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Direct Plan Vs Regular Plan in Mutual Funds Investment

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I am confused?
There is a big hoo-ha in the market & media now a days related to “direct plans”.
What is a direct plan? How does one benefit from a direct plan? And compared to regular plan, which is better?

Let’s first understand Mutual Fund charges.
Mutual fund (MF) investments come with an inbuilt fee structure or charges, which is certain percentage of the amount invested. This charge, which is usually between 1.75% to 2.5% for equity schemes annually, is debited on the total investment made or the AUM (Asset under management) every year. In simple terms, if one wants to invest 1lac in some equity MF scheme, where annual charges is 2.5%, Rs.2500/- will be debited by the AMC (Asset management company) towards

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May 27, 2016 Mutual Funds, , , 0 Read more >

How to Create Your First Budget?

How to Create Your First Budget

There are many milestones of being an adult. Signing your own lease for the first time, being able to rent a car, having someone call you ma’am.

But being an adult also means being responsible for your own finances. Like many things, you can’t have a successful financial future if you don’t plan for it. The best way to do that? Create a budget.

Creating a budget can seem daunting, but it just requires a series of steps. See below for help on creating your first budget.

Track your expenses

Before you can start a budget full of limits, you need to know how much you’re spending right now. Take two or three months to spend normally and track your transactions in Moneyfrog.in.

Fixed expenses like rent, insurance and utilities will be easier to monitor than variable expenses, such as groceries, entertainment and travel, which will fluctuate month-to-month.

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May 20, 2016 Financial Planning, , , , , , , , , , , , , , , , , , , , , , , 0 Read more >

Rebalancing of Portfolio

Portfolio Re-balancing is important?

“Re-balancing of Portfolio” is the term, which is widely used in the mutual funds industry, by the so called media-prophets & with most of the advisors with banks/ brokers/ CFP.

What does re-balancing means? And how does it applies to one’s portfolio?

As per Investopedia: Re-balancing is the process of buying and selling portions of your portfolio in order to set the weight of each asset class back to its original state. In addition, if an investor’s investment strategy or tolerance for risk has changed, he or she can use re-balancing to readjust the weightings of each security or asset class in the portfolio to fulfill a newly devised asset allocation.

In an ideal scenario on portfolio recommendation, which is based on tenure of goals & the risk tolerance score,

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April 14, 2016 Mutual Funds, 0 Read more >

Want to cut risk and tax without compromising on returns?

While equity mutual funds are expected to beat other class of funds in the long term, short-term volatility is unbearable for some investors. For them, balanced funds are a better option because their equity exposure is usually restricted to 65-75%, and the debt portion of 25- 35% lends stability to the fund. “Though the returns from balanced funds will be lower than that of equity funds in the long term, their volatility will also be lower. So, on a risk-adjusted basis, it should give better return on a 5-7 year holding period,” says Vikram Dalal, Managing Director, Synergee Capital Services.

Both equity and debt are expected to do well in the coming years, because the expected decline in interest rate will be good for both asset classes. “Balanced funds make immense sense in periods like this, when both equity and debt are expected to do well,” says Nikhil Kothari, Director and Chief Financial Planner, Etica Wealth Management.

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February 2, 2016 Mutual Funds, , , , , 0 Read more >

Common Mistakes You Should Avoid While Investing to Save Tax

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A young married couple walks into the local branch of a private bank on a cloudy, cold weekday of January. Both of them are getting late for office, but have enough time to start a tax-saving fixed deposit (FD).

The bank executive, instead, sells them a ‘better’ product, whose gains are non-taxable, unlike FDs.

The product that he offers is a tax-saving plan that also gives them life cover, guaranteed returns and bonus. And guess what, they can withdraw the money after five years, when they will receive the premium along with added bonus. They think it’s a good deal and write the cheque.
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December 1, 2015 Tax, , 0 Read more >