Should I Invest in an IPO

Should I Invest in an IPO

Many new and existing investors have been disappointed for unable to subscribe to the much talked Zomato IPO, a first by a Food Tech startup? One has not been able to grasp the opportunity because of the question that should one invest in an IPO or Buy after its listing on the Exchanges?

Huge liquidity in the economy and a horde of investors to invest given Indian businesses a raise of Rs.27.5 crores through an IPO in 1st half of 2021. Various Indian businesses are lining up for an IPO in the next few months boosted by the IPO stocks successfully listed in 2020. Gearing as much as 400% since listing in many cases and the uptrend of the stock market inject investing in an IPO an exciting opportunity for investors. With Zomato’s successful listing, there are some big names going public before the end of the fiscal year. Here are a few reasons to consider investing in the IPO.

Enjoy the first come first serve advantage. Investing in an IPO, one gets the opportunity to buy shares of a business with a high potential to grow at a lower price. The IPO is a chance to make a short-term profit and increase your wealth in the long term. What’s more, the share prices may rise sharply after listing on the stock exchange. 

Fulfill your long-term objectives. Equity investments are likely to offer high returns in the long term. When investing in an IPO, one must wait for momentous gains. The amount earned in a few years will help fulfil financial goals. And, if you’ve managed to pick a worthy, you will near to buy your dream home.

The prospectus includes transparent information about the company, its valuation, the number of shares offered to the public and the price per share. As an investor, one has access to real information. However, once listed, share prices vary based on dynamic market changes and the best price stockbrokers can offer.

Buy at a bargain price and earn big later as the IPO price band is usually the lowest a business offers to the public. In some cases, companies offer their shares at discounted prices, which is why many investors invest in an IPO. If you miss out on the investment, the stock prices may rise sharply, and you may find it hard to buy. 

Does this mean that IPO is always the right choice? VSRK says, it is not always peachy-keen, as there can be an IPO that failed and did not offer the returns investors expected for each successful IPO. If one is not afraid of the wait and watch the play, then waiting for the stock to list on the exchange would be just your cup of tea. In such cases, buying when the shares are cheap makes perfect sense, but investing when prices vault-up means paying more for unworthy.

Considering the Pros and Cons of Automated Trading

Considering the Pros and Cons of Automated Trading

Because financial trading involves constant monitoring, automation in the space is often marketed as a silver bullet. Automated software programs employ algorithms that can execute trades on your behalf, typically based on established parameters you’re able to define in advance. For example, an automated program can execute a “buy” order of a stock if it falls below a certain price, reducing the need for the trader to monitor live price movements.

The convenience of functions like this has led to expanding use of automated trading tools. In fact, platforms by EBS and JP Morgan now estimate that some 70-80% of trades originate from algorithms –– whereas in 2004, EBS stated that all trade orders were executed by humans.

As appealing as all of this sounds however, automated trading may not be for everyone. So before you look to incorporate these tools and strategies, consider the following pros and cons.

The Benefits of Automated Trading

Timeliness: Timing is a key factor in maximising gains and minimising losses in trading. Unfortunately, humans are unable to monitor markets at all times…. But trading bots don’t have that limitation! Automated trading tools, then, can help day and swing traders alike keep up with market fluctuations and make timely decisions. This is also a helpful perk when it comes to maintaining a more diversified portfolio. Monitoring assets across different markets requires more attention, but here too a bot can help to handle the minute-to-minute attention and decision-making.

Objectivity: Earlier this year, a survey by MagnifyMoney revealed that 66% of retail investors regret decisions they make based on their emotions. Additionally, 58% are in agreement that it’s best to keep emotions in check. This is another issue that can more or less be solved by automated trading tools. Trading bots don’t hesitate or act based on emotion when they execute market orders. They operate with pure, emotionless objectivity, which can helpfully balance out a lot o human investors’ natural tendencies to be somewhat more impulsive.

Backtesting: Backtesting is more of an analytical tool than an active trading mechanism. But it is nevertheless another perk of automation in trading. If you’re not familiar with backtesting, FXCM’s guide to trading platforms notes that it is one of the features you can find through online investing platforms like Trading Station. And what it does is essentially to assess the viability of a user’s trading strategy by evaluating historical data. In other words, it’s an automated method that helps you to optimise your strategy based on historical trends and present conditions.

The Drawbacks of Automated Trading

Anomalies: Many traders trust automated software not to make mistakes. Unfortunately, these programs are not yet entirely foolproof. Program errors can occur, lost or interrupted internet connections can interfere with trading, and various other discrepancies can occur. This doesn’t mean automated trading tools are always unstable, but neither are they 100% reliable.

Overconfidence: Unless your strategy revolves around more long-term investment, automated trading is not equivalent to hands-off trading. Nevertheless, some traders are inclined to get carried away with the implications of “automation,” ultimately becoming too confident in (and too reliant on) software. These tools are meant to be leaned on to some extent, but it’s important for traders to remember that they are not infallible, and they also don’t guarantee profits on their own.

Scams: The growth of automation has unfortunately also led to a rise in fraud. In 2018 for example, BitConnect investors were scammed out of almost $2 billion in crypto holdings by a bot. The trading bot they used guaranteed returns, but was instead instrumental in siphoning funds away from their accounts. Of course this doesn’t happen often, particularly on such a massive scale. But traders need to apply caution when evaluating automated trading services, particularly given that so many of them are new, and relatively unknown.

Bottom-line: Should You Automate Your Trading?

Automated trading can be helpful if you want to evaluate your strategy, maintain objectivity, and execute orders at lighting speeds. That said, it is also an imperfect practice, and should be approached with care and caution, if at all.

Ultimately it’s up to each individual trader to evaluate the pros and cons. And in most cases, even if you do decide to try automated trading, advice and guidance from human professionals is still the best way to improve your trading practices. If you feel you could use further guidance on this topic or on trading in general, get in touch with VSRK Wealth Creator here.

Invest Even If You are Not Rich Yet!

Invest Even If You are Not Rich Yet!

There’s a misconception that one needs a lot of money to start investing in stocks,  mutual funds and Exchange Traded Funds (ETFs). This is the vital reason why a few  people actually do investments. One thing is for sure, one will never get rich by  concealing money under a mattress or in a bank account. In order to build wealth,  one need to invest money with time. 

Read tips given further to start investing even if you don’t have much money. 

  1. One can get started investing with small amounts of money. No matter how  small one start, the most important thing is to get started. One can always  increase the amount with time.  
  2. Get your 401K match at the bare minimum. For your information, a 401(K) plan  is generally termed as an employer-sponsored retirement plan wherein eligible  employees based on pre-set criteria can make tax-deferred contributions  from their salary or wages like the EPF contributions in India. It acts as a  hike which can range from 2- 15% of one’s annual salary depending on employer.  
  3. You’ll never be rich if you don’t invest. There are countless people who are  scared of investing. While the sad reality is that most people will never  achieve financial freedom if they don’t invest. Not investing is the huge  market risk. 
  4. Let compounding interest work its magic. Start investing on early basis. The  earlier one starts, the major shift will be taken off from one’s shoulders by  compounding interest with years. 
  5. Take control of your finances and make smarter financial decisions today with VSRK. The sooner one starts the easier it will be to get on track for  predefined financial goals, which may vary on individual level. Even if one wants to start small, get started.  

One may not be rich today, but will never be if one don’t get started. Once started,  then you will be rich one day for sure.

Learn To Manage Your Finances this Ram Navami

Learn To Manage Your Finances this Ram Navami

Be your own Knight Armor

Nobody will act as an armor in the times of need. One has to create own angel brew and that is health insurance which will help cover any health contingency that may come at any point of time. With pandemic which spilled like termite globally, health insurance has become all the more necessity. This will not only help in covering all the expenses of treatment from the scratch but will also give a sense of satiety. Health insurance is prerequisite to financial planning for uncertainty.

Emergency fund a must

Nobody can predict what life has planned for anyone. Even, Lord Rama was given 14 years of stubborn exile when he was preparing for his Rajtilak for the thrown. For unforeseen situations like these one must always have an emergency fund in hand. This has happened recently with many people when many bread-earners lost their jobs and life savings during this pandemic, Emergency fund can help people sail through during such tough times.

Win with Disciplined Planning 

Discipline a key attribute to learn from the episodes of Lord Rama’s story. Just like his brother drew a line (Lakshmana Rekha) to protect Goddess Sita, every individual should draw a budget to frame financial stability. One must estimate how much expenses should be incurred during different periods and how much savings are essential. If one fails to adhere to set budget may drown in financial debt during difficult times.

Achieve goals with Patience and moderation 

Lord Rama went through much hardships during exile. His patience kept him firm and he did not lose hope. His patience and planning helped in saving Goddess Sita from Ravana. Just like that one should not lose patience during bearish market. Keeping calm will help to manage the finances in market correction timings. 

Device financial portfolio to play safe

When Goddess Sita asked Lord Rama to catch a deer and when he didn’t come back on time she sent brother-in-law behind him and got kidnapped by Ravana. Diversify your portfolio by doing some research. Investing in one avenue might now get you high returns.

Indian Chemical Industry: The Next Eye Catchy Sector!

Indian Chemical Industry The Next Eye Catchy Sector!

The Indian Chemical Industry is growing in leaps & bounds not only in India but also  the world. It not only plays a vital role in our economic development but also serves  as an important ingredient for the industrial and agricultural development. The  Indian Chemical & Petrochemical Industry is currently valued at close to $180 Billion  i.e. ~3% of the global chemical industry and is expected to reach $300 Billion by  2025. 

India’s Specialty Chemical Industry has been esteemed at $35 Billion and is well  tranquil for growth. It has grown by 13%-14% in the last five years and is expected  to reach $70 Billion by 2025. It is to be noted that a sharp fall in the crude prices  from $100 to $35/barrel has improvised the margins for alluring chemical players.  The Colorant Chemical Industry is worth $7 Billion in India thereby exporting more  than 72% of the annual production. 

A huge domestic consumption is major growth driver behind India’s Chemical Industry. Indians consume more than 40% of its output with promising new heights.  The growing urbanization and increasing disposable incomes of the Indian economy  is fueling substantial growth of the domestic Chemical Industry. Chemicals  constitute close to 5.5% of total Indian exports. 

After the giant dye manufacturer from China has been shut down due to  governmental policies, which has created a fairly huge supply glut and increased the  profitability of Indian companies. As a key ballooning element for developing  economy, the government has permitted cent percent FDI through automatic route  and de-licensed the manufacture of most of the chemical products except a few  hazardous chemicals. 

Notably, such chemical majors have a commanding market share in their respective  segments. Great rallies can be expected in the Indian chemical markets till the time  Chinese competitors become operational again. 

This will create volatility in the prices of the chemicals and India is set to be  benefitted the most from this in the near future. VSRK is all engaged to earn the  revenue from the same for its reputed investors.

Why do you Need Blue-chip Funds in a Portfolio?

Blue chip Funds

Every coin has two sides, risk and returns are those which comes with investing in any financial product. The decisions can be personal or suggested by an expert which can  be based on age, risk appetite, investment horizon, financial goals, and other vital factors. 

Mutual funds are trending, because of sorted risks by fund managers with higher  returns than bank savings and term deposits. Fund houses offer different types of  schemes, carrying a different investment strategy which are suitable for various  needs of individual investors. Blue Chip funds have become “hot pancakes of the  Industry”. 

Blue-chip mutual funds invest in a few selected large-cap companies with a proven  track record and established businesses with some lucrative characteristics  attached. The companies in conversation are managed by professionals with sturdy leadership based on business insights. Established business models with market  kingpin or one of the top ranked within the industry having verifiable track records.  They show profits year on year with uninterrupted dividend payouts. Tend to deliver  good returns over the long period, help growing capital to build a huge corpus 

The major reasons to support blue-chip funds as an excellent way to achieve long term financial goals such as retirement planning. The dynamism & volatility of stock  markets and of course economy needs stable investment returns which are provided  by such companies to withstand the market hush without difficulties. 

Reasons to include blue-chip funds in investment portfolio 

  1. The blue-chip companies pay regular dividends, which is an excellent way to  earn an additional income.  
  2. Being a part of the market leaders, Blue-chip investments are financially strong  maintaining a balanced debt-equity ratio further reducing volatility.
  3. Investments done in diversified businesses enables to earn income through  different streams serving a wide demographic which diversifies risks.
  4.  These companies are part of Fortune 500 list, which gives an additional  security while investing in a diversified portfolio.  
  5. Investing in the Equities among different sectors reduces risks and enhances  the returns from the growing markets.

Infinite Health and Wealth at VSRK

Infinite Health and Wealth at VSRK

VSRK is acting as a catalyst to promote awareness in managing funds which would cater to both the health and wealth security processes affecting families. An important economic subject of concern which largely affects the upliftment of any individual is health and financial security.

The relationship – financial security, health and happiness

It’s seen that nothing makes people happier or more confident than the satisfaction & contentment of having secure finances. The investors are blessed tremendously with the peace of mind that comes with having the financial basics covered. It’s not only the wealth which induces the feeling of financial security but rather the knowledge of having built a shield of financial protection to defend loved ones against life’s inevitable uncertainty. 

Unplanned financial emergencies

Rainy day savings or an emergency fund, if you don’t have one, start saving now to accumulate at least 6 months’ worth of necessary expenditures. Learn from the Pandemic that could be finding yourself unemployed for a period, huge unexpected medical emergencies or urgently replacing motor vehicle.

Family’s health

The rising cost of healthcare as primary concern of Indians with 63% experiencing high or moderate levels of anxiety over the issue. Additionally, 73% fear from an unplanned medical emergency. VSRK brings the good news that this fear can be eliminated by taking out a comprehensive health insurance policy. The financial risk is transferred to your insurer & that brings the real peace of mind.

Loss of income after death

Hopefully everyone lives a long and happy life but the truth is that nobody is mortal. Getting an insurance and knowing that a lump sum payment would be forthcoming if you came to an early demise is reassuring and the ultimate in protection from beyond the grave.

Protect your estate

One can follow some steps to minimize the amount of inheritance tax payable when one dies. There are other essential to dos such as naming guardians for your children and, for expats, cross-border estate planning issues to take into account, particularly for those with assets in different jurisdictions. Professional advice by VSRK is essential & helpful.

There is a lot that can be done towards your financial security by VSRK. It might be formidable but your one step will amaze you how quickly we will build your family’s protective shield and your peace of mind.

I for IPL or I for Investments

I for IPL or I for Investments

After witnessing depressing COVID-19, everyone is glancing with high hopes for a change and entertainment this IPL. Cricket is a religion for a country with diverse population over 1.38 billion. The excitement is pretty much tangible everywhere be it stadium, streets, or homes. Cricket teaches some valuable & relatable investment lessons as well.

“How much do a team needs on the board to win the match” is a process that goes through captain’s mind? And which is very important to make a tough fight. Determining winning score is equivalent to setting and accomplishing financial goals. Smart, Measurable, Achievable, Realistic, and Time-bound are the factors considered to set financial goals. Every keen player keeps a watch on his opponents’ moves. Similarly, keep a watch on your opponents which are real inflation and the volatility.

To win a match, the selection of right team players is vital. Similarly, while investing, every investment avenue has a role in the portfolio. The investment avenues must be chosen considering age, risk appetite, objectives, financial goals, the time horizon before goals shake, and the risk-return feature of the investment avenue.

The cricket enthusiast knows that the strategy changes from one cricket format to the other. Similarly, while addressing financial goal/s, one need to recognize investment objective; the risk appetite; and the time left (balls left) to achieve the foreseen goals. 

A good head-start sets the direction of the game and works in favor of the team to win the game. In the same way, the sooner one starts the process of saving and investing, a big corpus can be built advocated by the magic of compounding.

Pacing up the innings as the match unfolds, maintaining the required run rate always. Similarly, for your investments to roar, the earlier one starts saving and investing regularly, systematically, and prudently; with more investment time horizon you can compound wealth better. 

Just being a good player is not enough. Following the rules is equally important. In investing, the market factors and volatility provokes. One should be disciplined for the long-term particularly in equities to overcome volatility, and potentially earn decent returns. 

Cricket is full of highs and lows. Any captain keeps a ‘Plan B’ to win the game.
Similarly, if any unforeseen financial emergency occurs, one must have a backup plan. Therefore, building an adequate contingency reserve is necessary to deal with emergencies.

Keeping a target, the scoreboard and run rate to defeat the opponent team, and plans a strategy. Reviewing the investment portfolio to ensure whether you are on track to accomplish the goal. Further, it will help to serve in the interest of long run financial wellbeing.

The way the winning of a team can be attributed to preaching command of the captain. Similarly, seeking an efficient advisor who spoon-feed their clients in creating a robust financial plan with a holistic approach. 

Cricket is a sport played with a passion to win. With the same passion, focus on accomplishing your financial goals by making prudent decisions. Believe in the magic of compounding and invest for the long-term, a sure-shot formula to win.

Should I stop SIP at Market High?

Should I stop SIP at Market High

The stock markets are making all-time highs. Many think – too fast, too soon! We could sense that all those questions are back such as should I stop my SIPs? Or should I pull out money invested in my funds? Is the time right to add more funds to stocks? Or should invest in gold/real estate? Now the problem arises is that what should be done to find the correct answers for above stated what shall be done. Investing success is about 99% temperament and only 1% about where you invest.

We have huge ocean of investment avenues and various hot ideas that keep floating around, the question is how to react in such times. It is very well said, “Your biggest enemy is yourself.” That’s where thought process of investors comes into picture. Think of a state of mind as a predefined thinking guide but not as a shortcut to meet goals. It is something that makes you behave in a certain manner.

As far as investing and wealth is concerned, the model that works is Asset Allocation. It acts as a FOMO antidote. For your information, FOMO is Feeling of Missing out. At any time, it is difficult to know which investment is best. Asset Allocation allows us to take a chunk of several avenues that is worth investing in and market cycles does wonders.

Any investor rebalances with time, to check that did the portfolio was a thumb-up or a thumb-down. Don’t stress on the positioning of the market, or if product is expensive to get into or get out of.  The idea of allocating in various types of investments wherein few can be highly volatile, & others less. Some active, some passive. It helps you diversify which encourages prudence, risk management and good investment practices.

We live in a world of Volatility, Uncertainty, Complexity and Ambiguity. A diversified portfolio, it acts as a cushion from the impact of unknowns. Investor is aware that there is a chance of finding comfort as the other ones are working towards long term accumulation.

It gets you to act. The portfolio is to be rebalanced periodically based on the rules set before, without getting mixed up in present emotions. It helps in getting Behavioral Alpha. Investments when managed well, the alpha is assured. One never pulls out of markets when it’s all-time high. One never stops SIPs. Invest when there is blood around. One should patiently move from one asset to another, without a fuss.

VSRK suggests that even when markets are at all-time highs, our experts tells us to continue investments as per allocations. Be active in SIPs. Rebalancing of asset allocation is better but one can sell the chunk of the money that is needed urgently. For lumpsum investing, consider the kind of a stomach you have in terms of funds and risk appetite.