8th November 2016 was a very important date for India. A surprise decision by Mr Modi rocked the life of 1.2 billion Indians across the nation. Much about that has already been discussed in every medium possible, India and abroad. Interestingly, there was one particular outcome of the monetary shock - it peaked the interest of Indian investors in debt mutual funds of all kinds. For a variery of reasons, deposit rates, which were already in a declining pattern, suddenly spiked down causing an alarming sense of uneasiness among the fixed deposit investors to look for better avenues outside their safe and secure bank deposits.
This is when a lot on money started flowing into GILT (Government bonds) funds and dynamic bond funds. Pitching the idea of investing in government backed safe securities that gave astounding returns in the few weeks post demonetization, a whole of lot of advisors and fund houses pulled the attention of investors to GILT and Dynamic bond...
The stock markets are at an all-time high. Why? The market pundits will attribute it to expectations of a good monsoon, favourable political shifts, GST implementation, and so on. The truth is - this rationalisation always comes as an afterthought depending on whether the markets are high or low.
If we were at an all time low instead, the media would be talking about a possible border dispute, relatively delayed and complex GST, low corporate earnings and the possibility of Donald Trump starting a World War III.
It's always too difficult to follow these changing dynamics and make sense of them. But there is one undeniable fact that cannot be refuted - Earnings.
Price to Earnings (PE) Ratio - A simple way to understand how costly or cheap stocks are.
We know how fixed deposits work right? You give the bank 100 rupees, you get back 4 rupees every year. Basically, that translates to a yield of 4%. Higher the yield, the better. Simple.
While stocks are relatively...
Thanks to the immense amount of marketing, advertisement and the performance of the category over the last 2 decades, mutual funds aren’t an alien concept even to a young 20-year-old something, just graduating out of college. India is one of the youngest demographics in the world, and mutual funds as a category are only beginning to etch their presence in the savings and investment landscape.
However, for a majority of individuals, Mutual funds somehow are synonymous with Equity Mutual funds, which is like saying Chocolate bars are the same as Cadbury (which was pretty much the case until two decades ago).
Mutual Funds only refer to the ecosystem of individuals handing over their small savings to professionals who in turn manage crores of rupees to generate better returns for their clients, given the objective of Investment.
Once the objective is established (high growth, capital protection, etc), one moves to picking the specific category of funds (Diversified Equity,...