Better Half

Recently i received a beautiful message on mobile, some times we got such awesome message from awesome people. I don’t remember who have sent but I would like share it with you….

However, our wives or should I say ‘better halves’ forgive us all the time for  transgressions committed by us. 

So here goes my piece…

One day out of the blue, it struck me while speaking about SIP, that SIP itself  is very similar to our wife. 

Let’s look at some similarities : 

1) An SIP is meant to be for the long term. Our relationship with our better halves is also perpetual. 

2) An SIP provides incredible support when markets are down because the equal investment buys more units. Similarly our wives are always with us when we are down, whatever may be the cause. 

3) Again when markets are on a high and as we feel very exuberant, our SIP quietly goes about doing its work. Similarly during our moments of glory, our wives allow us to enjoy our moment in the sun undisturbed as they quietly go about doing their work. 

4) SIP is always about regularity. It is always there with us month after month, year after year. Similarly our better half too is with us at every step of our life. 

5) Finally SIP, little by little, creates the greatest wealth for us over our life time. Likewise, towards the end of our life’s journey, the greatest wealth that we can talk about is our wife. 

Hence she is known as our better half. 

Hence saying that ‘SIP’ is best for us is no exaggeration.

Mutual Funds Sahi Hai !!!

Stock market is a dangerous, risky place to invest but rewards are sometimes equally great.
Have a look at some companies where investors have lost a lot of money.
10,000 invested in Videocon Industries in 2012 is today Rs.610
10,000 invested in Religare Enterprise in 2007 is today Rs.554
10,000 invested in Lanco Infratech in 2006 is today Rs.91
10,000 invested in Reliance Communication in 2006 is today Rs.156
10,000 invested in Kingfisher airlines in 2007 is today Rs.0
The list is very long…
There are numerous examples that have destroyed investors wealth even after staying invested for many years.
So don’t get Carried away by a few success stories of Wealth Creation. It is not suitable for novice and amateur investors.
It’s better to leave the job to the experts and experienced money managers.
That’s why it is proclaimed
Mutual Funds Sahi Hai

Patience is key to success

In the 60’s in USA  scientists have performed a test. The test is famously known as “MARSHMALLOW RESEARCH”

What is this Marshmallow Research ??? let’s check out….

Marshmallow is an eatable food item. Today we all know marshmallow as a android version.

The scientists form a group of students aged 4 to 5 and told them that they can eat the marshmallow immediately or after twenty minutes. 

The student who will eat this marshmallow after twenty minutes will get another food item.

Many of the students ate  immediately. But some of them have patients the ate after twenty minutes.

After 20 /25 years the scientists found that those who ate the Marshmallow immediately  are living a very simple and common life.

But those who waited for twenty minutes or beyond, are doing well in their respective jobs and career.  They are at top position in their careers.

So what is the outcome..?? The outcome is that  to be successful in life you need to have some patience.

The same thing applies in your investments too. 

We as a Mutual Fund advisor always insist  to wait,  hold on and keep patience. 

It is already proven by the scientists that patience  is an important aspect to be  successful in investments or in also a human life.

So if you have patience you will be always in profits in mutual fund investment. Weather it’s  SIP or LUMP SUM INVESTMENTS.


Difference between Stock SIP VS Mutual Fund SIP

Client : Hi Mr. Advisor, I want to know the difference between Stock SIP vs Mutual Fund SIP. 
Which one is better & why ? Can u explain both the concepts ?
Advisor : Yes sir surely. Why not
Well,  Stock SIP is averaging and mutual fund SIP is rupee cost averaging.
Albert Einstein very well said…
“Compound interest is the eighth wonder of the world”
we said…
“SIP is ninth wonder of the world”
Client : Oho… How !!! 
Advisor : Let assume, you want to buy 10  Kg. Apple every month…. 
Price of apple in January  – 20 per kg. Your expense is Rs.200, right?
Price of apple in February- 40 per kg. Your expense is Rs.400
The average per kg cost is 20 + 40 = 60 / 2 = 30 per kg.
This is average and your stock SIP is working on same principle.
Client : Then what is rupee cost averaging?
Advisor : Suppose your budget is to spend Rs. 200 per month on Apple. No matter what is the price.
Price of apple in Jan – 20 per kg, so you can buy 10 kg. (200/20)
Price of apple in Feb – 40 per kg. So you have 5 kg. (200/40)
Now tell me the average of per/kg apple. 
Client : Same 30 per kg
Advisor : No…
Number of kg you bought = 10 + 5 = 15 Kg
Total cost = 200 + 200 = 400 Rs.
Average cost = 400 /15 = 26.66
Now in the above example  as stock SIP, you bought of  apple is averaged at Rs. 30 per kg.  & as Mutual Fund SIP, your buying cost is averaged at Rs. 26. 66 per Kg. for the same apples.
This is Rupee cost averaging. Mutual fund SIP is working on this principle.
Client : Oh great!! So every time our cost per unit is less than its avg.  Now I fully understood rupee cost averaging. It’s awesome…

How to beat Inflation ?

Classic example of inflation when I bought MILK today morning….
Amul hikes milk price by 2 rupees per liter recently…
Rate in  March 2007 per liter after 2 rate hike in 2006…
Milk price of AMUL
Gold 19
Shakti 17
Taza 15
Today’s rate (March 2017)
Gold 52
Shakti 48
Taza 40
Milk price (INFLATION) increased annually between 10 to 11%
Your bank FD, Insurance investment, Gold and Real estate can’t beat this inflation  ( 5- 6 % tax free return of such investment)
Your return (5%)  – Inflation (10%) = 5% LOSS on your Investment
My Finology always reminds you that INFLATION is the biggest risk in the world.
Do you know the PROFIT or LOSS of company like AMUL?
The profit of this business is more than inflation (15-20%). You should buy this business via equity investment.
There are many good businesses (like banking, software, petroleum, pharma, hospital, auto, consumer  and many more) which beat inflation significantly.  For that you have to buy equities  so that you become a partner of that businesses.
But how do you find such good businesses?
It’s not your cup of tea but YES , It’s a job of Mutual Fund’s fund manager.
Conclusion of this example….
You must invest via mutual fund to beat inflation  ( 12-15% tax free return)

Wealth Creation- Best Example from Mutual Fund Investment

Equity mutual fund has immense potential to creating wealth, But how to create the wealth? It’s also big question for investors to hold the investment for how many years? See every investors must have their own plan and you must stick it for creating better wealth over a time. Today I want to share one of the best example by one mutual fund scheme which have given tremendous return in the history of all mutual funds ever in India.

Reliance Growth Fund has earned good reputation of wealth creators in the Indian mutual fund industry. An investment of Rs. 50,000 in RGF at inception in 1995 would have grown to about Rs. 50 Lacs by January 31 2015. How excellent if your father have just invested Rs. 25,000 in this fund and hold up to today. The fund has given about 25% annualized return since launching in the last 20 years.

If one have choose the SIP way, monthly SIP of Rs. 2000/- since inception would have grown to over Rs. 96.8 lacs (near to 1 Crore) by January 31 2015. While the investor would have just invested total about Rs. 4.56 Lacs. You could become CROREPATI without participating in KBC.

So it means creating wealth is very very easy in mutual fund. Wait wait my fellow reader it is easy to start but too hard to hold. So here I’m not recommending to buy this fund but just giving you the best example of wealth creation through mutual fund. If you also want to create wealth in such way you should contact to your financial advisor and draw your future plan and enjoy the way of wealth creation.

Happy Investing……. 

Basic difference between Mutual funds and ULIP funds

During my last conversations with few intelligent investors, I was asked same question on mutual funds that why investor don’t earn good return or make loss in mutual funds? But in reality all that investors invested in ULIPs (Unit Linked Insurance Plans) through agent who sells their first policy in their life. Today I am writing this article for those intelligent investors who don’t know basic difference between mutual funds and ULIP funds.

What are the charges applicable on ULIP ?

1. Premium allocation charges : This is a percentage of the premium to be deducted upfront, before the units are allotted to the insured. This charge normally includes initial and renewal expenses apart from commission expenses.

2. Policy administration charges : These are the fees for administration of the plan and levied by cancellation of units. This could be flat throughout the policy term or vary at a pre-determined rate.

3. Mortality charges : It is the fee for the insurance cover. It depends on the age of the insured and the sum assured.

4. Fund management charges : It is charged maximum 1.35 % of total fund value on year on year basis and it is called expense ratio in mutual fund.

5. Surrender charges : If you are unable to pay the premium within the lock in period of 5 years, then surrender charges would apply for enchantment of the units.

Read this interesting link on what most important questions you should ask a ULIP agent.

Basic difference between mutual funds and ULIP funds

1. Equity mutual funds are very actively manage their portfolios and try to beat their benchmark. While ULIP funds are passively manage and there is less portfolio churn.

2. Diversified equity funds have more aggressive allocation to small and mid-cap companies compared to their ULIP counterparts. Therefore they are able to generate higher returns.

3. The debt mutual funds also managed more actively than debt ULIP funds.

4. The fund management fees of mutual funds are higher than ULIPs. The charges for ULIPs are capped at 1.35 % and in mutual funds it call expense ratio are on an average between 1.75 to 2.5 %


You must read this recent article about How top performing mutual funds outperformed ULIPs.

Dear now on wards don’t think mutual fund as ULIP funds, there is big different between this two products.

SIP is the Basic and Dumbest way for WEALTH CREATION, Is it ???

It’s been always told to us that money making is not easy. We also know it for a fact, that yes, it’s not. It takes a lot of hard work to become richer and for sustaining the Wealth created. I would like to tell you about someone who actually made money easily, without even knowing much about what exactly was going on, but kept patience with discipline and got paid off.

It’s a story about a common man with an extra-ordinary investment experience.

Long time back in the year 1999 a small farmer who knew nothing about stock market himself and was a total layman and least bothered about any Stock Exchanges. But he had a friend who was involved in Equity Investment, in fact was a wise stock broker (rare species today)

One day the friend on a cup of tea advised him for investing into Equity for long term. The farmer being a novice and also not cash rich couldn’t understand that what he’s supposed to do?

The friend soon realizing it, advised him to just invest Rupees 5000 per quarter in ABC stock till as long as it’s possible. He asked him to assume it as lifelong a “lottery” and you should continue buying it every quarter for the decades to come.

This fellow guy didn’t understand anything much rather than the word “lottery”, neither he knew what exactly ABC is into, but he believed his friend and soon got fixed with a stock broker to do the needful. Between the years 1999-2003, ABC was actually in a price range of Rs 5 and Rs 240 on the upper side. During 1999-2003 the Investor accumulated a lot of its shares on a quarterly basis when the prices stayed low between the mentioned above ranges. Year 2004 onwards it has moved one way up. In 15 years total investment done is Rupees 3 lakhs. And can you guess his today’s portfolio Value??

He got somewhere around 20,000+ shares of ABC today and going by the current market price, it’s a whopping 1.5crore!!!

Let’s not talk about the dividends he got all this years, because ABC didn’t give any, but then why should he care! He’s still investing the same amount every quarter. He said he never knew if this was going to happen. He didn’t use to keep price neither anything else in check; he was too focused and disciplined doing what he was asked too.

Even being rich today, he enjoys the same life style as earlier by taking care of his farming land and still invest 5k per quarter in same stock and is expected to do so whole his life.

Moral of the story:-

At times extra knowledge and doubts becomes our enemy, when there are too many questions going in the back of our mind, we intend to take wrong decisions.

We keep asking, finding, and searching the world inside out doing Google, doing Yahoo to know those things which are not required to know for simple and smart investments.

Sometimes being a layman actually works in a great way, something like this farmer guy. SIP is the “basic and dumbest way for Wealth creation”, now you also know that actually it is.

If someone is not available to advice the stock like ABC than its equity mutual fund which can solve all your problem…

Hence, my friend, stop thinking and start investing. It’s never too late. Happy Investing in SIP…..

All about Tax Saving Mutual Fund

By RJ Advisory

“The Hardest thing to understand in the world is the Income Tax” -Albert Einstein. Tax Planning is an important part of personal finance but common investors bemused about the income tax. When the financial year coming to close and people have started to complete their tax planning before deadline. It is such a huge task to complete before 31st march and in this rush they select unwise products. Keep one thing clears in mind that investing for only saving
income tax can be harmful to your personal finance.

Why ELSS more beneficial than other Saving Schemes?

Popularly known as ELSS fund are offering tax benefits to the investors under section 80C of the Income tax Act. Equity Linked Saving Scheme which offers investors the dual benefits of capital appreciation and tax benefits. An investment of up to RS 1 lakh will give the investor a tax exemption. There is lock in period of three year in all ELSS scheme. They give better return than other diversified open ended equity scheme because of the 3 year lock in period as the fund manager has no redemption pressure for up to 3 year. Similar to other equity funds, ELSS funds also available in both growth and dividend options. Under the growth option investor get capital appreciation on the maturity time and under the dividend option, investor can receive a regular dividend income even the lock-in period not completed. Dividend amount and capital gain are totally tax-free in ELSS Schemes.

ELSS Vs other Saving Schemes

The Lock in period of such fund is only 3 year which is lower compare to other saving schemes like PPF (15 years), NSC (5 & 10 years) and Bank FDs (5 years). ELSS funds are linked to market but there are also good ELSS schemes which have given better return over a long time. You can also opt for SIP investments, which brings discipline in your investment.

What are Some Downsides of ELSS Funds?

Premature withdrawal is not possible in this type of funds before 3 years. Saving Schemes like PPF and Bank FDs allow withdrawal subject to certain conditions. All risk of equity market is associated with ELSS, so it is not advisable to risk adverse investors.

Performance of Some Good ELSS funds

Remember to check at the long term performance of the fund before invest in it. Also remember to look at the fund manager’s view of investment, portfolio return over the long term, portfolio of the fund and expense ratio. But over a long term, ELSS funds are the best tax saving instruments; especially if you are an investor who can take high risk.

Recently SEBI board has accepted a long term policy for mutual funds which can give some tax incentives under section 80C of Income Tax act.

Why Mutual Funds are much better for investors in India?

By Abbasali RJ Advisory
I strongly believe that Indians are very good in saving ratio because investors saving ratio of Indians are highest in the world, but when it comes to investment most of peoples fail because of lack of knowledge and proper advice for their future goals and future needs. While checking the available financial products in the market most of people park their money in traditional instruments like Bank FDs, Insurance Plan and Post office savings. There is also lack of investor’s education and awareness about Mutual Funds. Investor always try to look for good investment opportunity, which gives good
return, but at the same time people also check their investment should be safe and secure. I strongly believe that mutual funds are best available option in financial market and that can help a lot to investor to manage their wealth.

What are the major benefits of investing through Mutual Funds?

Small Amount
A Mutual funds let’s you participate in a diversified portfolio for as little as Rs. 5000/- and sometime less. It is less expensive way to invest compared to directly investing in the capital market because the benefits of economics of scale in brokerage, custodial and other charges translate into lower costs for investors.
Mutual funds in invest in number of companies across a broad range of sectors and industries. This diversification reduces risk because all the stocks will not decline at the same time; some may perfume well at the same time that others are not. Mutual fund unit holders can benefit from diversification techniques usually available only to investors wealthy enough to buy significant positions in a wide variety of securities.
Professional Management
Mutual funds provide the services of experienced and high skilled professionals backed by a dedicated investment research team that analyses the performance and prospects of companies and select the suitable investments to achieve the objectives of the particular scheme. Fund management is a separate department where there is an expert fund manager at the top and a research team to help him take decision regarding when and where to invest.
Convenience and Flexibility
Investment in mutual fund reduces paperwork and helps you to avoid many problems such as a payment delays, bad deliveries, auction and follow up with brokers and companies. Mutual funds also save time and make investing easy and more convenient. Mutual funds add flexibility through features such as a Systematic Investment Plans (SIP) Systematic withdrawal plans (SWP) Systematic transfer plans (STP) and Dividend transfer plans (DTP). You can invest systematically or withdraw funds according to your needs and convenience.
Liquidity and Transparency
In open-ended schemes, you can get your money back promptly at net asset value (NAV) related prices from the mutual fund itself. Mutual funds offer investors the exit options if they require money, but they have to pay exit load. The rate of exit load is different in different type of schemes. Investor can get regular information on the value of their investment in addition to disclosure on the specific investments made by the mutual fund scheme, the proportion invested in each class of assets and the fund manager’s investment strategy and outlook.
Chance of Potential Return
The experience of many mutual fund schemes indicate that if the fund manager is capable of managing the portfolio efficiently, than over a long term the return will be considerably more than the level of inflation.
Choice of schemes
An investor with the help of financial advisor can invest in the scheme that suits him depending on his risk appetite, time horizon and expected return to achieve his financial goals.
Well Regulated
All mutual funds companies are registered with SEBI and they functions within the provisions of strict regulations designed to protect the interests of investors. The operations of mutual funds are regularly monitored by SEBI.