Balanced Funds Vs Large cap Equity Funds

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 Conservative investors can consider balanced funds when investing for long term...

 

Balanced funds suit investment needs of slightly conservative investors who are apprehensive of equity markets and want to invest for long-term. These funds invest a large part of their assets in equity (60-80 per cent) and rest in debt. The debt portion helps in limiting the volatility in returns compared to a pure equity fund. Therefore, these funds provide better downside protection, compared to an equity fund, during market downturn. At the same time, investors in balanced funds have to compromise with lesser returns during the market rallies.

 

Equity funds, on the other hand, are for relatively bold investors willing to take some risk. Even though large-cap equity funds invest in big, stable companies, balanced funds score better in tough times.

 

Following graph gives a comparative analysis of the category of balanced and equity funds. Balanced fund were less hit during the market downturn of 2008 and 2011; but also returned less in the subsequent rallies.

Happy Investing!!

We can help. Call 0 94 8300 8300 (India)

Leave your comment with mail ID and we will answer them

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---------------------------------------------

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

1. ICICI Prudential Tax Plan Invest Online
2. HDFC TaxSaver Invest Online
3. DSP BlackRock Tax Saver Fund Invest Online
4. Reliance Tax Saver (ELSS) Fund Invest Online
5. Birla Sun Life Tax Relief '96 Invest Online
6. IDFC Tax Advantage (ELSS) Fund Invest Online
7. SBI Magnum Tax Gain Scheme 1993 Invest Online
8. Sundaram Tax Saver Invest Online
9. Edelweiss ELSS Invest Online

------------------

Best Performing Mutual Funds

1. Largecap Funds Invest Online
1. DSP BlackRock Top 100 Fund
2. ICICI Prudential Focused Blue Chip Fund
3. Birla Sun Life Front Line Equity Fund
2. Large and Midcap Funds Invest Online

1. ICICI Prudential Dynamic Plan
2. HDFC Top 200 Fund
3. UTI Dividend Yield Fund
2. Mid and SmallCap Funds Invest Online

1. Reliance Equity Opportunities Fund
2. DSP BlackRock Small & Midcap Fund
3. Sundaram Select Midcap
4. IDFC Premier Equity Fund
3. Small and MicroCap Funds Invest Online

1. DSP BlackRock MicroCap Fund
4. Sector Funds Invest Online

1. Reliance Banking Fund
2. Reliance Banking Fund
5. Tax Saver MutualFunds Invest Online
1. ICICI Prudential Tax Plan
2. HDFC Taxsaver
3. DSP BlackRock Tax Saver Fund
4. Reliance Tax Saver (ELSS) Fund
6. Gold Mutual Funds Invest Online

1. Relaince Gold Savings Fund
2. ICICI Prudential Regular Gold Savings Fund
3. HDFC Gold Fund

Buying property worth Rs 50 Lakh? You have to pay TDS

Invest In Tax Saving Mutual Funds Online

Download Tax Saving Mutual Fund Application Forms

Buy Gold Mutual Funds

Call 0 94 8300 8300 (India)

 

 

From June 1, the sale of any immovable property where the value exceeds Rs 50 lakh will require a 1% TDS on the transaction

A TAX deduction at source (TDS) provision brought into force will cover property transactions. People will have to take this into account while undertaking property deals. Non-compliance could land them in trouble, which is why it is important to look at the details of the provision and how they apply.

Application:

From June 1, the sale of any immovable property where the value exceeds Rs 50 lakh will require a 1 per cent TDS on the transaction.

Importantly, when there is a transaction wherein the value set as threshold is crossed then the entire provision has to be implemented. Making it difficult for the individual, real estate prices are so high nowadays that it is easy to hit the limit. This brings a lot of transactions under the tax net and requires additional efforts to ensure that these conditions are met.

Buyer to deduct:

It is important to understand the manner of operation of the transaction. When there is an agreement for transfer of an immovable property then the buyer would pay the seller the price of the property and the seller would transfer the asset's ownership to the buyer. Under the tax rules, in a situation like this, it is the transferor's duty to ensure that the tax deduction is undertaken and the amount is deposited with the government. This means that next time you purchase a property, this is the additional condition that you will need to fulfil. Some preparation needs to be made beforehand for this purpose.

 

No TAN required:

There is a relief proposed in the transaction for the party who is going to deduct the tax. Usually the person who deducts the tax needs to have a special number, TAN, just like his PAN, which tracks the deductions and his payments to the government.

In this case, the individual buyer might not have a TAN because he does not need to undertake such transactions as a regular activity. This is a relief for the individual because he does not need a TAN for this deduction.

The process for the filing too is available online, making it easy for the individual to complete the details.

Some questions still remain.

How, for instance, will the transaction work in the real world? There has to be a system at the sub registrar level when the sale transaction is registered to get this process into action. The other thing is that credit for the tax deducted should be available to the seller. It should not be that the transaction is completed but when the other party goes to take the credit, he finds that there is a mismatch and hence, the entire process comes to a halt.

Happy Investing!!

We can help. Call 0 94 8300 8300 (India)

Leave your comment with mail ID and we will answer them

OR

You can write back to us at PrajnaCapital [at] Gmail [dot] Com

---------------------------------------------

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

1. ICICI Prudential Tax Plan Invest Online
2. HDFC TaxSaver Invest Online
3. DSP BlackRock Tax Saver Fund Invest Online
4. Reliance Tax Saver (ELSS) Fund Invest Online
5. Birla Sun Life Tax Relief '96 Invest Online
6. IDFC Tax Advantage (ELSS) Fund Invest Online
7. SBI Magnum Tax Gain Scheme 1993 Invest Online
8. Sundaram Tax Saver Invest Online
9. Edelweiss ELSS Invest Online

------------------

Best Performing Mutual Funds

1. Largecap Funds Invest Online
1. DSP BlackRock Top 100 Fund
2. ICICI Prudential Focused Blue Chip Fund
3. Birla Sun Life Front Line Equity Fund
2. Large and Midcap Funds Invest Online

1. ICICI Prudential Dynamic Plan
2. HDFC Top 200 Fund
3. UTI Dividend Yield Fund
2. Mid and SmallCap Funds Invest Online

1. Reliance Equity Opportunities Fund
2. DSP BlackRock Small & Midcap Fund
3. Sundaram Select Midcap
4. IDFC Premier Equity Fund
3. Small and MicroCap Funds Invest Online

1. DSP BlackRock MicroCap Fund
4. Sector Funds Invest Online

1. Reliance Banking Fund
2. Reliance Banking Fund
5. Tax Saver MutualFunds Invest Online
1. ICICI Prudential Tax Plan
2. HDFC Taxsaver
3. DSP BlackRock Tax Saver Fund
4. Reliance Tax Saver (ELSS) Fund
6. Gold Mutual Funds Invest Online

1. Relaince Gold Savings Fund
2. ICICI Prudential Regular Gold Savings Fund
3. HDFC Gold Fund

Start a Mutual Fund SIP in your child name

Invest In Tax Saving Mutual Funds Online

Download Tax Saving Mutual Fund Application Forms

Buy Gold Mutual Funds

Call 0 94 8300 8300 (India)

Recently, I happened to have attended the wedding of one of my client's daughter. On the day of the reception, when I went to his house to congratulate the family, the bride's father, my client, introduced me as the person who actually took care of the expenses of his daughter's wedding. It was a huge surprise to me until I discovered the reason: This client of mine had been with me for years. And from the very beginning of our relationship, when his daughter was still a school going kid, I had almost forced him to invest in equity-oriented schemes for securing his daughter's financial future. He had done that diligently and as a result he had enough funds to take care of the wedding expenses. After this phase of surprise, I was overwhelmed by a feeling of success and also a sense of satisfaction as a financial advisor.

Every child is special to his/her parents. As a financial advisor for nearly three decades, I have been professing a very serious approach to have a financial plan for every child. And what I advise my clients, I also practice myself – by having a long-term financial plan for my daughter. I remember opening a savings bank account for my daughter in 1990 when she was just a kid. The amount was Rs 2,000. Subsequently, I invested that money in a mutual fund scheme on her behalf.

In our society, there is a custom of gifting money to kids on various occasions like naming ceremony, birthdays, etc. All the money that she received as gifts went into that bank account first, and then from there into that fund. My idea was that over the next 20-25 years, a substantial sum will be accumulated in the scheme and when the time comes for her higher education, we could dip into the same. In case she doesn't need money for her higher education, then we will have some extra amount for her wedding, which should come in another few years after the time when she would need funds for her higher education. As per my expectations, when she got married recently, enough money had accumulated in that scheme.

Every parent should take this approach: All the money that a child gets during her childhood and growing up years should go into a bank account and then into some good scheme that can give superior return over the long run. The next step is to open a mutual fund systematic investment plan (SIP) and put at least Rs 1,000 every month. And this should start soon after the child is born. And the third plan of action is to take a term plan, which should take care of your child's financial needs in case of any unfortunate event. This three-pronged approach should be enough to secure your child's financial future.

Happy Investing!!

We can help. Call 0 94 8300 8300 (India)

Leave your comment with mail ID and we will answer them

OR

You can write back to us at PrajnaCapital [at] Gmail [dot] Com

---------------------------------------------

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

1. ICICI Prudential Tax Plan Invest Online
2. HDFC TaxSaver Invest Online
3. DSP BlackRock Tax Saver Fund Invest Online
4. Reliance Tax Saver (ELSS) Fund Invest Online
5. Birla Sun Life Tax Relief '96 Invest Online
6. IDFC Tax Advantage (ELSS) Fund Invest Online
7. SBI Magnum Tax Gain Scheme 1993 Invest Online
8. Sundaram Tax Saver Invest Online
9. Edelweiss ELSS Invest Online

------------------

Best Performing Mutual Funds

1. Largecap Funds Invest Online
1. DSP BlackRock Top 100 Fund
2. ICICI Prudential Focused Blue Chip Fund
3. Birla Sun Life Front Line Equity Fund
2. Large and Midcap Funds Invest Online

1. ICICI Prudential Dynamic Plan
2. HDFC Top 200 Fund
3. UTI Dividend Yield Fund
2. Mid and SmallCap Funds Invest Online

1. Reliance Equity Opportunities Fund
2. DSP BlackRock Small & Midcap Fund
3. Sundaram Select Midcap
4. IDFC Premier Equity Fund
3. Small and MicroCap Funds Invest Online

1. DSP BlackRock MicroCap Fund
4. Sector Funds Invest Online

1. Reliance Banking Fund
2. Reliance Banking Fund
5. Tax Saver MutualFunds Invest Online
1. ICICI Prudential Tax Plan
2. HDFC Taxsaver
3. DSP BlackRock Tax Saver Fund
4. Reliance Tax Saver (ELSS) Fund
6. Gold Mutual Funds Invest Online

1. Relaince Gold Savings Fund
2. ICICI Prudential Regular Gold Savings Fund
3. HDFC Gold Fund

Asset Allocation – Has no secret formula

Invest In Tax Saving Mutual Funds Online

Download Tax Saving Mutual Fund Application Forms

Buy Gold Mutual Funds

Call 0 94 8300 8300 (India)

 

A retired civil servant of my acquaintance called recently. An honest man, he didn't take money or favours while in service. His only major asset is his membership of a co- operative housing society. Now on the verge of 70, he is completely retired and lives in that co- op flat. It has multiplied in value and on paper, he is quite wealthy.   In practice, he is cash- poor and worried. His pension allows him to maintain his current life style but with little to spare. Inflation over the past three years has eroded the value of his pension and it will soon become inadequate. He is in decent health and could easily end up in poverty in extreme old age. If he sells the flat and moves to a cheaper place, he will generate some surplus cash. He must invest the surplus intelligently to beat inflation. One of his ex- colleagues had suggested that he park some of that in equity. He has never touched stocks. This was what he wanted to discuss. After some discussion, I told him the truth as I see it: "If you invest sensibly in the stock market, you will probably earn excellent returns over a 5- 7 year period or longer. You have to be braced to forget about the money for at least 3- 5 years. There is a small chance you will go bust. There is also asmall chance you will earn massive returns very quickly. You must be mentally prepared for those extremes. If you think youll live till 75- plus, without needing to touch the surplus funds, invest a proportion of your funds in stocks. If you dont want the stress, or the risk, invest in debt. Your money will lose value, but youll probably have enough to last out your lifespan." This is a classic problem from life cycle investing. The underlying assumptions are simple enough. Stocks are risky and volatile. But in the long run, they beat inflation and outscore other instruments. Debt is safe, but loses out to inflation in the long term. If you start a financial portfolio early in your career and hold it through retirement and beyond, your asset allocation should change to reflect your age and risk tolerance. In the early years, the portfolio should be heavily weighted in favour of equity. This gives a better chance of getting high returns without suffering from volatility. As you grow older, the equity component should decline and debt should play a larger role. One of the dangers for an elderly person holding a lot of equity exposure is that he or she may need to liquidate it for ready cash in the middle of a bear market. In that case, the savings may be wiped out by a temporary downturn. The life cycle investing concept looks logical in theory. In practice, it is a messy, "fuzzy" process deciding the ideal asset allocation levels. Different people have different risk tolerances and different aspirations. One size doesn't fit all where asset allocations are concerned. Nobody knows how long they will live and this is also important when fiddling with asset- allocation. If you switch over to debt too early, you may end up cash- poor in your last days. If you hold onto equity too long, you may be hit by emergency medical expenses and forced to accept capital losses. Average life- expectancy tells you little about personal life expectancy. Specifics like genetic make up and lifestyle play a big role. Life expectancy statistics are skewed downwards by infant and child mortality, and because young adults are more likely to die in accidents, or violent incidents. You may be very lucky if you started investing in 1991 or 2003 just before the market went into a long bull run. You may be unlucky as well. If you started investing in 1994, the equity returns would have disappointed until 1999. Again, there was a big bear market between 2000- 2005. Somebody intending to down shift equity allocations in that period would have had to bear losses, or defer his plans. Techniques like systematic investment plans can reduce the negative effect of such long term trends. But they don't mitigate those effects completely. Even in the very long- run, volatility has some effect on returns and that effect may be beneficial or negative. Life- cycle investors must also tackle a tricky set of problems when changing asset allocations. When you decide to increase or decrease equity exposure, should you do it at one shot? Or should you do it, systematically, reducing exposure a little, month by month? These are important details you must work out yourself depending on your personal risk tolerance.

Happy Investing!!

We can help. Call 0 94 8300 8300 (India)

Leave your comment with mail ID and we will answer them

OR

You can write back to us at PrajnaCapital [at] Gmail [dot] Com

---------------------------------------------

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

1. ICICI Prudential Tax Plan Invest Online
2. HDFC TaxSaver Invest Online
3. DSP BlackRock Tax Saver Fund Invest Online
4. Reliance Tax Saver (ELSS) Fund Invest Online
5. Birla Sun Life Tax Relief '96 Invest Online
6. IDFC Tax Advantage (ELSS) Fund Invest Online
7. SBI Magnum Tax Gain Scheme 1993 Invest Online
8. Sundaram Tax Saver Invest Online
9. Edelweiss ELSS Invest Online

------------------

Best Performing Mutual Funds

1. Largecap Funds Invest Online
1. DSP BlackRock Top 100 Fund
2. ICICI Prudential Focused Blue Chip Fund
3. Birla Sun Life Front Line Equity Fund
2. Large and Midcap Funds Invest Online

1. ICICI Prudential Dynamic Plan
2. HDFC Top 200 Fund
3. UTI Dividend Yield Fund
2. Mid and SmallCap Funds Invest Online

1. Reliance Equity Opportunities Fund
2. DSP BlackRock Small & Midcap Fund
3. Sundaram Select Midcap
4. IDFC Premier Equity Fund
3. Small and MicroCap Funds Invest Online

1. DSP BlackRock MicroCap Fund
4. Sector Funds Invest Online

1. Reliance Banking Fund
2. Reliance Banking Fund
5. Tax Saver MutualFunds Invest Online
1. ICICI Prudential Tax Plan
2. HDFC Taxsaver
3. DSP BlackRock Tax Saver Fund
4. Reliance Tax Saver (ELSS) Fund
6. Gold Mutual Funds Invest Online

1. Relaince Gold Savings Fund
2. ICICI Prudential Regular Gold Savings Fund
3. HDFC Gold Fund