Financial Planning

Gain some & Lose some

“You win some and lose some, I heard that my whole life
I heard that my whole life, but that doesn’t make it right” … song lyrics by Big Sean.

Indian equity market remained under pressure throughout the week, due to weak global cues and heavy sell-off in banking stocks. RBI’s restriction over Punjab and Maharashtra Coop Bank, huge sell-off in Yes bank, IndusInd bank NBFC exposure, led to negative sentiments with investors, with FII’s remained net-seller in the cash market.

Friday – 4th Oct, we witnessed buying in the morning trade, but indices declined sharply post the rate-cut announcement and cut in the GDP growth forecast, reducing it to 6.1% for FY20, from 6.9%. RBI cut Repo rate by 25 basis points to 5.15%, a fifth consecutive rate-cut to boost growth and decided to continue accommodative stance, to reduce the lending rates, in-turn to spur spend with more funds in hand.

Sensex settled at 37,673 & Nifty at 11,174; both down by 2.2% this week. Except IT sector, all other sectors & indices ended lower. Major selling happened in Banking, FMCG, Financial Services.

Asian market; continuous sell-off seen in Asian market in this week due to concern over U.S china trade war, slowing growth and US new tariff on European aircraft and agricultural products. Outlook over coming week remains rangebound.

The Party Continues!

Indian Benchmark indices carried out gains of 20th September throughout the week, on a positive decision of a cut in corporate tax rate by our dear Finance Minister earlier.

Many of us were caught in the middle, what to do next?

Sensex and Nifty remained volatile due to low Global clues like US political issues, issues related to US-China trade disputes, with three sessions ended in a positive bias, out of 5 sessions. Sensex settled at 38822 & Nifty 11512, cheering up everyone’s mood & sentiment.

Asian market was trading at a mix territory, whereas European stock went-up on a hope of easing economic growth concerns.

Outlook over coming week remains Positive, on a domestic front; due to supportive sentiments, and outcome from finance minister meeting with Bank Heads, and on the international front; hope of development in the Global front, FII/FPI’s buying, easing crude prices.

Blockbuster Friday

Like a blockbuster movie’s Day1 opening, today’s announcement by our dear FM Nirmala Sitharaman, pulled the market up by 2000+ points, like there is no tomorrow, snapping losses of last few weeks in a historical single day gain (in last Ten years).

Sensex settled at 38014, a gain of 5.32% percent!! Aggressive buying was seen in banks, auto and metal stocks. IT shares lagged the broader rally, as rupee edged higher at 71.12.

Asian stocks also ended higher on Friday, as economic stimulus around the world eased fears of economic deceleration. On the trade front, Chinese and U.S. delegates are meeting Thursday and Friday ahead of higher-level meetings expected early October to resolve the year-long trade dispute.

Stimulus announced by FM Nirmala Sitharaman on Friday are:

  • Corporate tax slashed to 22% for domestic companies, subject to condition they will not avail any incentive or exemptions (the effective corporate tax rate after surcharge will stand at 25.17%).
  • Manufacturing companies set up after October 1 to get an option to pay 15% tax (17.01% inclusive of surcharge & tax)
  • Listed companies that have announced buyback before July 5, 2019, tax on buyback of shares will not be charged
  • To provide relief to companies availing of concessions and benefits, a MAT relief by reducing it from 18% to 15%
  • Higher surcharge will also not apply on capital gains on sale of security including derivatives held by FPIs

Reverse EMI

Which is better – EMI or SIP (monthly savings)?

Can I buy IPhone-11 on Sept 27 th ?

Last night we ganged up for dinner, to celebrate my dear friend’s birthday. Amid talks on life, markets and bosses, one specific topic that caught everyone’s attention was that our birthday girl gifted herself a Scooty!

She narrated her story on how she was saving for over a year to buy this Scooty, and how her travel will now be so damn easy. Sounds so nice.

As usual, one of us, the Wise-guy interrupted, giving Gyan on using the EMI option, thru which the birthday girl could have got the Scooty much earlier. To this, our birthday girl smiled and replied that she doesn’t like a loan on her head, also the interest on the loan would just add up on the burden. Saving is easy for her, living with a loan (however small), is difficult. Though that’s her perspective, but not many of us bought this logic last night 😉.

It’s the same story across the millennials, where instant gratification is the buzz word. IPhone-11 will be launched on Sept 27th, and I know many of us are just waiting for the day to grab & show the latest asset around.

It all looks attractive (EMI I mean), but none of us gets down to calculate the devil in it, the interest we end up coughing, to achieve this goal. Let’s understand this thru a very basic example, i.e. Rs.5,000/- paid as EMI for 12 months and Rs.5,000/- saved as SIP for 12 months.

EMI Option: Rs.5000/- EMI per month, for 12 months means that, one can purchase product worth Rs.56,275/- only, as rest of the amount i.e. Rs.3,725/- will be paid as Interest to the bank. Noting comes free.

Savings (SIP) Option: Rs.5000/- saved per month, for 12 months goes to a RD account in bank, @8%, end of year one will have Rs.62,665/-in the account or Rs.6,390/- extra compared to EMI above. On the other hand, if same goes to Mutual Funds, with higher returns, depending on tenure & risk profile, this extra amount could be more.

Idea is not about the last minute purchase, but the discipline to start savings at the first instance, i.e. first salary… which also means, since I started saving from day 1, I can literally buy my IPhone-11 costing 65k on Sept 27th 😉.

Stranger on a Train

It’s not about the 1951 Alfred Hitchcock psychological thriller, but about my commute, and an invigorating conversation with a stranger 😉.

Few days back, while travelling home from the office, a co-passenger in metro asked me directions to an address. The chat started through an address, which I explained him descriptively. He shared some details about him business travel and told that he learns new routes every time he visits a new city. When he asked me about my whereabouts, I introduced myself as a Mumbaikar and a financial advisor.

He couldn’t wait for me to complete… and started discussing his equity and mutual fund portfolio. This wasn’t new for me, as I had many such experiences in the past. In India, whenever we see a doctor or financial advisor, we start with our illnesses or portfolio discussions.


A Goal without a Plan is just a Wish

  • Antoine de Saint-Exupery, a Frenchman
  • In French – Tout objectif sans plan n’est qu’un souhait

Learning a language can be a thrilling experience, it brings with it, it’s lifestyle, cuisine, history, and culture, which is completely different from where we are to be discovered!

While learning French, one discovery led to another, and it so happened that I fell deeply in love with the French art and immersed myself in the culture for seven long years! Through my expertise, I even got the opportunity to teach this language to young adults in a college. 


Why the word “Diversification” is given so much importance in Financial Planning?

diversification Importance

There’s very common saying “Do not keep all your eggs in same basket. Diversification means same, do not invest in only one asset class/only one sector. In India people generally prefer in investing in only two asset classes which are Gold & Real Estate.Historically they are known to give good returns & less risky,But in order to secure your portfolio from all ends & to earn more than inflation rate “Diversification” is very important.


Why Disclosure of Income is Important

disclosure of income

Once you have selected the financial advisor/planner of your choice, the next step will be to meet them and discuss about your financial plan. Your advisor will need to ask you questions related to personal and professional matters to get to know you better and to device suitable plan for you. This means that you should be honest with your advisor with questions relating to these matters, especially when it comes to disclosing your income.


Things To Consider Before Finalising Financial Goals

Things To Consider Before Finalising Financial Goals

The purpose of financial planning is to achieve your goals. Your goals help you to shape your investments as per your requirement. Therefore, you must be very clear about your goals before you start planning your finances. Your financial advisor will also be able to help you better if you are clear with your goal. Here’s what you should consider before finalising financial goals.