Trading Aspirants

Why SIPs score over lump sum investments?   Systematic Investment Plans (SIPs) are not magic. Their superiority to lump sum investments is a matter of probability or even psychology and not an absolute law. What this means is that, most of the time, under most circumstances, over a sufficiently long period of time, SIPs will do better. To understand this, one just has to review what a SIP is and what it does. SIP is a regular investment in a fund of a fixed amount at a fixed frequency, generally monthly. SIPs neatly solve the two main problems that prevent investors from getting the best possible returns from mutual funds. Firstly, since SIPs mean investing with a fixed sum regularly regardless of the NAV or market level, investors automatically buy more units when the markets are low. This results in a lower average price, which translates to higher returns. If you invest a large sum at one go, you could end up catching a high point of the equity markets. ...

We all understand that a share in market parlance is part ownership in a company. So if a company has issued 100 shares and you own 1 share then you own 1% stake in the company. The big question is how to invest in shares and how to invest in share market? Let us also grasp what is stock market, how to invest in share market and how to buy shares in India. Let us also look at equity markets and how to buy shares in Indian equity market. What is stock market and is it different from share market? A stock market is a gathering of buyers and sellers of stocks in a single platform. Before BOLT was introduced in 1995, people used to trade standing in the trading ring. Nowadays, all trading happens in computer terminals at the broker’s office or on the internet. Share market and stock market is one and the same thing. Share Market Basics Before starting to invest in stocks, it is important to learn about what the share market is and how it works. It is where s...

The relationship between psychology and stock investing Our psychological biases come to bear on our investing habits, leading to outcomes we'd rather avoid If you thought that investing in the stock market is all about crunching numbers, you will be surprised to learn that your own psychology is as much, if not more important when it comes to making critical decisions. The study of the mind and behavior as it relates to how we invest is a subject that is not only extremely interesting, but also greatly useful to investors. Since market moves tend to be erratic and often irrational, self-awareness can help us recognise when our instincts are not grounded in clear thinking. Nothing is more unfortunate than losing money despite having the right research at one's fingertips, simply because of the very human tendency to act and think in certain ways. One important area that stock-market psychology explores quite a bit is thinking biase...

DEMAT ACCOUNT: An account that is used to hold shares and securities in electronic format is called a Demat account. The full form of Demat account is a dematerialised account. During online trading, the purpose of a Demat account is to hold shares that have been bought or dematerialised (converted from physical to electronic shares), thus making share trading easy for the users. In India, Demat account service is provided by depositories such as NSDL and CDSL through intermediaries / Depository Participant / Stock Broker such as Angel Broking. The charges of Demat account vary as per the volume held in the account, type subscribed, and the terms and conditions laid by the depository and the stock broker. What is Demat account? Demat Account or dematerialised account provides facility of holding shares and securities in electronic format. During online trading, shares are bought and held in a Demat account, thus facilitating easy trade for the users. A Dema...

Your first mutual fund is very important The first fund you buy plays a major role in making or breaking your belief in stock investing   Useful, simple to understand and easy to execute. These should be the qualities of your first mutual fund. For beginner investors, this is generally best satisfied by tax-saving funds or balanced funds. Here's why. When you start investing in mutual funds, it makes sense to opt for a fund that invests mostly in equity. The reason for this is that you are likely to have no equity investments at all. New investors generally have bank deposits, the PPF and other fixed-income investments. Since equity is the best type of long-term investment, and since mutual funds are the easiest and safest way to invest in equity, it follows that the type of fund you should choose must be an equity fund. Subscribe to the Value Research Insight newsletter There are two types of funds that are uniquely suitable as beginner funds. These a...

How to buy a mutual fund If you are planning to start investing in mutual funds, here's a complete guide What you need to get started with Mutual Fund investing? To start investing in a fund scheme you need a PAN, bank account and be KYC (know your client) compliant. The bank account should be in the name of the investor with the Magnetic Ink Character Recognition (MICR) and Indian Financial System Code (IFSC) details. These details are mentioned on every cheque leaf and it is common for an agent or distributor to seek a cancelled bank cheque leaf. Get updates from Value Research in your inbox How to get your KYC? The need for KYC is to comply with the market regulator SEBI in accordance with the Prevention of Money laundering Act, 2002 ('PMLA'), which undergo changes from time to time. KYC process is investor friendly and is uniform across various SEBI regulated intermediaries in the securities market such as Mutual Funds, Portfolio Managers, Depositor...

When is the right time to invest? Know the right time to start your investments Yesterday was the best day to start your investments. If you missed it, you should start your investments today. Delay it further only if you want to forgo some extra returns. Don't worry too much about getting everything right. If you are following the basic rules, you will definitely get it right. It is quite usual for you to feel a bit nervous when you are investing in unfamiliar instruments for the first time. But you will learn on the way. So, don't let your nervousness delay your investments further. As said before, always try to match your investment horizon with your investment choice. This will help you eliminate unwanted choices, and identify the right ones. It will also save you a lot of headache later. As a rule, avoid risky investments like stocks, equity mutual funds for short-term goals. This is because equity can be extremely risky and volatile in the shor...

FINANCIAL PLANNING FOR A CHILD WITH SPECIAL NEEDS Children have special needs due to a variety of reasons. For example, some children may have learning impairment and others may have a psychiatric syndrome. Most of the children with special needs have developmental challenges or profound cognitive impairment which makes it very difficult for the child to mingle with other children of the same age group. Thus the need to take care for these children in a special environment arises. While the world is learning to become more sensitive to children with special needs, there is still a major challenge for the parents to take care of these children financially. In most cases of special needs, the child is likely to be dependent on their parents substantially. Hence parents not only need to plan during their own lifetimes but also beyond that. When you plan for your child with special needs, there are some unique aspects you need to consider apart from the financial security and cov...

The primary objective of investing is to ensure that every person is able to meet his or her future financial objectives. Rise in inflation makes it inadequate for individuals to simply earn and save some part of their incomes. To meet the price increases due to inflation, investments become important. The stock market is one of the oldest and most popular investment avenues due to several benefits of investing in stocks. Benefits of Investing in Stocks Higher Liquidity. Versatility. Higher Returns in Shorter Periods of Time. Acquire Ownership and Right to Vote. Regulatory Environment and Framework. Convenience. Higher Liquidity: In the Indian stock market, two exchanges, the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) play important roles. Most companies trade their shares on either or both of these exchanges. This provides higher liquidity to investors because average daily volumes are high. Therefore, if an investor wants to buy or sell any product...