• Income and expenditure statement showing the expense and income of the company.

• Robust business plan must be in place like equipment, employees, assets, marketing strategy as well.

• Good credit score must be present.

• If you start a new company, concentrate on vision, mission, core ideas and presentations.

• Proper collateral must be there to avail business/commercial loans. 

So, please have all the above mentioned documents in place to get a good commercial/business loans in India.

For more information on business loans take unbiased advice from moneymindz,India’s best financial advisor

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Car Insurance: Two-wheelers can either lift up your spirit or fix your spirit for terrorizing

                                     

                                

The winter made the evening darker and gloomier. The valley, filled with mist, thicker and denser, seemed made it deeper and darker. The moisture got into everyone’s throat nostrils and most of the children came down with fever.

Haggard’s crossing in the valley is a cold and unfriendly place. It is a four point crossing where tired travellers stopped to take rest. However, this place in the valley was not comfortable as most of the people avoided it due to unfortunate circumstances happened before. The deep and dark valley filled with dense mist obliterated the serene beauty. The local people narrated that some horrific road accident happened at a winter night at Haggard’s crossing and the spirit of the deceased still rambles on frightening travellers who pass-by.

Joy lived at the head of the valley alone. He is an exceptional guitarist, stayed all by him only except when the neighbours called for supper or asked him for a glass of wine and play the guitar. His old friend Arun and his wife for a celebration asked once Joy to come over to play the guitar and have supper. He assured whether anyone in his locality will be going as the valley was not safe at night and he needed lift. Everything sorted; Joy reached on time and started tuning on his strings, consumption of food and drinks happened to be in vast quantity while energized guests kept on dancing. When, joy rose up from the floor it was past midnight and his companions were gone leaving him alone. He felt heavy on his head and waved a drowsy farewell before leaving for home. There were two roads leading to his home, one being the avoided Haggards crossing. The other road saw a landslide and Joy was left with no option other than taking the shorter and dangerous route. By the time he reached the crossing, he seemed fresh. The cold winds have robbed him off his drowsiness. Adding to that, he spelt a chill down his spine when he started hearing voices.

Now, the villagers say they are literally afraid of taking the road as everybody can see two forlorn figures on a moonlit night.

Get unbiased advice how to Insure your car and drive safely. Joy did not have a vehicle but the person killed there was a drunkard, driving. Have some responsibility because we do not expect you to frighten people by becoming some wandering spirit. The premium paid for car depends on Insured Declared Value.

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#SPEND #SAVE #AND #INVEST_SMARTLY

Tax scenario after demonetisation...

The Central Board of Direct Taxes has cracked down on 18 lakh people who made suspicious deposits of over Rs 5 lakh during the 50-day demonetisation period, as part of its Operation Clean Money. Here is how taxmen are expected to further investigate these possible cases of black money and tax evasion.

Individuals

1. Individuals are exempt from verification for deposits of up to Rs 2.5 lakh (other than minors). No verification required for deposits of Rs 5 lakh for those over the age of 70 years.

2. In case of cash receipts from exempt income such as agriculture, officials will verify these against earlier returns. They may also seek information on land holdings, etc.

3. I-T may seek bank statements to cross-check individuals' bank withdrawals.

4. Those claiming cash receipts from third party as 'gifts', may be asked to pay tax.

5. No need for additional information for those in business if cash holdings are lower than level at the end of March 2016.

Businesses
1. Assessing officer will verify if cash transactions are in line with normal practice by seeking data on monthly sales, stock register entries, bank statements.

2. Investigators will look at abnormal jump in cash sales during November-December 2016 and tally it with sales history.

3. More than one deposit of scrapped Rs 500 and Rs 1,000 notes closer to Dec 30 deadline may trigger attention

4. Non-availability of stock or attempts to inflate stocks by introducing fictitious purchases will also attract scrutiny.

5. Transfer of cash deposits to another entity or account which is not in line with earlier history may invite queries.

To know more about taxation and how to save income_tax

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A Husband-Wife conversation.You will be shock to know what happens Next!!

Aritra and his wife Simran are discussing their financial plans. Aritra is convinced about buying a term plan while Simran is not sure how it will help. She sees it as an unnecessary expense, especially because there is no maturity benefit. Let us see how the discussion goes: 

Aritra (bleak face): simran, I have learnt about #term_plan from Moneymindz – the best financial advisory service In India . Term plan is broader in form and suitable for our #financial_protection. It offers a large cover for a small premium. I think it makes a lot of sense. 

Simran (Quizzical): What does that even mean? Say, if you invest Rs. 20,000 a year, how much money will we get back and when?
Aritra (mild): Let me clarify that a term plan is a pure protection plan, which means that I pay a premium for a fixed number of years, say from now until my retirement age, and get a life cover for that tenure. Suppose, if something happens to me, you will get the cover amount. Otherwise, once the term ends, we will not get anything.

Simran (sardonically): Did you mean that we pay for 30 years, which means about three lakhs, and then not get anything back? Let us put the money in a fixed deposit or a recurring deposit at 8-9% return so that we can get back at least some money after 30 years!

Aritra (alluring): I understand how this looks to you. You must always think in long-term. Imagine that even if we get back the entire premium after 30 years what we will buy with just three lakhs, which will not even last for 3 to 4 months! On the other hand, a term plan will pay you the promised money in case of my demise, anytime during the entire policy term. This means that even if I die after paying a single premium of Rs. 10,000, you’ll get the assured entire sum of one Crore. Now how does that sound?

Simran (deadpan): Why do you always talk like that? You are fit and healthy. Nothing will be wrong with you.

Aritra (pouting): Well, of course darling, I am healthy today but life is uncertain. What if something happens to me and I do not want to leave anything to chance. With a term plan, I can die peacefully as I have assurance that even if I am not here, you will have enough money to take care of yourself. Besides a term plan is not very expensive and once we avail the plan, the premium does not change for the entire term. Besides, never consider it as an expense, it provides us worth much more than a few thousand rupees a year. A suitable cover will help you meet all types of expenses - from household expenses and rentals to EMIs and school fees for our kids.

Simran (smiling): I understand this now. I always knew you were smart.

Finally, Simran understood that #insurance is not an expense but a safety net. It is incomparable to any investment, as it needs a different measure.

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Importance of depositing money in Banks

     
                                           
1. Liquidity:

Liquidity is an important principle of bank lending. Bank lend for short periods only because they lend public money, which are supposed to be withdrawn at any time by depositors. They, therefore, advance loans on the security of such assets, which are easily marketable and convertible into cash at a short notice. A bank chooses such securities in its investment portfolio, which possess sufficient liquidity. It is essential because if the bank needs cash to meet the urgent requirements of its customers, it should be in a position to sell some of the securities at a very short notice without disturbing their market prices much. There are certain securities such as central, state and local government bonds, which are easily saleable without affecting their market prices. The shares and debentures of large industrial concerns also fall in this category. However, the shares and debentures of ordinary firms are not easily marketable without bringing down their market prices. Therefore, the banks should make investments in government securities and shares and debentures of reputed industrial houses.

2. Safety:

The safety of funds lent is another principle of lending. Safety means that the borrower should be able to repay the loan and interest in time at regular intervals without default. The repayment of the loan depends upon the nature of security, the character of the borrower, his capacity to repay and his financial standing. Like other investments, bank investments involve risk. However, the degree of risk varies with the type of security. Securities of the central government are safer than that of the state governments and local bodies and the securities of state government and local bodies are safer than those of the industrial concerns are. This is because the resources of the central government are much higher than the state and local governments and of the latter higher than the industrial concerns. In fact, the share and debentures of industrial concerns are tied to their earnings, which may fluctuate with the business activity in the country. The bank should also take into consideration the debt repaying ability of the governments while investing in their securities. Political stability, peace, and security are the prerequisites for this. It is very safe to invest in the securities of a government having large tax revenue and high borrowing capacity. The same is the case with the securities of a rich municipality or local body and state government of a prosperous region. So, in making investments the bank should choose securities, shares and debentures of such governments, local bodies and industrial concerns which satisfy the principle of safety.

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Life Insurance vs Vehicle Insurance

                 
Interestingly, insuring one's life costs is half of what it costs to insure a car. Yet, under-insurance in life coverage exists. Get high-cover term insurance at low-cost to be properly insured. For most of us, owning a car has been a dream that we all have developed since our childhood. However once it is a way we protect ourselves financially in case of any damages caused by accidents or theft. While people insure a car for Rs 10 lakhs at an annual premium of Rs 35,000, many are still insured for as low as Rs 1-5 lakh, when it comes to our life cover. This need to be addressed and getting adequate life coverage should become a priority.

Why adequate coverage is important?

As a sole earner of the family, one has financial responsibilities to take care of. In case of any unforeseen crisis, one has to not only provide enough financial support to the family to enable it but to maintain the same standard of living as before and also ensure that the long-term goals of dependants are not jeopardised. Life insurance acts as an income replacement tool. Without it, one's investments or assets will have liquidated to meet the financial obligations. However, buying insurance without properly estimating the amount required is of no use. One must adequately cover their family to provide a sizeable amount to the surviving members.

Start with an example –

How much does it cost to insure one's car and one's own life? Car insurance has a cap and cannot be more than its ex-showroom price. In reality, Insured Declared Value (IDV) denotes the amount of car insurance. The premium calculated on IDV keeps reducing each year. On the other hand, there is no insurance cap put on human life value and the actual amount of coverage would largely depend on one's income.

Assuming an IDV of Rs 10 lakh for a car, the annual premium in the first year comes to about Rs 35,000. For the same amount of annual premium, a 40-year-old can get life insurance cover for 30 years through a pure term insurance plan for a sum assured of about Rs 1.75 crores. Else, by paying half of what one pays for car cover, i.e. Rs 14,000, the same individual can get a life cover of Rs 70 lakhs.


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Let us make advices be your priority

It was Monday morning, when people who regularly play with their TV remote for stock market news suddenly switched their channel to see the fluctuations of players for the tenth season in IPL bifurcating from their regular keenness on stock indices. Indeed, it is truly a magnificent event as of pollsters predicting election outcomes and analysts for stock market, cricket gurus were no behind in analysing who would be the most expensive player yesterday. Every season amazes us with a wonder kid sold for a walloping amount, usually a familiar face most of the time. But, in this season, it was something different when the trend line changed its course and some not so well known players were sold for crores. T. Nataranjan, MD. Shiraj and Aniket Chaudhury all came out from the ashes beating notable players like Pujara and Ishant Sharma, for whom viewers went crazy to be a part of their territorial team. Another underdog from Karnataka, K. Gowtham caught our eyes when Mumbai Indians took him for two crores. Finally, people may call it luck but dedication and sheer hard work always pays off even during a series of unfortunate events like Brexit and Demonetization, Ben stokes was the man with the longest smile.

Big companies are expected to perform and people like going there – It is like for safety and backup. Little do they know that they might end up failing to understand what they are planning, what they are buying and what they are getting? Advices are similar to preaching. People speak, plead or argue in favour of someone. Likewise, before getting into a big company for insurance policy, mutual funds etc., it is better to have a hand on them or precisely an “idea” on the products that you are likely to buy.  When people expected big players to come out wealthiest, some unknown figures became the news on Monday. It was truly unexpected and surely, this world is full of equivocality.

Have a plan and get advice before deciding finally contact Moneymindz, who has the best free financial advisers.

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Insurance policy: Taking smart advice is better than overconfidence and experience

An attorney named Krishna in a sleepy town purchased a box of very rare and expensive cigars and insured them against fire among other things. He smoked his entire stockpile of these great cigars within a month; Krishna filed a claim with the insurance company without yet having made even his first premium payment on the policy.

In his claim, Krishna played boldly stating that the cigars were lost"in an encounter with rounds of small fires." The insurance company refused to pay, citing that the reasons were obvious that the attorney had smoked the cigars in the normal way as other smokers do. Attorney, Krishna sued and to everyone’s surprise, he won.  In delivering the ruling, the judge agreed with the insurance company that the claim was not serious in content. The judge stated nevertheless, that the attorney held a policy from the company in which it had warranted that the cigars were insurable and also guaranteed that it would insure them against fire, without defining what is considered” unacceptable fire," and the insurance company was obligated to pay the claim. Rather than endure lengthy and costly appeal process, the insurance company accepted the ruling and paid Rs. 15,000.00 to Krishna for his loss of the rare cigars lost in the "fires."

However, to his bemusement after he cashed the check in the bank, the insurance company had arrested him on 24 counts of arson. With his insurance claim and testimony from the previous case, which used against him, Krishna was convicted of intentionally burning his insured property and was sentenced to 24 months in jail and a Rs. 24,000.00 fine.

So now, you understood how an experienced attorney, like Krishna, caught red-handed for getting involved in forgery. People, themselves knowingA so much make mistakes and in country like India, most of us are not financially literate.

So Moneymindz, thebest free financial advisory service is right beside you before taking any wrong step. We think for you and your future.

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GST: Started as a HERO, slowly becoming a NIGHTMARE

                    


Prime Minister Narendra Modi's government deserves accolade for joining the political alliance needed to pass such a complicated reform, getting the nod from a two-thirds majority in both Houses of Parliament and 50 percent of state assemblies. However, the government may now be undermining its own victory. News emerged last week that the new council of central and state finance ministers empowered to administer the tax, decided on a GST with four levels and numerous exemptions. 

This is even worse than it sounds apart from one thing; many goods will remain tax-free, which actually adds another level with additional surcharges and cesses on certain kinds of goods. Altogether, the number of rates may end up being closer to seven or eight, which is not exactly the sort of simplicity that the #GST promised to bring to paying taxes in India. 

The GST was supposed to be smooth: a single rate, with no exemptions and a single tax form. That would allow companies to know exactly, what they needed to pay and setting-off input costs without excessive paperwork. Actually, it is not clear whether the new GST will in fact reduce paperwork; it may even increase the number of forms that companies will have to submit. 

The government is losing the opportunity to accelerate Indian productivity and growth. The answer goes to the Modi government's failure on economic policy-making. Our Prime Minister has now expelled all kinds of domain experts required to frame complex reforms of this sort. Instead, he has relied extensively on bureaucrats. 

The finance Ministry has made a mess of the GST; which reveals exactly why this is dangerous. For Delhi's bureaucrats, more control is always a good thing. Note what the multiple-rate GST means: Private companies have an incentive to go to Capital and press for their products to shift to a lower tax slab.

For more information about GST, contact #Moneymindz, the best free financial service.

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#spend #save #and #invest_smartly

How to save Tax? Here are some Tips:-

Albert Camus,” Note, besides, that it is no more immoral to directly rob citizens than to slip indirect taxes into the price of goods that they cannot do without."


There are various ways to save tax. Tax is something our government pays to their fellow citizens in the name of employment and then robs knavishly.

People invest onto Life insurance, ELSS, PPF because they are the best ways to save tax. However, these are not the only ones – there are other methods where you can save your back as much as possible.

Gift your relatives’ money – 

Tax benefit can be useful by the assesse if they associate their income with another individual. This is termed as Deemed Income under various provisions, which is mention in section 60 to 64. The limitations for this scheme is that the sum of money received from persons, other than relatives are taxable if the amount surpasses Rs. 50,000.

Therefore, for benefit gift the money to your wife, children (above 18 years) and your parents who does not have taxable- income.

Claim stamp duty and registration fees – 

The benefits can be claimed, by filing refund for stamp and registration under section 80C for purchase of a house. The deductions cannot be demanded in any year other than that of the actual payment of the expenses, secondly if someone else has paid for the assesse and thirdly if the house is under construction or they do not possess the house.

Tips: Joint owners can get deductions up to Rs. 1.5 lakh each in which they share house under sec 80C. Any other expenses paid for transfer of property are also exempted to deduction under sec 80C.

Others tips include, 

Declare your losses in tax return to save tax in future. The IT act will set off losses. Having any ailing individual dependent at home, especially at home can easily be benefited under sec 80DDB. For more information, contact MoneyMindz offering free financial advisory service.

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Home Insurance: Better protection, Better Future

                       

The year was 2016. A survey, on the month of June nearly 1,200 people from metropolitan cities in India like Delhi, Kolkata, Mumbai, Bangalore, Hyderabad, Chennai, others, revealed something terrifying, which shows a statistics that only 30% of homeowners in India have insurance for either their house or its contents. While out of all the respondents in the survey carried out, 75% of them believe that some form of home insurance is essential, most of them faced difficulty in understanding home insurance clauses and products, which kept them from protecting their home. This clearly indicates a lack of knowledge about this subject.

So what is home_insurance?

Whenever a belonging is damage, due to any catastrophe or accident, home insurance policy will handle the cost of the damage, thus offering sufficient fixture. Not all types of damages are covered and different home insurance policies cover different types of damage. For example, a premium policy might cover earthquakes, floods and more.

It is quite expensive but monthly payments may be affordable, but it depends upon your research to pick the best policy and provider for your property. For instance, someone living inland does not need to worry about a tropical cyclone. Accordingly, people living in earthquake-prone areas must have a premium home insurance plan that will cover them during earthquake.

Some policies will cover personal property damage as well. The personal goods damaged in any event will be compensated with monetary payment. Insurance for property damage is incredibly crucial for people living in rented houses. They may think that because you do not own the house, there is no need for insurance, but the contents of the home also needs protection in case of any disaster.

There are several ways; you can make home insurance affordable.

Firstly, before purchasing a policy, an accurate comparison between different policies provided by different insurers is must, which will help you decide which policy will get you the best deal.

Secondly, many #insurance providers give discounts on premiums based on the installation of smoke detectors, burglar alarms etc. These will not only keep home safer, but also lower premiums.

Lastly, choose a policy that covers you for disasters if your home is actually at risk of; if you live in a fairly dry region of Rajasthan, the risk of flooding is rather obscure and will only add premiums without providing any actual benefit.

Those who are sceptical to purchase home insurance due to high premiums are advised that it can be extremely affordable with the right plan. MoneyMindz, the best free financial advisory service will provide you with information. If you are looking for an insurance, just contact us.

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Let us look at the positive side of our nation moving towards cashless economy

Our country is tardily moving towards a cashless environment after demonetisation whereas the initial awe and confusion have created a rapid active commotion. Now the question is will the intensity of online transactions provide a state of suitability and touchable benefits or just add stress and panic?

For moving towards a cashless economy, the government has come up with a rash of discounts and free schemes on digital transactions. However, will these be substantial enough and, along with other benefits?

Pros

Suitability

To make financial transactions easy, it is probably the biggest innovation to go digital. People do not need to carry stacks of cash, plastic cards, or even queue up in front of ATM for withdrawals. Cashless economy is also a safer and easier podium for spending options when people are travelling. This will have an enormous benefit if the lower income group are kept aside, who will be facing a huge challenge. Nevertheless, for the rest of the nation, it will be simple and smooth.

Tracking spends

Suppose all transactions are on record, it will be very easy for people to keep track of how much they are spending. It will be of great help while filing income tax returns and, in case of a examining, people will find it easy to explain their spending. Besides the tax, digital economy will have a good impact on budgeting.

Lower risk

If a persons’ ATM card is stole, it is easy to block it or mobile wallet remotely, but it is impossible to get cash back. In that sense, the digital option offers limited security. This is especially true while travelling abroad, where loss of cash can cause great peril. Besides, if the futuristic cards evolve to use biometric identity like fingerprints, eye scan etc., it can be extremely difficult to copy, making it a very safe option.

Small gains

It may not seem like much of an advantage, but being cashless makes it easy to ward off borrowers. One more aspect that is positive is that people can pay the exact amount without worrying about not having smaller denominations for getting it back from shopkeepers.

Mutual funds are pool of money from various investors.

It is an easier process than buying individual stocks and bonds. Many advisors have asked their clients to dissever their investments between large-cap, mid-cap and small-cap schemes than investing the entire sum in a multi-cap or diversified equity schemes. "Funds which are focused on specific caps have the potentiality to perform better”, as said by a mutual fund advisor based in Bangalore.

Depending upon the speculation of the fund manager, multi-cap or schemes with increased options are supposed to invest across stocks in different market capitalisation. The apportioning to each of the market-cap varies for different strategies. Some plans have fixed symmetry while some change it dynamically depending on the condition of the market.

However, if we look the other side, a large-cap, mid-cap or small-cap scheme have to invest commonly in stocks in the specific market capitalisation. That means a scheme of large-cap would invest predominantly in large-cap stocks, while mid-cap scheme would invest mostly in mid-cap stocks.

"A person with high risk appetite can distribute the investments manually," as quoted by a mutual fund advisor based in Bangalore. Let us share a real example where a person invests Rupees one lakh each for two of clients on November 6, 2014. While one of the clients preferred to invest in multi-cap schemes, the other one decided to go with the recommendation of a mutual fund advisor splitting the investment between different funds with a focus on specific category.

A calculation for the returns of the clients after 2 years i.e. on November 7, 2016, has been done where it have seen that the client who invested in a particular category focussed scheme, earned 5 per cent more. The CAGR for the portfolio of the first client was around 7.96 per cent, whereas the portfolio of the other client returned only 1.63 per cent.

#MoneyMindz carried out this experiment and people were satisfied by investing in mutual funds, using our #Free_Financial_Service and Advices. So contact us quickly for getting better returns by investing in Mutual Funds.

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