Should Investors Encash their Gains?

Should Investors Encash their Gains_

A lot of investor have experienced the uptrend in the portfolio and from the recent market rally accessed outstanding gains. Most of the investors are enticed to liquidate them. Let’s read further to evaluate whether this scheme is sound enough or not.

VSRK has a good clientele and few of them keep asking such questions. Recently, a client named Mr. Dheer invested an added amount of Rs 5 lacs from existing savings in equity funds in lump sum during the market bang in March 2020. Alike others, he was advised that the market is low lying and that it would be the propitious time to earn gains in the coming future.

The professionals say when the markets collapse, investors feel congenial in withdrawing from market and holding cash as it gives them a sense of security in the short term. This act of mindset is not intellectual to do so in the long run. It is well said and aptly resembles here, “When the going gets tough, the tough get going.”

Surprisingly, the recovery of the market went shooting within a few time and documented new highs in the immediate past, and the value of investments crossed Rs 8 lacs, giving an annual return of about 64%.

The figures depicts not only numbers but VSRK’s expertise and clients’ joy for the decision made to invest during the market fall. Now, he was confused and wanted to know whether to book profits by redeeming. But up to what extent and proportion of the investment could be withdrawn.

VSRK suggested him that either he can withdraw the money that was invested in stock markets at any moment of the time as no rules are preventing him from doing it. So when the markets fall, instead of thinking of how to get your money out of the stock market, restructure short term equity plans to meet long-term goals.

Conclusion:
Market lows are gut-wrenching for even habituated investors. Whereas equity investing has to be a skillful term plan. Stay invested to reap the benefits with the delta in market conditions for an uptrend. You can visit VSRK to reset your portfolio and earn the best out of the stock market.

Nuts & Bolts of Cashing the Stock Market Gains

Stock Market Gains

Triumph in timing the market

This incidence may give this client or anyone reading this, an impression, that timing the market is as easy as breathing and a good shot. But that’s not right. The market is unpredictable and no one can time it perfectly not even any scholar. It can be accepted as a one-off instance. It won’t be ethical to expect same returns from investments in the future.

Score on the flourishing days of the market

Trying to time the market, the possibilities are failing to experience the best days of the stock market gains. Glancing the long-term perspective, missing a single day gains will deprive one from the benefit of compounding of the missed returns.

Redeem at reaching goal

Equities are meant for a time horizon of at least 5 years or say 3 years in today’s market scenario. Never invest if one will need the money before the time period. One should stay invested throughout the tenure and avoid making unnecessary transactions. You will gain maximum benefits from equities if you stay invested for a longer time period, as you get to benefit from compounding.

A must asset-allocation Strategy 

Having a planned asset-allocation scheme assures an investor to book profits in a systematic manner. Apply a rule for rebalancing, be it at the end of financial year or as the allocation diverges by more than 10% of the planned ratio.

Try for a SIP not lump sum

Anyone should spread the investments over a period of time especially in case of equities. Investing systematically through an SIP or STP helps in entering the market at the right time, as the purchase cost is averaged out. 

Points to Focus

Emergency fund: Preserve the funds equivalent to at least six months’ expenses either in a liquid fund and sweep-in deposit which can be handy during uncertain scenario.

Life insurance: Cromulent life cover is important specially term plans if one has financial dependents.

Health insurance: Owing to 2020 uncertainty, adequate health cover has become vital for the family.

Should you cash out of the stock market?

When the stock market falls, it is only a paper loss but actually, no monetary loss. However, the moment any investor converts stocks to cash in this period, one turns paper loss into an actual one.  Investors should know that the cashing out will not give you the chance to benefit from market rebounds. A market uptrend can give you the scope of a break-even if not the opportunity to profit. If you cash out, then there is no hope for sure. As Inflation also has a devastating effect by eroding the value of money and reduces its purchasing power.

Never Under-Estimate the Power of SMALL CAP

SMALL CAP Performance

Over the last two years, in the unfolding Bull Run, small caps have monopolize the limelight. Since April 2021, S&P BSE 250 Small Cap TRI has delivered 106% as of July 2021, thus doubling an investment made in the index. Looking at the long-term figures, the picture is pale. The 7 and 10-year returns of the BSE 250 Small Cap TRI stand at a modest 13.4 and 11.3% p. a. respectively. This tells that the short-term smart performance of small caps may not reflect in the long-term, because of amid market corrections. The investors who are hypnotized by short-term returns from small caps need to put things in perspective with time.

The small-cap segment provides ample opportunities, as seen by the long-term returns of the top funds. Deciding to invest in this cap, must go with a fund that has proved its ability to navigate the funds and returns.

After the crash in March last year due to the pandemic, the segment witnessed an investor evacuation as the markets recover. From July 2020 till February 2021, small-cap funds experienced an outflow of Rs 4,300 crore. Noting, during the same frame, the AUM of the category grew at an annualized rate of 87%, thanks to the mega relay in small caps.

Time and again, whenever investors are fearful, and then miss out on the big Bull Run that follows the crash. Presently, it’s relevant to small-cap funds, where the return-generating periods come in cycles and those who are not invested during the times tend to have a dismal return experience. 

The small-cap category has outperformed all the major equity categories in 2020-21. At the end of July 2021, the one-year return of the small-cap category stand at an average of 108%, which is about 30% more than the returns from the mid-cap category, the next best performer. Thus, if you look at the returns over any of the shorter time-frames, the small-cap segment triumphs over all other major categories by a small margin. However, if we look at the other end of the spectrum, one sees that the quantum of outperformance over other categories significantly reduces as we increase the investment horizon.

Despite this, the small-cap segment does provide ample opportunities, as seen by the long-term returns of some of the top funds. Hence, if you decide to invest in this space, you must go with a fund that has proved its ability to navigate this tricky segment.

The investors in this high-volatility segment pay not just in terms of costs but also in terms of high emotional strain from time to time. If planning of investing in same, one must have the ability to digest high volatility. Also, given the recent high returns, moderate your return expectations. Like other equity funds, invest in small-cap funds only through SIPs.

Understand that small-cap funds should play supplementary role in any portfolio with allocation of 10-15%. For most investors, investing in three-four flexi-cap funds would satisfy to provide the necessity to the small-cap segment. Happy Investing.

Joyous God Mangalmurti Ganesha brings Prosperity in Investments

Happy Ganesh Chaturthi

The god who is an epitome of knowledge and abundance of wisdom & is always worshipped before initiating any work. Let’s start our investment planning with an inspiration for proper financial planning through attributes and techniques of his stature.

Wisdom from Big Head

The bigger head represents broad-mindedness, forward thinking, and a vast ocean of knowledge. It emphasizes on the ability to grasp and understand markets open mindedly, prudent thoughts, and seek knowledge will help one look at all the options and make wiser investment decisions.

Draw up a smart goal-based financial plan and wisely act on it to secure your future. Anticipate how investment would grow after say 5-10 years considering the effect of inflation on different investment avenues and accordingly choose the type of Investment Avenue.

Big Ears symbolizes good listening skills

He is named Surpakarna for his large ears which indicate that in order to be a good investor, one must be a good listener. A good investor keeps ears wide open to sound financial advice which is ethical, unbiased, experienced, and research-backed from VSRK to make better investment decisions. 

Listening in unification with wisdom will enable you to filter and choose the right. Focus on requirements, aspirations, and desires in terms of your financial goals, investment horizon, financial standing, age, and risk profile, and the number of years left for the completion of your goal.

Focus from the Eyes

The sharp small eyes teaches to have focused approach and looking at the details with concentration to achieve growth. One should focus on individual or family goal-based investment plan. A focused mind to have a clear objective of “where to invest”. Consider safety and returns as foremost requisites.

Carefully create a well-diversified strategic portfolio based on your asset allocation that will strive to beat the inflation and accomplish your financial goals. Eliminate the unnecessary noise of the herd with a holistic view and a long-term approach helps to maintain and grow wealth.

Adaptability from the Trunk

The lord is known as Vakratundaya for the flexibility of trunk representing adaptable nature and to follow what is righteous. As an investor, one should track and review investment portfolio to check its performance contribution to the journey of wealth creation. Evaluate portfolio on a regular basis to know when to be patient about holding on to a particular investment and when it’s time to change it.

One-Tusk Removes Evil 

Ekdantaya is another name for Lord Ganesha which symbolises plucking out the evil from the good. Investors based on market news and stock sensitivity do not realize holding on to the underperformers in portfolio which is equally damaging as the removal of a worthy investment from your portfolio.

Greater endurance with large stomach

Vighnaharta signifies keeping all the negativity away and managing every kind of obstacle that comes in the path of life. This is a vital trait that we can definitely benefit from if we strive for gaining more courage and bravery in the face of adversities.

The enormous brook of Lord Ganesha teaches to alphabetize the investments as eating meal in small bites. Investments should in accordance to risk appetite, age factor, & financial goals. It is always suggested to invest systematically and diligently via the SIP route; gradually increase the amount as per financial capacity. With the rupee-cost averaging in volatile markets and the power of compounding, the money will grow over time. One should maintain a contingency fund and undergo both financial and emotional trauma during harsh or extraordinary circumstances.

Not being biased from Axe

The axe possessed by Ganesha acknowledges not to fall quest to sentiments or any sort of biases during investments. Think logically and freely, keeping aside the undercurrents of market downswings. Never discontinue SIP during this time frame and never harbor any anchoring bias to any investment that is unhealthy for financial well-being.

Feet positioning to maintain Balance

Lord’s one feet rests on the ground and another is folded. One can learn to maintain balance in life between inner happiness and materialistic happiness. To lead a contented and happy life, one needs to maintain a balance between material and spiritual needs and invest seeking all the financial needs or goals.

Simple living from his Vahana

The tiny mouse is represented as the vehicle of Lord Ganesha. It demonstrates the most important lesson of life: Simple living, high thinking. Learn to flourish within means; saving more than spending, avoiding impulsive purchases via instant gratification. Invest wisely empowering to yearn for a better tomorrow with a prospering financial plan.

Riddhi-Siddhi suggests to know the Payback timings

The Lord Ganesha preaching wisdom symbolises that every investment plan is not meant for retirement life, there are various short term goals too. So, understand the need for finance and earn cash from your investment in desired period.

Happy Ganesh Chaturthi!

Green is the New Gold

ESG Investing

The investor has various Permutation and Combinations to build portfolio in which the most common options include a combination of stocks, bonds, and mutual funds. All the investments are based on risk tolerance and financial goals. Now-a-days investors have become more aware and started making more sustainable decisions. ESG investing has become progressively approachable opportunity. ESG investing stands for environmental, social, and governance investing, which anchors on sustainability and the impact on your money. This concept actually comes with an opportunity to utilize investments in a way that aligns with one’s beliefs and core values.

Any investment is said to be an ESG investment depending upon the measure of sustainability across the environmental, social, and governance categories. The measurements are ranked and hence, helps potential investors in regard to portfolio, to make better decision ethically. 

The Environmental Factors determines the green initiatives a venture takes. It considers what a company does to reduce their greenhouse gas emissions and how they use natural resources. It also looks at the product created to calculate sustainability and recycling.

The social components include cells like community involvement and development, comprehensive variegation, balanced employment levels, and impact on local and global human rights.

This Corporate Governance evaluates the mentorship. It compares executive pay and employee pay, cross section and potpourri among the top executives and board members, and the receptivity of the venture to their stakeholders.

ESG is important for successful long-term investments, diversification is must. ESG investing is a stupendous way to support acts well for the society, decide acquaint fully related to the environment, and assure equality.

ESG investments have experienced high returns as compared to traditional investments and in some cases, even outperformed. One can cherish his moral or ethical values with growing investments inclusive of low risk with strategic ESG investing.

Last but not the least, ESG investments is termed as Socially Responsible Investing as it promotes sustainability in the environment, workforce, and employment opportunities. 

Interested to get going with ESG investing, Determine Your Approach, research ESG Policies and find the right ESG Investments to park funds.

Understand how each company is scored, what initiatives they follow, explore funding, and know more on their core values and overall morality. With VSRK, gain access to such investment avenues to create a personalized ESG investment plan.

Ethical investing and investing in socially responsible causes are altogether different. The values based on religious, cultural, or environmental beliefs alter desperately every individual, all solidified goals. One has to look upon whether to invest in a company or not that upholds social beliefs but fails in environmental protection.

After understanding the investor’s beliefs, we can help investor finding the right ESG investments, which firms you support.

Savings is Not Always Investing; Investing is Savings with Amazing Returns

Savings is Not Always Investing; Investing is Savings with Amazing Returns

Always been into savings! And now investing for the first time? It can be traumatic, puzzling, and alarming. Campaigning hard earned money requires a basic understanding of financial assets; enough knowledge and confidence to avoid common investing mistakes; and importantly an understating of your investment goals.

By the time you’re ready to start investing, you must have specific goals in mind. Having a concrete goal can help you become more visionary and dedicated to that goal, making it real through regular actions.

One need to first empower themselves with some basic know-how. The Securities and Exchange Commission (SEC) has an eminent handbook for newbie investors which explains basic concepts and difference between the types of investments.

Choosing your first investment

When choosing an investment for the first time, experts say protruding on what one is literate about. If someone does have an expertise, one has slight tilt towards being more comfortable and knowledgeable when making an initial investment. 

If one do not have a specific forte that makes you uncomfortable towards investing and that would make you like many others, no shame in it. Make another key choice and VSRK’s experts and financial analysts can help you actively managing your mutual funds. 

An initial investment should be held for at least a year, in order to avoid short-term capital gains taxes. Avoiding high turnover or excessive trading; cutting costs associated with placing multiple trades, plus their tax implications, are wise or unwise strategies depends upon novice investor’s financial goals.

As per the research done at VSRK, major issues faced by new investors are that they tend to gamble with money that they can’t even afford to lose. Secondly, unaware investors seek out exotic products online. Inverse leveraged funds can be lucrative to triple your investments within no time, but they silently carry risk and are tricky to manage after certain point of time.

We at VSRK won’t allow your first or many investments to drop. Follow VSRK to start small and grow steadily and we will act as a catalyst for your wealth of tomorrow.

WHAT NEXT WHEN MARKET TOUCHES 17K

WHAT NEXT WHEN MARKET TOUCHES 17K

The Indian equity markets have ended on a record high. The 30-share Sensex rose 514 points to end at 57,852 while the 50-pack Nifty settled at 17,234, up 158 points. This has led to many of the readers and investors wondering, what next?

It’s simple really! VSRK has always maintained that successful investing depends more on ‘Time in the market’ as opposed to ‘Timing the market’. While valuations and prices are absolutely significant, it is more important for investors to spend time with high-quality businesses than time their ups and downs. Around 50 stocks that have rallied over 500% in the last few years bear testimony to this.

The questions still remain unanswered: Is the market going to rise further or is it going to fall? One should be a pessimist and wait or cheer up and invest right away?

Waiting for a market correction to start investing would result in a loss of opportunity. This is the only reason why one should get going ASAP. If one will wait for some correction, surely will stay dwell. Therefore, one should invest. Even at a market high, the markets are only going to go higher in the long-term orientation. One can expect a few jerks on the way, but the general market course is going to be largely upward-looking. But remember, Investing should be played for a long-term.

Step #1: Avoid the temptation of booking profits!

Equity as an asset class is habitual of giving superior returns in the long term due to the power of compounding. VSRK insists & helps in cutting the losses short and riding on winners. This selling rule is deeply embedded in our policy. You should always have an investment plan and remain disciplined.

Step #2: Asset allocation is important

The fact remains intact that market volatility affects your portfolio’s asset allocation. It could be possible that your portfolio is composed only of small-cap or mid-cap stocks. In up trending market, a concentrated portfolio may increase chances of loses. One should diversify when the markets are really high. Diversification means flexible market capitalization. The best way to keep your portfolio up to date is by utilizing an active investment strategy such as VSRK.

Step #3: Get rid of under-performing investments

When you initially constructed a portfolio, markets must have been quite different. Now that considerable time has elapsed, chances are that the valuations have changed. The reasons that made you buy those particular stocks might no longer exist. The market leaders might have changed ranks. In such a situation, sticking to laggards can result in losses. So, use this time to review your entire portfolio and weed out stocks that don’t seem valuable anymore.

Step #4: Invest according to a proven investment strategy

It is rightly said that a plan without a strategy is merely a vision. Investing in accordance with a strategy can help you achieve your various financial goals and understanding your risk appetite will keep you away from making impulsive or ill-informed investment decisions based on greed and fear. VSRK is a smart investment strategy that is complete with selling rules and can help you invest in accordance with your risk appetite.

Step #5: Consult your Investment Advisor

The art of investing includes doing the basics of investing right i.e. knowing how much to invest for your goals, where to invest, understanding your risk appetite, proper asset allocation and re-balancing, investing systematically and remaining disciplined in your plan irrespective of market conditions.

An investment advisor can not only help you understand your financial objectives but will also help you curate your equity portfolio in order to achieve those objectives. An advisor will act as a guiding light in navigating your way through the volatility of financial markets.

All said and done, market highs and market lows shall come and go. The volatility shouldn’t bother long-term investors. You should always aim to keep an eye on your goals and invest in a systematic manner. VSRK would be delighted to assist you in your investment journey so that you can fulfil all your financial goals.

Withdraw Tax-efficient Happiness Post Retirement

Withdraw Tax-efficient Happiness Post Retirement

Everyone has to retire one day. Some people retire at an early age or some retire at their death bed. Let’s directly switch on a product which will give not only income after retirement but also will help tax planning.

Systematic Withdrawal Plan is a facility for regular cash flow with the help of mutual funds. It gives the investor, the freedom to enjoy life one has always dreamt of post retirement. One can withdraw funds from existing mutual fund outlays at pre-set interludes, be it fortnightly, monthly, quarterly or even annually, which will create a regular cash flow for both certain and uncertain needs. One can plan investments and withdrawals with tax advantage. It gives an investor more potential to gain rewards over a span of time, as one withdraws happiness bit by bit.

A Systematic Withdrawal Plan is a divesture strategy that empowers one to redeem fund units in a planned mannerism, instead of a lump sum sale. Constructively, one can withdraw investments in parts, thereby spawning a rhythmic stream of inflows.

An SWP is the antipodal of a Systematic Investment Plan, wherein one invests in mutual funds in parts. Moving funds from savings to a better performing mutual fund scheme is a SIP, while in an SWP, the movement of funds is back into savings account from already made investments. Alike, investing in mutual funds is easy on the VSRK app, withdrawals are also simple and straightforward on the app.

To execute an SWP, one need to withdraw some part of your investment at periodic intervals. Withdrawal money from investment means selling off or redeeming a chunk of the units one holds. The number of units to be sold depends on the NAV on the date one makes the withdrawal.

The period to start SWPs from one’s own funds need to be conceived well in advance to get the complete benefits. It is advisable not to go for SWP in two conditions, first is when one has cash at hand or when markets begins its downtrend. During such times, one should put money to work to achieve preset goals of wealth creation.

Retirement, the phase of life when incoming paychecks halts, is considered as a favorable time to start an SWP. 

SWP acts as a rewards of the systematic investments made during working years. People generally ask a very complicated question that for how long the SWP will last? Ultimately the length of SWP is determined by two main factors. The first is the size of the corpus and the withdrawal amount is the second one. Principally, the progressive the frequency and amount pulled out, the swifter will be the rate of abatement of the corpus.

The uptrend performance of the markets are directly proportionate to milking higher amounts through SWP. Contrarily, if markets are showing downtrend, the radius of SWP may dwindle. Making systematic withdrawals using an SWP allows you to take advantage of rupee cost averaging. 

Tax implications of SWP

When any investor makes withdrawals via SWP, it allures taxes based on type of scheme. The tax incidence on SWP depends on FIFO method and the holding period.

SWP initiated from an equity fund in the 1st year of investment, it is coined as STCG. The amount will be taxed at the rate of 15%. Whereas, if initiated after 1 year of investment, it falls under LTCG. Long term capital gains are completely tax-free. We at VSRK always suggests to do an SWP from your equity fund investments upon completion of one year.

Risk averse investors investing in Debt funds shall note that the holding period for debt funds taxation is 3 years. Any SWP initiated from the debt fund within 3 years of investment, it is considered as STCG and when initiated after 3 years of investment, it falls under LTCG which are taxed at 20%. Additionally, you can get the benefit of inflation indexation.

Concluding the words, SWPs can heavily aid in unifying income needs post retirement. In order to achieve the most of blessings, VSRK helps to plan SWP according to your requirements and tax incidence.

How to Invest without Knowing the ABC’s of Investing ?

How to invest without knowing the ABC’s of investing

Calm down, you are not alone, in the universe who is so uncomfortable with investing money in today’s glowing market. Like many other individuals, still following traditional methods of savings even when many of us there are becoming successfully wealthy in the market. Well, let’s discuss how to cope up with the fear for trading the new transparent and amazing products blossoming in the ocean of financial markets today.

The fear of entering the new world of commerce at any course of your investment life, can immensely affect one’s investment choice. Investing is scary because returns aren’t guaranteed. Hesitant investors following the psychological approach of the fear of losing money in the stock market. 

People prefer avert losing anything they possess, relatively take a risk to make a big fortune. It’s human to hate losing more than liking to win, and hence, psychology says to ‘play it safe’ when it comes to monetary. Fear is keeping people outside the investment world and potentially away from reaching their long-term financial goals. 

We agree that the investing world is cluttered with technical terms and difficult jargons. To remove this hesitation, VSRK brings to you accessible tools and hands on expertise to help you understand the basics, decode the difficulties and make informed decisions. 

The market is based on the sure shot formula of “taking the right decision at the right time”. One can certainly earn a good return out of the investments made with correct decisions at the perfect time. Saving early and investing regularly is vital key to financial security and reaping success. More likely to afraid to invest money increases the possibility of losing the track on profits from the market.

VSRK firmly believes that before investing your money into the market, we make sure that the investor should understand the detailing about the market as per your financial goals and targets. 

VSRK provides required beneficial market tips about why and where money is invested. So, seek help to invest your money wisely. Beware of the fraudulence or fake guides & suggestions.
The more you know, the better you’ll feel about investing.
Bottom line, investing your money in market is a rewarding way to grow your wealth over time than using a traditional, low-interest savings schemes. And that’s why we are here to guide you with our experts. From dreaming about buying a car to retirement planning to planning a dream vacation or buying a home all need funds. And someone has said that “It takes money to make money”. 
You are investing but do not realize it. Your fixed deposits or post offices saving are further invested somewhere for a good return but you are getting fixed meagre interest. Many have the tendency to think that only rich people can invest. No, you just need to have some money to invest. With VSRK application, you can start with as low as little as Rs. 1000 per month.

One should avoid to get scared from unfamiliar terms. The financial assets are risky but they tend to outperform most of the time in long run. I always tell new investors, “Risk and return are married, and they’re never going to get divorced”. There is no return without risk. Bonds on the other hand are less risky investments than stocks.

Don’t square off to mingle investing and gambling at same level, think again. When you put your money in a range of different investments say in a mutual fund or an index fund, which hold many different individual stocks one can reduce the risk of losing money.

The fact is investing doesn’t makes anyone rich overnight. Just as food takes time to cook well, similarly investment takes time to grow into wealth. A common saying is that it’s about time in the market, not timing the market. In other words, over time, your money grows when you invest it.

VSRK’s experts helps you diversify your hard earned finances across different investment among many sectors which mitigates risk. The markets have both good and bad days. We don’t react impulsively but act wisely to extract the potential rebound of the market.

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