Zebu blog

Tag: personal finance

  • What is the Risk-Reward Matrix?

    If you have seen the recent miniseries about one of India’s famous scammers, you would have come across this phrase: Risk hai to Ishq hai (Where there is a risk, there is love)

    Think about the times that you enjoy going on a long drive. When you started learning how to drive, it must have seemed risky and scary. But now that you are an experienced and good driver, you can enjoy the road to a great extent. All that risk you took seems to be worth it, right?
    The same is true for investment. Every investment has some level of risk. While you cannot prevent risk, you can reduce it by being financially savvy and recognising your risk tolerance.

    The same is true for investment. Every investment has some level of risk. While you cannot prevent risk, you can reduce it by being financially savvy and recognising your risk tolerance.

    So, if you want to achieve your goals, you must invest. But, if no investment is genuinely risk-free, how will you achieve your objectives? That’s a problem! But there is a workaround. You can increase your return potential by diversifying into the correct investments to help limit market volatility and keep your financial goals on track.

    Investment risk-reward matrix

    Every investor seeks an investment opportunity that will provide them with the highest possible profits as quickly as possible. But remember that it’s better to proceed slowly in the correct way than quickly in the wrong direction.

    And, as the saying goes, “all good things take time.” Similarly, investments take time to mature. In terms of investments, the risk-to-reward ratio is an important issue to consider.

    Consider you and your friend deciding to participate in the ‘dice throwing’ Instagram trend. In this game, your friend suggests that each of you contribute Rs. 500, for a total contribution of Rs. 1000. You will win the complete money if the dice is tossed and lands on an even number. Your friend stands to win if it is an odd number. The risk to reward ratio, in this case, is 1:1, as both of you have a 50% chance of winning the money you put in.

    It doesn’t sound like an attractive investment, does it? Assume you opted not to play.

    Your friend decides to up the stakes after hearing this. He modifies the game and recommends that if you contribute 500, he would place three times that amount, or 1500, for the same bargain.

    This sounds amazing, doesn’t it? You still have a half-chance of winning. If you win, he will receive Rs. 1500, which is three times your initial investment. As a result, the risk to reward ratio is 1:3.

    In technical terms, the risk to reward ratio is a valuable measure that helps gauge an investment’s profit (reward) relative to its potential loss (risk).

    We have already learned that each investment carries a certain level of risk. According to the industry, the greater the risk, the greater the reward.

    We’ll look at common assets and their risk-reward ratios to see what you may expect if you invest in them.

    Equity

    Shares and equities are the most volatile of all investments, making them the riskiest. However, it has the greatest potential for long-term profitability.

    Debt/bonds

    Debt securities are issued with the promise of interest payment. Because the risk is lower, the rewards achieved over time may not be as great as in the case of equities.

    Property investment

    The real estate market is volatile by nature. Key risks are determined by a variety of factors such as geography, demand, structural challenges, and a lack of liquidity. Based on all of these criteria, the risks associated with real estate investing are likely to be comparable to those associated with equities and bonds.

    Gold

    When it comes to gold investment risks, the expense of keeping and insuring the precious metal may be included. However, you can now invest in gold through Sovereign Gold Bonds (SGB), digital gold, gold ETFs, and gold mutual funds. Investing in gold provides diversification and a distinct blend of reward benefits. However, the risks associated with commodities such as gold are determined by market demand and supply.

    Varied assets will provide you with different growth rates. After reading about the various degrees of risk associated with each investment, you may be wondering, what if you just keep the money at home? Wouldn’t that imply no risk?

    Keeping cash at home, for example, may be dangerous. Alternatively, simply having money in a savings account exposes it to inflation. This means that the money will continue to lose value over time. And that’s an extra risk you’d be incurring. So, it is always better to invest.

  • 7 Investment stories from India that will inspire you to start investing today

    The majority of people invest their hard-earned money in the stock market. However, making money through stock market investing or trading is never easy. The stock market is extremely volatile, and your investments could be in danger. However, many people have become incredibly rich in the markets. What are some of India’s greatest successful stock market investment tales? Who are the Indian stock market investors who have amassed fortunes through investing and trading?

    #1 Rakesh Jhunjhunwala

    Rakesh Jhunjhunwala, dubbed the “Warren Buffet of India,” first entered the Indian stock market in 1985. He got his interest in stock trading from his father, who used to talk about it with his friends, and Rakesh would pay close attention. He enrolled in the Chartered Accountancy program and graduated in 1985 with a professional degree. He then joined the Stock Market and began trading. His first big hit was 5000 Tata Tea shares, which he bought for Rs 43 and sold for Rs 143 in less than three months. This provided him with Rs. 5 lakh, which was a significant sum at the time. Sesa Goa was his next big wager. He bought 4 lakh shares and made a fortune from them. There are a lot of stocks that earned big sums of money for him like Lupin, Crisil, etc.

    His portfolio is now valued at over Rs. 20,000 crores (3.2 billion dollars), with Titan, Lupin, and CRISIL as his top holdings. He is a well-known Indian stock market trader and investor known as the “Indian Warren Buffet.”

    #2 Porinju Veliyath – A member of the middle class who became the CEO of Equity Intelligence

    Porinju Veliyath was born in a lower-middle-class Kochi family in 1962. His early years were filled with difficulties. To support his family, he took on various jobs while also studying. In 1990, he moved to Mumbai in search of work. At Kotak Securities, he was hired as a floor trader. He had never worked in the stock market before. He quickly studied the ins and outs of the stock market and developed into an adept trader. He spent four years there and learned a great deal. He began working as a Research Analyst and Fund Manager for Parag Parikh Securities in 1994. In 1999, he returned to Kochi and started to invest in the stock market on his own. In ‘Geojit Financial Services,’ he made his first significant investment. At the time, the stock was trading at a relatively low price. This investment paid off handsomely, proving everyone wrong. He founded his own portfolio management service (PMS) firm, ‘Equity Intelligence,’ in 2002. He is currently one of the most well-known investors and fund managers in modern history. Stock picks from Equity Intelligence such as Emkay Global Financial Services and BCL Industries have increased by 200 percent, while IZMO and Vista Pharma have increased by 100 percent.

    #3 Vijay Kedia – Vijay Kedia is a successful investor who comes from a family of stockbrokers.

    Vijay Kedia was born into a family of stockbrokers and began his career in the stock market in 1978 out of necessity after his father died. So, in order to provide for his family, he joined the family trading and stock-broking business. He wasn’t performing well at first. He did not give up hope, though, and read about successful investors. He made the decision to invest. He started learning about business concepts. He had Rs 35,000 at the time, and according to his research, he invested it all in a stock called Punjab Tractor. The stock increased sixfold in three years, and his Rs 35,000 became Rs 2.1 lakhs. Following that, he made an Rs. 300 investment in ACC. After a year, the stock had grown tenfold and was worth Rs. 3,000. He proceeded to make profitable stock investments, amassing a fortune of 500 crores. His most important success mantra is “information to locate quality stocks, which can only be obtained by reading.” He cannot be a competent investor if he does not read often.’

    #4 Nemish Shah – One of the top ten retail investors in the world.

    Mr. Nemish Shah is the co-founder of ENAM, one of the most well-known and respected investment firms. He is a very simple man who avoids the media and public attention. His investment strategies are smart and in high demand. In three years, he invested in Asahi India and saw his money grow by 3.4 times. He does not invest in a large number of stocks, preferring to focus on a small number of firms that are very sector-driven. With a net worth of Rs 1,300 crore, he is one of India’s top ten retail investors.

    #5 Ramesh Damani — A well-known Indian investor

    Ramesh Dhamani is well-known for his investments in both publicly traded and privately held businesses. He is known for selecting high-quality equities and holding them for long periods of time. He invests in companies with solid management credentials and processes, following Warren Buffet’s philosophy. In his career, he accomplished a lot of good things that earned him millions of rupees.

    #6 Motilal Oswal Group Founder Raamdeo Agrawal

    Raamdeo Agrawal is the MD and co-founder of Motilal Oswal Financial Services and a founding member of the Motilal Oswal Group. He began buying stocks in 1980 and amassed a portfolio of around Rs. 10 crores by 1994. Then he read Warren Buffet’s advice and worked on his portfolio to select quality stocks rather than acquiring bad ones. His investment portfolio increased in a year. He has a net worth of more than Rs. 6,500 crores (1 billion USD).

    #7 Dolly Khanna, is an Indian value investor.

    Dolly Khanna, a value investor located in Chennai, has been trading in Indian stocks since 1996. Rajiv Khanna, her husband, manages her investments. She made her debut in the fertiliser industry, focusing on a high-quality small-cap business with a monopolistic position. She has an uncanny ability to recognise multi-bagger stocks and knows when to take profits. Her portfolio includes Emkay Global Financials, PPAP Automotives, IFB Industries, and Thirumalai Chemicals.

    Finally, we’d like to state that there is no academic degree in the world that can guarantee you success in the stock market. In the end, it is the experience that teaches you.

  • For The Most Beginner Investors, Here Are 5 Aspects You Should Be Mindful Of

    Investing is the most important way to build wealth and you don’t need to be an expert in the share market to be profitable. If you are unsure of how to choose the right stocks, you can always hand over the burden to the experts and simply invest in mutual funds. If you stay invested even for 20 years with an approximate return of 12% per annum, you can not only beat inflation but also create an immense amount of wealth. If you are just starting out on your first job, invest as much as you can spare and keep increasing the amount with every hike that you get. Here are 5 important aspects you should know before starting your investment journey.

    Risk and Return

    When it comes to investing, Risk and Return are closely linked. The larger the risk, the higher the possible return. You should never chase high-return investments on a whim. Consider your investing aim, time horizon, and risk tolerance. Always invest in something that is right for you.

    Diversification of risks

    Any investment entails some level of risk. You can’t prevent it, but you can limit the odds of big losses by managing your risk exposure with the correct strategy. Diversifying your investments and spreading your risk is the simplest and most effective method. Diversifying your investments across asset types, such as equities, bonds, and savings, is a good way to go.

    Consistency

    By committing to a consistent schedule for investing, say monthly, you can limit the risks of loss due to sharp moves on either side. Identify quality stocks and invest in them every month for good, long-term returns. ,b>Compound Interest Because the interest generated grows your principal (the money you put in), you obtain a bigger return. It’s a snowball effect: the longer you invest, the more compound interest benefits you. As a result, it is critical to begin saving and investing as soon as possible.

    Inflation> Inflation has been a constant in Hong Kong for the past few decades. Your investment must have a return rate that is equal to or greater than inflation. If you don’t, your money will lose value.

  • You Need An Imaginary “Third Child” To Prepare For Retirement

    Knowing how much it costs to raise a child and how much joy it brings isn’t always easy to compare, but it’s smart to know and plan for these costs. In general, it costs a lot to raise a child, from the time it is born to when it goes off on its own. It costs between 1.5 and 2 crores. When you think about how much it costs to raise a child now, having two kids makes sense.

    At different points in a child’s life, there are some costs that need to be paid. These are some of them. In light of the current trends, these costs are based on averages.

    Trading or investing can be a difficult journey without the right tools. That’s why you need the best Indian trading platform with a wide range of features. With Zebu, one of the best stock brokers in the country, your online stock trading journey will be drastically enhanced.


    Expenses at different stages of life

    There is a lot of money spent on medicines and vaccines in the first year after the birth of a child in urban and semi-urban areas. A playgroup or creche costs a lot of money when a child turns two. This could cost anywhere from 50,000 to 1 lakh, depending on how many amenities the creche has to offer. In the early years of a child’s life, the cost of toys and clothes is big because they tend to grow out of them.

    School expenses: Based on recent trends, it looks like more than half the population of parents spend more than half their annual income to pay for their children’s education and hobbies. There are times when parents have trouble making ends meet because the cost of school has gone up. A good school charges a fee of 50,000 to 2 lakh for the whole year. Expenses for the 12 years from classes I to XII would be between 11 lakh and 43 lakh if annual education costs rose by 10% each year. In addition to any tuition or extra-curricular activities that the child will be paying for, this fee will be added on as well.

    Higher studies: Suppose that the average cost of going to school for engineering is about 10 lakh today. In about 15 years, the same thing would cost 40 lakh to 50 lakh, too. The same thing goes for medical degrees. If they cost 25 lakh now, it’s a safe bet that they will cost more than 1 crore in the next 15 years. Even though parents can take out loans to pay for their kids to go to school, the interest rate is still high, even after tax breaks.

    Besides paying for their kids’ education, a family might have to spend money to make their home more private for their grown-up kids. Entertainment costs have also gone up a lot, especially in cities. There are birthday parties to plan, birthday gifts to buy, school cultural events, gadgets, hobbies to keep track of, and so much more to think about.

    In light of the above outflows, it is important for parents to plan their finances so that they don’t spend more than they need to and aren’t able to save for their own retirement. There are also safety nets that need to be put in place, like getting enough insurance and setting up an emergency fund.

    To make sure that you have a retirement fund, you can assume that you have a third child and every time you spend on your first two children, you can invest the same amount for the imaginary third child and invest it in a mutual fund. With a return of around 12-15% per annum, you will be left with a substantial corpus. You can use this as your retirement fund and can enjoy your golden years with enough funds.

  • Are You A DIY Investor? Here Are The Mistakes That You Should Avoid At All Costs

    Despite the fact that many institutional investors exited the market during the early stages of the epidemic, retail investors flooded in and gained handsomely, particularly in booming technology companies. Playing the market, of course, involves some risk. During the stock market’s unrelenting rally, reports of novices making rookie blunders and seasoned investors falling short came out.

    Before you start investing or trading, always consider going with one of the best brokerage firms in the country like Zebu. As a top broker in share marketwe have created one of the best stock trading platforms for you to use and invest.

    Here are six investing blunders you should avoid:

    1. Being in a Love-Hate Relationship With a Stock

    It’s all too easy to fall in love with a stock we’ve invested in and forget why we bought it in the first place when we see it do well. Always remember that you purchased this stock in order to profit from it. If any of the fundamentals that prompted you to invest in the company change, you should consider selling the stock.

    2. A Lack of Patience

    If you gradually and steadily build your portfolio, your long-term returns will be higher. Expecting a portfolio to do something it wasn’t designed to accomplish is a recipe for disaster. This implies you’ll need to keep your portfolio growth and return goals in check, as well as having a realistic time horizon in mind.

    3. Concerns About Investing

    One of the world’s most powerful investors, Warren Buffett, recommends against investing in companies whose business strategies you don’t understand. The safest method to avoid this is to invest in a diverse portfolio of exchange-traded funds (ETFs) or mutual funds. If you opt to invest in specific stocks on your own, be sure you have a thorough understanding of the firm.

    4. Entering without a strategy

    Going through with investments without considering issues such as one’s financial goals, risk appetite, or investing time horizon is not recommended. These are key considerations to address before beginning your financial adventure. As a result, it’s critical to keep track of these aspects, perform the appropriate back calculations, and ensure that one’s portfolio is on track to accomplish those objectives. It is suggested that you seek the advice of a financial advisor in this regard.

    5. Attempting to Forecast the Market

    If you don’t have the proper information, attempting to time the market might have a negative impact on your returns. It’s extremely difficult to time the stock market perfectly, and there are numerous biases at play while attempting to do so. Even institutional investors have difficulty precisely predicting this. Other approaches, such as SIPs, are therefore recommended for averaging out one’s investment over time. Furthermore, it is critical to allow your assets to compound and let the force of compounding to work its magic.

    6. Waiting for a Break-Even Situation

    Getting even is another approach to ensure that any profit you’ve made is wiped out. It suggests you’re delaying selling a loser until its original cost base is reached. In behavioural finance, this is referred regarded as a “cognitive malfunction.” When investors fail to recognize a loss, they lose in two ways. To begin with, they don’t want to sell a loss since it will continue to devalue until it is no longer worth anything. Second, there’s the lost opportunity cost of not putting those funds to greater use.

    Coming to a close…
    Making mistakes is unavoidable in the world of DIY investing. Knowing what they are, what you’re doing to make them, and how to stop them will help you succeed with your investments. Make a well-thought-out, planned stock market guidance strategy and stick to it to avoid making the blunders described above. It is advisable to avoid DIY without understanding and seek the advice of a financial counselor to fulfill one’s financial goals, just as one would not self-diagnose an illness and go to a doctor.

    As one of the top brokers in share market, we have created the best stock trading platforms for you to invest in wisely. Our tool is designed to help investors and traders alike to analyse a company with a wide range of indicators and screeners as per your strategy. As one of the best brokerage firms in the country, we invite you to open a trading and investment account with us.

  • 7 Things To Do At The Start Of Every Financial Year

    While it is natural for us to feel less bothered at the start of the financial year, reviewing your finances is an exercise you can conduct in April to ensure the remainder of the year is similarly stress-free. This analysis will help you in determining how well you handle your finances in the previous year and where you stand now. It will also assist you in taking the necessary actions to manage your finances properly in the short and long run.

    In this article, we’ll go over seven crucial things that should be included in your yearly start-of-financial-year assessment, as well as how to go about doing it. But before we get into that you need to understand that investment is also about choosing the right technologies. As one of the top brokers in share market, we at Zebu offer trading accounts with lowest brokerage, and an online trading platform to help you focus only on executing your strategies efficiently.

    1. Review your asset allocation and, if necessary, rebalance

    The first step toward improved money management is to analyse your portfolio across multiple asset classes and rebalance if your asset allocation has changed significantly.

    Assume you started the year with a 70% allocation to equities, a 25% allocation to debt, and a 5% allocation to gold. Equities are up roughly 21% in FY22, debt is up 5.5%, and gold is up 15.4%. As a result, your portfolio is slightly more biased towards equity, with shares accounting for approximately 72.5% of your portfolio, 22.6% for debt, and 4.9% for gold.

    To get back to your original asset allocation, you’ll need to rebalance your portfolio. Because your equity allocation has increased, you will need to register profits in equities and reinvest the proceeds in Debt and Gold in this case. Alternately, you might restructure your monthly SIPs to include more Debt and Gold.

    This activity guarantees that your portfolio’s risk is balanced, allowing you to better manage drawdowns.

    2. Examine Your Objectives

    The beginning of the fiscal year is an excellent opportunity to assess your progress toward your objectives. It’s likely that the amount you’ll need has risen more than you expected when calculating the amount you’ll need. If you were planning to buy a car, for example, excessive input costs may have caused prices to rise above average. In this case, you’ll need to recalculate how much you’ll need to invest each month in order to have the money you’ll need when the time comes.

    3. Evaluate Your Portfolio

    While long-term investing is essential for wealth accumulation, this does not mean you should invest and forget. A portfolio review should be done on a regular basis, and the beginning of the financial year is an ideal time to do so.

    A review will show you which funds have outperformed, which have performed as expected, and which have underperformed. While it’s tempting to get rid of laggards, you should be cautious about how you go about doing so.

    You should ideally only evaluate funds that have been underperforming for a long period (say at least 1.5 years). If the entire segment has fallen, a fund with negative returns may not be underperforming. As a result, you must compare the fund’s performance to that of the category as a whole. For example, if the fund has declined but not as much as the category average, you may choose to continue with it due to its stronger downside protection qualities.

    When your goals change, it’s also a good idea to review your portfolio. For example, when you were 10 to 15 years away from retirement, you began investing in an Equity Fund. However, you’ve nearly reached your goal amount and are only two years away from retiring. In this case, you’ll need to devote a larger portion of your collected wealth to fixed-income investments.

    4. Examine Your Life Insurance Requirements

    Your obligations expand dramatically after major life events such as marriage, becoming a parent, purchasing a home, and so on. You must ensure that your life insurance policy is adequate to meet all of these new duties.

    So go back to the calculations you used to determine the correct coverage for yourself, add the amount you’ll need to cover the additional duties and get any additional coverage you require.

    Remember that your coverage should be sufficient to give a monthly income to your dependents, pay off any debts, and leave money aside for future one-time large needs such as your children’s education.

    5. Look over your health insurance policy

    Major life events such as marriage and becoming a parent requires a review of your health insurance coverage.

    If you purchased a policy before getting married, you most likely purchased an individual policy with an adequate quantity of coverage. With more family members, you’ll need not simply a larger policy, but you’ll also want to be sure they’re protected. Converting your health insurance policy to a family floater and boosting the coverage is the simplest way to accomplish this. This ensures that the coverage remains in effect and that you do not miss out on any advantages.

    6. Begin Your Tax Preparation

    It’s ideal to begin tax preparation early in the fiscal year. That’s because you’ll have enough time to figure out how much you’ll need to invest to save the most money on taxes and weigh all of your possibilities. Furthermore, because you have the entire year to invest the funds, you can spread them out.

    If you plan to invest in market-linked products like ELSS and NPS, tax planning at the start of the year is even more important. Having a SIP that helps you save tax throughout the course of the year ensures that you benefit from market ups and downs. If you wait until the last minute, though, you will be forced to invest even if the markets are at an all-time high and there is a chance that they will fall. Furthermore, the money you will invest will be substantial.

    7. Increase the amount of money you put aside each month

    With an increase in your salary, you should increase your SIP investment by 10% per year. This will assist you in achieving your financial objectives more quickly. Other investment options include the National Pension System (NPS), which provides an extra Rs. 50,000 deductions in addition to the Rs. 1.5 lakh deduction provided under Section 80C. You can register a Sukanya Samriddhi Yojana account for your daughter if she is under the age of 11. This plan will give you a better return than the PPF or other small savings plans.

    These methods will assist you in improving your financial situation and ensuring a smooth financial journey in the future.

  • The What, How and Why of SIPs

    SIPs are simply the way in which you plan your investments. You can start investing little sums, one instalment at a time, over a period of years with the help of a SIP investment and develop your wealth.

    Compounding is at work here, and if you keep investing for a long time, it will pay off handsomely. It is the amount of time you spend investing that matters, and not when you start investing.

    When it comes to starting investments today, the first two things that come to mind are mutual fund investments and systematic investment plans (SIPs). Mutual funds can help you not only build wealth but also save money and achieve financial independence. SIP investments, like mutual fund investments, are becoming increasingly popular.

    SIP allows you to buy mutual fund units at your convenience and within your budget. To minimise any last-minute payment inconsistencies, investors usually strive to maintain the SIP debit date close to the salary date. The money is automatically deducted from your bank account based on the bank’s standing instructions. It also helps in the formation of financial discipline in investors.

    However if you consider investing or trading in share market, we at Zebu a share trading company offer the lowest brokerage for intraday trading and are one of top brokers in share market.

    How Do You Begin SIP Investing?

    You can purchase mutual funds directly from direct fund companies, either online or offline, or both. Depending on your option, you can open a SIP account by visiting your nearest bank or by going online. The funds can be purchased in a flat sum or over time through a systematic investment plan (SIP). Agents can also assist you in purchasing mutual funds. To begin trading, all you need to do is open a trading account and complete the mandatory KYC. And we at Zebu are here to help you with that. Please get in touch with us to know more about investing in SIPs and how you can build your wealth.

    How Do You Pick the Best Mutual Fund?

    There are so many investment options available today that deciding which one is best for you can be incredibly challenging.

    The various mutual fund plans are further classified as equity, debt, or hybrid funds. The mutual fund you’ve chosen should be a good fit for your long-term objectives. If your objective is to retire early, for example, you should choose a fund that will help you increase your money in the shortest amount of time. Make it a point to look at the fund’s long-term record, the fund manager’s performance, and the expense ratio. All of this information can be found on the fund’s website.

    Which Option Should You Pick?

    Almost all of the funds available these days provide you with the option of choosing between two options: dividend or growth. If you choose the dividend fund option, you will be paid on a regular basis according to the fund’s due date.

    The growth option, on the other hand, allows you to reinvest your dividends, resulting in higher returns and a higher net asset value. Depending on your needs and preferences, you can select one of the two possibilities.

    Which should you choose: Direct or Regular?

    Almost every fund on the market today has two options: direct or regular. There are no intermediaries in the direct one because it is sold straight by the fund houses. The traditional one has agents and mediators in the middle, resulting in a greater expense ratio and lesser profits. Direct funds are a superior option if you’re seeking long-term investment options.

    What should the quantity of investment be?

    The biggest advantage of SIP investing is that you can invest any amount you like, even as little as INR500 every month. Minimum values vary depending on the scheme. You can use a SIP calculator to figure out how much to invest in order to get the desired end result.

    For example, if you require Rs 1 crore in the next 20 years, you should invest INR.10000 every month in a scheme that will provide you with 12% annual returns.

    Returns

    All of the funds’ returns are calculated according to the specified dates, and they are also available on the fund’s website. Take your time to learn about the fund’s short and long-term returns to gain a clear picture of its performance.

    Risks

    There’s an old adage that great risks lead to great rewards. SIP investments work in a similar way. You can easily earn some decent profits if you are ready to take chances. The returns are primarily determined by the market’s volatility and how it operates.

    The equity funds are invested in stocks, and the returns are entirely contingent on the stock’s market success. Debt funds are low-risk investments that often invest in government bonds and treasury bills, among other things. However, due to the microeconomics involved, even these cannot be considered risk-free.

    Tax

    When you try to redeem your investment after the fund’s duration has ended, the units you invested are redeemed on a first-in, first-out basis. The units you bought, in the beginning, will be redeemed first, followed by the units you bought afterwards.

    Long-term capital gains tax exemption is available for equity funds that are considered long-term investments. If you opt to redeem stock units before the one-year period is through, you will be subject to a 14.5 per cent short-term capital gain tax. For an amount up to Rs 10 lakh each year, equity returns are tax-free.

    Debt fund investments are only deemed long-term investments until they have been successfully completed for three years, at which point you will be eligible for tax benefits. This money is taxed at a 38.45 per cent rate.

    How do you keep track of your SIP?

    SIPs, like any other investment, must be tracked. You just cannot leave them unattended, despite the fact that they are considered safe and reliable. The performance of mutual funds can be tracked using their statements. If you notice any discrepancies and the fund’s performance falls short of your expectations, you can switch it at any time or redeem the units you deposited.

    As we mentioned earlier if you are planning to invest or trade, we at Zebu a share trading company offer the lowest brokerage for intraday trading and are one of top brokers in share market.

  • Women’s Day Post – Here’s Why Every Woman Should Start Investing Today

    Although times have changed dramatically, women still do not enjoy a significant financial advantage at home. While the widespread notion is that women are unable to invest, women themselves are unsure about their financial capabilities.

    They are unquestionably better at saving, but they lack passion for investing due to a lack of knowledge. Every housewife, sister, mother, and daughter should try to learn about investment.

    Before you start investing, it is important that you do so with one of the best share brokers in the country. At Zebu, we have the lowest brokerage for investments and also support you with a highly advanced online trading platform to help you analyse stocks and execute your trades.

    In comparison to men, here are four reasons why they would make good investors.

    1. More reliable return-givers

    Did you know that women’s investment portfolios produce higher returns than men’s? It’s not just us that believe this; studies back us up. For example, according to a poll conducted by ET Money in March 2021, women investors achieved higher returns than males every year from 2017 to 2020. In fact, during the pandemic in 2020, they generated 14 percent of the returns, compared to only 11 percent for men. Even in the United States and the United Kingdom, women have outperformed men. According to Fidelity’s 2021 Women and Investing Study, women’s returns in the US were 40 basis points greater than men’s between 2011 and 2020.

    2. Investing skills that come naturally

    Behavioral and psychological characteristics can also play a role. Women are less risk-averse, trade less frequently, research more thoroughly, are more disciplined, and are less overconfident than their male counterparts. As a result, they tread carefully, investing more in mutual funds than stocks; they stay invested for the long term without frequent transactions and changes; and they are disciplined in their asset allocations, making no rash decisions or knee-jerk reactions. From 1991 to 1997, the University of California-Berkley looked at the common stock investments of approximately 35,000 households. Males traded 45 percent more frequently than women, yet women outperformed men by 0.94 percent per year, according to the study.

    3. There’s a better chance you’ll make it to the finish line.

    Women invest with a long-term perspective as well as an outcome-based strategy. This means that, because they are focused on the financial goal rather than the excitement of investing, they invest in a way that allows them to meet their objectives within the time frame they have set.

    4. Financial empowerment

    One of the most compelling reasons for women to begin investing is that it will enable them to become more active in and aware of their household’s financial affairs. Women would not feel adrift owing to their ignorance or be compelled to rely on others for financial guidance in the event of the death or crippling sickness of their spouse, father, brother, son, or any other male figure they are dependent on. Financial literacy and awareness help her and her children secure their financial destinies without being deceived or in debt to others.

    Two of the most important checklists for first-time investors are the right online trading platform and the lowest brokerage for investments. As one of the best share brokers in the country, we at Zebu will give you all of this and more. To know more about our services and products, please get in touch with us now.

  • The Best Books to Read On Personal Finance

    Large Cap vs Mid Cap vs Small Cap: Key Differences That Actually Matter

    Personal finance books can help you get started with money management more effectively. At the most fundamental level, you can learn personal finance fundamentals, such as why paying yourself first pays off or how to manage and pay off debt, to become smarter and more confident with your money. However, it does not end there. They can also teach you how to invest, manage a mortgage, build a nest egg, save for retirement, and ultimately assist you in avoiding common money pitfalls in order to foster a healthy relationship with your money. It’s not easy reading, but your wallet and future self will thank you. Before we begin… When you take full responsibility for your financial future, it helps to be supported by one of the top brokers in share market. Zebu is one of the fastest-growing platforms in the country for trading and investing and we have a team that would love to help you out with your financial objectives. We have Zebull, the best online trading platform with a host of features, and one of the lowest brokerage fees for intraday trading. Here are our recommendations for the best personal finance books. Why Didn’t They Teach Me This in School? If you ask anyone what they wish they had learned more about in school, the answer is almost certainly money. More specifically, how to properly manage one’s finances—hence the title of Cary Siegel’s book, “Why Didn’t They Teach Me This in School?” Siegel, a retired business executive, divides the book into 99 principles and eight financial lessons that you should have learned by high school or college but didn’t. When he realised his five children weren’t learning important personal finance principles before entering the real world, he wrote this book for them, but it grew into a well-reviewed read full of important financial lessons with Siegel’s first hand experiences as well. This simple book is ideal for recent graduates or anyone looking to begin their personal finance journey on the right foot. Rich Dad Poor Dad You’ve probably heard of Robert Kiyosaki’s book “Rich Dad, Poor Dad,” but there’s a reason it’s been around for over two decades. Kiyosaki shares what he learned growing up from his father and a friend’s father, the latter of whom is referred to as the “rich dad” in the title, in one of the most popular personal finance books of all time. These lessons cover topics such as how you don’t need a lot of money to get rich, assets and liabilities, and why schools won’t teach your children what they need to know about personal finance. This 20th anniversary edition includes an author update on money, the economy, and investing. The Total Money Makeover Debt management is critical to the health of your personal finances. Do you require assistance in this area? Examine Dave Ramsey’s “The Total Money Makeover.” This New York Times bestseller explains, without equivocation, how to get out of debt and improve your financial situation by avoiding common pitfalls such as rent-to-own, cash advances, and credit. It also provides sound advice on how to start an emergency fund, save for college and retirement, and use Ramsey’s famous “Snowball Method” to pay off debt. The Automatic Millionaire Who wouldn’t like to be a millionaire? The New York Times, USA Today, Bloomberg Businessweek, and Wall Street Journal business bestseller “The Automatic Millionaire” by David Bach teaches you how to do just that. The book begins with the storey of a couple who earns a combined $55,000 per year and how they achieved their financial goals. Consider this: owning two homes, paying for their children’s college, and retiring at 55 with a $1 million retirement nest egg. What is the secret? Creating a financial system that not only pays yourself first, but also does so automatically. Broke Millennial This is the personal finance book for you if you can decipher #GYFLT. (Hint: in social media speak, #GYFLT stands for “get your financial life together.”) In her signature conversational style, Erin Lowry’s “Broke Millennial” explains how 20-somethings can take control of their personal finances. This book covers the most pressing financial issues confronting millennials today, from understanding your relationship with money to managing student loans to sharing financial details with a partner. The One-Page Financial Plan Confused about your money, whether it’s how to invest properly or how to deal with unexpected financial challenges? “The One-Page Financial Plan” by Carl Richards removes the mystery of effectively managing your finances. This book not only helps you figure out what your financial goals are but also shows you how to get there in a simple, one-page plan. The author is a Certified Financial Planner as well as a New York Times columnist. I Will Teach You to Be Rich Financial expert Ramit Sethi explains in “I Will Teach You to Be Rich,” a New York Times and Wall Street Journal best-seller, that you can spend your money guilt-free as long as it is invested and allocated properly. This title discusses how to avoid common financial pitfalls, such as paying off student loans, saving money on a monthly basis, and even negotiating your way out of late fees. This tenth-anniversary edition includes new perspectives on technology, money, and psychology, as well as success stories from readers who have made a fortune after reading—you guessed it—book. Sethi’s Clever Girl Finance According to the US Department of Labor, women still earn $0.82 for every dollar earned by men, while mothers earn $0.71 for every dollar earned by fathers. In short, when it comes to money, women still have to work harder. Bola Sokunbi’s “Clever Girl Finance” aims to empower and educate a new generation of women on topics such as budgeting, creating and sticking to a budget, managing credit, saving for retirement, and taking responsibility for your own financial well-being. The Psychology of Money This book is an intriguing look at the psychology of money and how your ego, preconceived notions, and even your pride can influence your financial decisions. As you might expect, this isn’t the best way to manage your investment portfolio, and Morgan Housel’s “The Psychology of Money” provides readers with tips and tools for combating these biases in the form of 19 short stories that all focus on the same topic. Housel is a partner at The Collaborative Fund and a former Wall Street Journal columnist. Your Money or Your Life Vicki Robin’s book has sold over a million copies details a nine-step plan to help readers change their relationship with money. This book will teach you how to get out of debt, start investing, build wealth, and even save money by using Robin’s signature mindfulness technique. Accounting Books You Should Read The Final Word Whether you’re new to finances or simply want more financial advice, “Why Didn’t They Teach Me This In School?” by Cary Siegel is the best overall personal finance book (view at Amazon). It teaches eight important money lessons that you should have learned by high school, as well as a whopping 99 principles for saving, investing, and building wealth. While you take charge of your personal finances, we at Zebu, one of the top brokers in share market, are here to assist you with everything. From helping you understand different asset classes and how you can benefit from them, Zebu supports you with Zebull, a superb online trading platform and the lowest brokerage for intraday trading. Please get in touch with us to know more about our products and services.

  • Signs That You Need To Change Your Mutual Funds Scheme

    You conduct research, select a mutual fund plan that meets your aims, budget, perform all kinds of analysis, and then invest in a mutual fund scheme. Then, when the investment period comes to a close, you can reap the rewards of capital growth. It is as simple as that, right?

    Not always. Investing in a mutual fund entails more than just putting money into it and waiting for it to pay off at the end of the investment term. To truly enjoy its full benefits, more effort is required from your end to constantly monitor and analyse various parameters of your portfolio. To achieve optimal capital growth, you must keep a careful eye on it and manage it well during the investing period. Sometimes, switching between funds is necessary to avoid market risks, avoid fund underperformance, and avoid fund performance stagnation.

    Signs that you need to change your mutual find scheme

    Change in investment goals

    Before you begin investing in mutual funds, you must first devise a strategy that is tailored to your specific objectives, risk appetite, investment horizon, budget, and other objectives. The type of mutual fund schemes you should invest in is determined by these criteria. Mutual fund investments can be divided into three categories based on their investment horizon: short, long, and intermediate. Risk appetites are divided into three categories: aggressive, moderate, and conservative. It is important to keep your expectations in check in terms of the kind of profits do you hope to get from your mutual fund investment. In this instance, mutual fund schemes might be classified as income-oriented, balanced, or growth-oriented.

    When investing in a mutual fund scheme, you may have had a certain goal in mind. But what happens if your goal shifts in the middle of the project? You can switch between funds in this situation to suit your new investing goal, horizon, and risk tolerance.

    On a side note, one of the first things to keep in mind when it comes to investing in mutual funds is to identify the top brokers in share market . Zebu is a leading online share broker that offers one of the lowest brokerage fees when it comes to investing in mutual funds. Read on to know more about when to change your mutual fund plans.

    Your scheme is underperforming

    There’s no guarantee that the mutual fund scheme in which you invested will perform well over time. You may have analysed prior fund performance and tried every permutation and combination to find the right mutual fund investment for you. Despite your best efforts, you never know when your scheme will underperform or become vulnerable to hazards, even in favourable market conditions. To ensure that your portfolio does not become stagnant, you must switch to a different fund. To keep the portfolio balanced, over-weight mutual funds should be rotated.

    You simply feel like you made the wrong choice

    When it comes to even the safest investment options, mistakes are bound to occur (especially if you are doing the research by yourself). Fortunately, investing in mutual funds is not one of them. Worry not if you bought in a mutual fund without doing your homework or understanding key technical features, only to discover later that it isn’t a good fit for your goals or risk tolerance. Your current assets can easily be reallocated into a portfolio that matches your needs.

    In the world of mutual fund investing, erroneous predictions are more common than you would think. Sometimes, even seasoned fund managers can get their analysis proved wrong. For these reasons and more, it is crucial that you keep a close eye on your mutual funds and keep your options open and diverse. Apart from this, to maintain balance and enhance fund performance, an investor should rotate the assets in his or her portfolio on a regular basis.

    With Zebu’s seamless investment platform, which is one of the top brokers in share market, you can get started with direct mutual funds and make more than 1% of the returns you would otherwise make with managed mutual funds. And with our lowest brokerage fees, you can confidently make changes to your scheme as per your requirements. We are, in fact, one of India’s leading online sharebrokers.

    To know more, please get in touch with us now.