Sanjeev Chandran - The Complete blog for MF & Markets: ALL ABOUT GOLD FUNDS

Sanjeev Chandran - The Complete blog for MF & Markets: ALL ABOUT GOLD FUNDS: "Are you looking for investment options, here's a best opportunity for you to invest your money in 'GOLD'. Below is the details mentioned fo..."

ALL ABOUT GOLD FUNDS

Are you looking for investment options, here's a best opportunity for you to invest your money in 'GOLD'. Below is the details mentioned for the benefits & details regarding 'GOLD FUNDS'.

GOLD SAVINGS FUND:

Gold Savings Fund opens a new avenue for investing in gold as an asset class. The Fund seeks to provide returns that closely correspond to returns provided by Gold Exchange Traded Fund (GETF) which in turn invests in physical gold. It enables to reap returns of gold in paper form without the need of a demat account.

What are the benefits of investing in Gold Savings Fund?

1.    Gold Savings Fund opens a new avenue for investing in gold. This fund enables to reap returns closely to returns provided by Gold ETF.

2.    “Open door for non – demat a/c holders: Investors can invest in this fund through the physical mode across the country thereby making it easily available and convenient for non demat a/c holders”

3.    This investment technique enables you the following benefits: Small, regular investments: A simple way to enter the market by investing small amounts. Small but regular investments go a long way in creating wealth over time

4.    Availability of add-on facilities: Ease of availing add on facilities like Systematic Transfer Plan/ Systematic Investment Plan/ auto switch /trigger facility etc.

5.    Liquidity: An investor of Gold Savings Fund can subscribe and redeem units on all business days directly from the AMC, while purchase and sale of gold ETF units is a factor of liquidity on the exchange.

6.    Ease of investing: Investing in gold through Gold Savings Fund, the investor can directly subscribe/ redeem units thorough 'ONLINE PLATFORM' provided by us.

7.    Cost Effective: Investing in gold through the gold Savings Fund in physical application mode enables you invest in a low cost manner as the investor does not have to incur charges like annual maintenance charges for demat account , delivery brokerages charges, transaction charges incurred for investing through the dematerialized mode.

8.    The investors will be bearing the recurring expenses of the scheme, in addition to the expenses of underlying Scheme.

9.    Taxation Benefits: Investments in the fund are eligible for long term capital gains tax after 1 year of investments whereas in case of physical gold the investor is eligible for long term capital gains after a period of 3 years. The investments in the fund get similar taxation as debt mutual fund schemes.

10.  Wealth Tax Benefit: Investments in Gold Funds carries a exemption of 'Wealth Tax' whereas physical gold does not carry this benefit.

Why should one invest in Gold Savings Fund?

§  Gold Savings Fund provides an easy and a convenient way for Portfolio Diversification

§  Opens doors for non –demat account holders as it provides the facility to invest through the online medium 

§  It enables you to avail long term taxation benefits from 1 year unlike physical gold wherein long term taxation can be availed after 3 years

§  The fund invests in Gold ETF which in turn invests in physical gold of purity of 99.5 % or higher, thereby relieves you of any impurity concerns.

§  The gold invested in Gold ETF is stored with the custodian; hence you need not worry about the storage cost.

To know More details or invest contact sanjeevc@ifastfinancial.com orsanjeev.chandran@gmail.com.

Want to invest in this fund? We provide personalized services at your place. If yes contact Sanjeev Chandran +91 9994049977 / +91 92824 00328

http://about.me/sanjeevchandran/bio

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Kick Start Your Financial Plan

Most of us at some point in our life have felt that we don't have enough money to make our dreams come true! This is expected and why not, as there are only two ways to earn money and they are:
• You work hard and you get paid for it.
• You make your money work hard and you get paid in return.

Now, how can you make your money work harder and get paid in return? So, investing is a way of making your money work harder for you. Before, we get into discussing about investing; first, you need to know yourself. 

A much learned man has said, "The ability to ask the right question is more than half the battle of finding the answer". Therefore, as an investor, your job is much easier as you only need to ask three fundamental questions; which Are:
• How much money do I need?
• By when do I want this money?
• How much downside am I willing to take to earn this money? The first two questions talk about your gain. The third question talks about your ability to take some heartburn as it is well known that, there can be no gain without some pain in this world.

Industry pundits have got jazzier terms for all the three fundamental questions.
• "How much money do I need?" becomes Future Planning• "By when do I want this money?" becomes Time Horizon• "How much downside am I willing to take to earn this money?" becomesRisk Level [We shall discuss Risk Level in our next blog post]

Future Planning:If you don't sit down and decide your exact financial goals, you will always be in a stressful state of 'needing more' and you won't know how much is enough.
So, the first thing you need to determine is how much you need to pay for all the expenses in your life (expenses can include- buying a house, a new car, a foreign exotic holiday, your children's education fees or your day to day expenses) , and how much you need to retire in a relatively comfortable state. 

Time Horizon:The next step is to ask yourself: By when do I need this money?

The rule is this: the longer the time frame that you have for your investments, the more likely you are to make positive returns. Also, you can afford to take on more risks. If you are pressed to make a quick buck in a very short time, chances are you won't do very well. This is because markets are unpredictable. While it is true that over the long term, mutual funds have given great returns, in the short term, prices may fluctuate.

If you are caught with prices falling, and you do not have the luxury to wait it out, then you would have to sell at a loss.
Mutual Funds are medium- to long-term investment instruments. It makes use of the biggest ally of all long term investors, and that is TIME. If you have TIME on your side, you can ride out any dips in market cycles and use those dips to your advantage.
So, at least some of your money should be invested for longer horizons or you should start early and hold your investments for long term.

Sit Tight, Hang OnAfter you have chosen the mutual fund and invested your money in it, simply sit tight on it.
There are several good reasons for this:
i. Cost savings. Every time you decide to sell a mutual fund and replace it with another, you incur additional costs - exit load from the old fund, short term capital gains tax and so on.

ii. Hard to catch the right timing. If you're buying and selling, it must mean that you are trying to time your investments, hoping to catch the momentum of each mutual fund. The truth is that it is very hard to catch market timing. Even if you can get 70% of your decisions right, the 30% of your wrong decisions can cost you all your earnings or more.

iii. Earn potential returns. Don't decide to sell a fund only because it has gone up 20% or turned negative 10% within 6 months! You should sell a fund when its underlying valuation is high and buy a fund when its valuation is low. Therefore, even with a fund which has gone up 20% or fallen by 10%, if it’s underlying valuation remains low; the fund is likely to go up in the coming future.

Slow and steady wins the race. Let TIME be your ally. Sure, the temptation to sell a mutual fund after it has done 20% is great, but your best bet to a healthy financial future is to stay with it. Over the long term, it may only give you an annualised return of only 15% a year (some years it will give negative returns), but if you compound 15% over those number of years, you will see how big your investments can become!

Be Smart, Start Early

Be Smart, Start Early

Most of us find finance and investing too complicated and irksome. But did you know that investing small amounts regularly and keeping a check on your savings and expenses can take care few of your monetary problems. Sounds easy! After all a good work-life balance is supplemented by effective budget management, which translates to, keeping your credit card bills in check, planning your household needs and investing wisely. In this post, we will show you how early bird catches the worm ;-)

Why should you start early?

People always advise us to start investing from an early stage without providing us the reasons for it. We tell you the profits and the reasons of early investing in the following short story.

We consider two gentlemen, Mr. Amar and Mr. Prem. Both join the same company - ABC Ltd. as fresher when they are 25 years old. Amar diligently sets aside INR 1000 from his salary every month to invest in a mutual fund, whereas Prem feels he is still too young to worry about finances.

In the middle stages of his life Prem also starts investing the same amount in a mutual fund.

Amar and Prem, both wish to retire comfortably when they are 50 years old. Now, considering 10% rate of return adjusted for inflation, at retirement, at the end, Amar would have Rs. 11, 80,165 while Prem would end up saving only Rs. 3, 81, 270. So, clearly Amar’s accumulated wealth has tripled because he started investing early in life.  

You may think, even though Prem started investing later, he could compensate for the difference by increasing his investments in mutual funds with the simultaneous increase in his earnings over time. However, you need to consider: salary hikes are accompanied by an increase in responsibilities adding up your expenses. As Prem has a family few years down the line, which he supports unlike the early years of his career when he was a bachelor.

Now considering, if at the age of 35, Prem wishes to have the same corpus as Amar, how much do you think he will he have to shell out?

To end up with an equal amount of accumulated wealth, Prem will have to contribute three times of the initial outgo! Surprising, isn’t it? Therefore, we can always start investing small amounts with top-ups.

How can you start to invest early?

After understanding the importance of early investing the next question in your mind is: How do I start investing? We provide you easy steps which help you buckle up your seat belt and start investing early.

1. Set aside an amount: The daily mundane routine leaves you little time to fret over something as complicated as investing. You can fix this by preparing a simple budget in order to assess your spending. Expenses for entertainment purpose like dining at restaurants, purchasing consumer electronics or luxury goods and miscellaneous expenditure on home renovation etc., can come under discretionary expenses.  The basic necessities of everyday life can comprise non-discretionary outlay. Thus, budgeting will help you segregate your needs from your desires. Apart from this, you can also create a contingency fund for an unforeseen emergency which should ideally be equal to 3-6 months’ of your salary.

After considering actual and anticipated expenses, the surplus will give you a picture of the amount of money that you can set aside for investing.

2. Set your financial goals: The second and most crucial step of being fiscal free is Goal Setting.  This should be done keeping in mind your major commitments like proceeds towards daughter’s wedding or down-payment for a new house or car.

While setting your individual goals, you should:

• Know your goals precisely. For example, goal could be a regular stream of income after retirement
• Put a figure to it. Suppose, you are 25 years old and wish take a break from work at 40, to relax or to start something of your own. So, in order to support your lifestyle during the hiatus, you should have a corpus that can provide at least 80-90% of your income.  

Shorter the period between your current and retirement age, more monthly savings need to go into building your retirement corpus. Chart 1 here, illustrates the accumulated amount assuming return and time period. Even if the return (CAGR) is higher, ultimately you could amass huge wealth with the long-term investments due to the power of compounding.

3. Acknowledge Purchasing Power: There may be a fall in the value of money owing to factors like inflation, opportunity cost of money etc.

Let’s say, 1 crore may not be worth the value on your retirement that it garners today. In the same way, your mom could buy a month’s grocery with INR 1000 10 years back which is certainly not possible now!

Conclusion


Managing money is critical for realising your goals. The goals for every individual may vary from saving for an exotic vacation to supporting kid's admission in a premier league college. Starting early is one of the basic principles of investing that can definitely help you in achieving your much desired goals.

5 Tips To Be Inflation-proof

5 Tips To Be Inflation-proof

A funny but powerful way of defining inflation – ‘It happens when everything gets more valuable, except money!’

The consistent increase in the prices of basic goods and essential services squeezes out all the money from our hands. Inflation in a high growth and developing economy like ours continues to remain a worry for all. In the past, we have had governments being given a pink slip owing to steep rise in onion prices and you must be familiar with the bandh last year to protest against inflation. While efforts are made by the central bank and government alike to keep the price rise under check, what do we do to safeguard ourselves against inflation which smartly keeps reducing our savings?

Food for Thought:

It is never too early or too late to invest! World’s greatest investor, Warren Buffet started investing in shares at the tender age of 11.

I. WHY NOT DEPOSITS

We know that in order to restrain the inflationary pressures, the central bank hikes the interest rates. As a result, depositors enjoy higher interest rates on their fixed term deposits. But here lies a catch!

Did you know? - Inflation reduces the real value of your money.

For example, you bought a food item at INR 100 in 2010. Assuming an average food price inflation of 10%, this food item will cost you INR 110 today. Thus, though your expenses are still the same, you are spending more! The same principle applies to your deposits which should yield you more returns.

In effect, your fixed deposit rate (x) should be more than inflation (y) to effectively beat the 10% price increase. Therefore, your real or actual return is (x-y) should match or exceed the ‘inflated’ cost of living which is often not the case. A fixed deposit generating 10.5% is actually yielding only 0.5% on your money.

II. NEW PENSION SYSTEM (NPS)

Today’s generation wants to retire early, has limited or no post employment pension and intends to live a self-indulgent life. Building an adequate corpus to take care of expenses and a comfortable livelihood after retirement is important; moreover, because inflation erodes the corpus value. Therefore, an extremely cheap annuity plan like NPS is a viable option.

III. DIVERSIFY INTO EQUITY ASSET CLASS

As proven by the past market cycles, despite the short-term fluctuations, the returns generated from equities supersede other asset classes in the long term. Thus, the portfolio strategy to beat inflation is significantly aided by allocation to equities.

Plus, it is better for you to have a diversified portfolio of stocks or invest in a diversified equity fund without a sector or industry bias. Contrary to the depositors, higher borrowing rate by banks deeply impact the credit requirements of corporate and individuals. So sectors such as Real Estate, Infrastructure and Power which require huge liquidity to supplement their long gestation plans are greatly affected.  Despite this, there are sectors which source raw materials such as food grains and industrial metals, and offer essentials like utilities, health and personal care on which individual and industry depends on, would continue to function the same way. In fact, companies that produce these primary goods would benefit from the price rise.

IV. ALTERNATE OPTIONS: COMMODITY INVESTING

Investing into agriculture-based funds is another option for you.  There are also commodity funds which invest in companies related to agriculture, precious metals (read gold), energy, metal and mining industry. But commodities prices are highly cyclical and are subject to macro-economic policies, geo-political environment, and consumption demand. In case of global commodity based funds, currency risk is also applicable. However, if you are an aggressive investor then you can include these funds in you supplementary portfolio. 

V. GOLD – TRADITIONAL HEDGE

We have a significant allocation to Gold albeit in jewelry form. With the emergence of ETFs and Gold feeder funds, people are gradually looking at the yellow metal for investment. It also serves as a hedging tool during uncertain times. Presently, the steep rise in Gold price is due to the slow recovery in the developed markets.  However, you have to bear in mind that Gold does not generate interest income or pay dividends so it is more of the appreciation in value that would actually benefit your portfolio.

Apart from these 5 investment avenues, REAL ESTATE can also generate inflation adjusted returns in form of rental proceeds. However, we have not included property investments as it is quite cumbersome, less liquid and requires big ticket size.

Over a period of time, wealth creation is an eventuality and concern, not just to surpass the price effect but also to support your lifestyle needs particularly, post retirement. If you start investing early in life, the magic of power of compounding would help you grow your net worth sizably. Even if you haven’t started yet, a disciplined approach and regular investing would bring handsome gains.

Fund managers’ survey indicates that equity might outperform other asset classes

http://www.moneylife.in/article/fund-managers-survey-indicates-that-equity-might-outperform-other-asset-classes/16697.html

Everyone Wants A Free Lunch

http://www.valueresearchonline.com/story/h2_storyview.asp?str=17082