The Finance Minister presented the final budget for FY2019-2020 on July 5, 2019. Here are the key highlights of the budget. Income Tax slabs unchanged; Surcharge increased for the rich There has been no change in the income tax slabs. There is a sharp increase in surcharge for those earning more than Rs 2 crores. We must understand the impact of the surcharge … [Read more...] about Final Budget 2019: Taxes for the Rich, Benefits for Buyers of Homes, Electric Vehicles
SEBI, in June 2019, made a few changes to investment guidelines and valuation of securities in debt mutual funds. These changes enhance credit and liquidity profile of the liquid funds. At the same time, these changes can make liquid funds a bit volatile. Let’s try to understand the new SEBI rules. #1 Liquid funds are now required to hold 20% in liquid … [Read more...] about Liquid Funds to have exit load and will now be a bit volatile
Debt mutual funds are again in the news. On June 4, 2019, DHFL could not make the interest payment on one of its bonds. It says that it will pay in another week. Does not matter. Even the slightest delay is considered a default. As per extant rules, even if a default happens in one security by DHFL (not the one held by the fund scheme), the value of the all the bonds from … [Read more...] about The DHFL Mess: Learnings and What should you do?
When we plan for a goal, we assume a rate of return on investments for the goal and plan investments accordingly. Picking up the long-term average return is a rational choice. Long term averages are fine (even though long term averages can also change). However, the sequence of returns matters too. For the same level of long-term return, the actual output can be very … [Read more...] about How the Sequence of returns risk affects your Financial Planning?
You start with a certain asset allocation mix. At regular intervals, you bring your portfolio to original asset allocation mix. Let’s say you have Rs 20 lacs to invest. You have two asset classes Equity and Debt. You invest Rs 10 lacs in Equity and Rs 10 lacs in Debt. Asset allocation of 50:50. During the next 1 year, Equity gives 20% returns while Debt gives 5% … [Read more...] about What is Portfolio Rebalancing? How it helps?
As investors, we like to compare different investment products while making an investment choice. Most of us compare different products on their returns. We look at 3-year, 5-year, 10-year returns. We look at rolling returns for various horizons. That is good. However, we must also look at the way the performance is reported. You may not get what is reported. In this post, … [Read more...] about Mutual Funds, ULIPs, NPS, PMS: How is return performance reported?
Investors have different levels of risk tolerance. Some don’t bat an eyelid even if their portfolio nosedives by 25-30% while others worry even if their portfolio is down half a percent. The first category of investors are likely experienced investors while the second category have a low level of risk tolerance. How should such investors with low risk appetite or tolerance … [Read more...] about How to invest if you have low risk appetite?
Moving abroad for employment or planning to shift back to India permanently? How will your income be taxed? Can you continue holding NRE deposit and continue to get tax-free interest? Well, everything begins with finding out whether you qualify as an NRI or a resident. And this may not always be easy. To add to the confusion, the definition of Non-resident is different under … [Read more...] about Who is NRI as per FEMA and Income Tax Act?
If you are new to equity markets, you may have some discomfort with volatility. If you are closer to retirement or you are making a lumpsum investment, this discomfort is quite justified too. You can lose a lot of money and put your financial well-being in danger. However, if you are a young investor, volatility should not concern you too much. Let’s try to understand … [Read more...] about If you are a young investor, volatility can be your friend
You have decided to invest in mutual funds. You have selected the best mutual funds for you. You have also decided whether you want to invest lumpsum or through Systematic Investment Plans (SIPs) or STPs. There is one decision that you are yet to make. Which investment option to select? Growth or dividend or dividend re-investment? In this post, we will … [Read more...] about Mutual funds: Growth or dividend? What should you choose?