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 But up to what extent and proportion of the investment could be withdrawn.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.

What Is the Debt-Snowball Method?

Debt Snowball Method

Legendary investor, Warren Buffet has called the power of compounding- the eighth wonder of the world. Compounding is the process in which an asset’s earnings are reinvested to generate additional earnings over time. This return can be in the form of interest, dividend or capital gains. Compounding can be explained as interest on interest- the effect of which is to magnify returns to interest over time, this is also known as the “miracle of compounding”. This can very well be understood by the example of a snowball.

Have you thought what happens when you push a small snowball down a hill? When you push it down a hill, it continuously picks up more snow. By the time it reaches the bottom of the hill it is a giant snow boulder. While falling downhill it gets bigger with every revolution. The same happens with money, if you invest INR 100 for 2 years at 10% compound interest p.a., at the end of 1st year you have INR 110. Now, for the second year, the whole INR 110 is reinvested. So you get interest in this INR 110. Therefore, you get INR 121 at the end of the second year.

It is not a secret anymore that you can grow the money you save by investing it to earn a return. You can make your money grow faster if you reinvest the returns along with the principle amount. Various investments like savings accounts, fixed deposits, recurring deposits and bonds pay interest. Such investments provide you with clarity as exactly how much money you’re going to earn. Here, you still benefit from compounding by reinvesting your earnings on other investments, like stocks, mutual funds and exchange-traded funds.
Additionally, Rule 72 is a highly used method for understanding the application of the power of compounding. It is a technique to identify at what period would a particular sum of money double it at a given rate of interest. It requires you to divide the number 72 by the rate of interest. For example- if you invest a sum of money in a fixed deposit at an interest rate of 8% p.a. it would take 9 years for you to double the amount (72/8).

Why in Investment in Latest Performing Mutual Funds a Progressive Choice?

Performing Mutual Funds
Modern Case Scenario
In this modern world of Investing, people like Warren Buffet and Geraldine Weiss, who are considered as legendary investors, have always advised not to depend on any single source of income and have continuously warned the world about the catastrophic results which over-dependence on any one source of earning can cause. In the past, we have seen scenarios such as the case of Jet airways where a huge group of people were retrenched and lost their jobs. Situations such as these have a major impact on the lives of those affected and their mere existence is often threatened due to lack of finance to support their needs and their families, coercing them to be indebted or forcing them to sell their precious possessions. This is why advisors usually recommend their clients to create a second source of income i.e. investment.
Investing in Mutual Funds
When we think about investment, the rate of return on investment is the first thing that strikes our brain and the risk factor, along with ROI, is one of the most important elements in making any investment decision. Now, the real question arises as to where should this money be invested into, many of the secured securities such as fixed deposit, bonds usually have a low rate of return accompanied with lesser risk and the securities with a higher rate of return such as shares of a company have a much higher risk component, thereby demonstrating the positive relationship between the risk factors and the gain. Here finding the right balance between the element of risk and adequate rate of return is very essential.

For people who wish to play on the safer side usually invest in debt securities and bonds, whereas people with higher risk appetite usually invest in equities. However, for investors who want to have a comparatively higher return than debt but want moderate risk, are often advised to invest in the latest performing mutual funds. The level of risk in a mutual fund depends on what it invests in. Mutual funds are said to be riskier than bonds but earn more returns on the investment.

So, till here we know that mutual fund is one of the best ways to get good returns on our investments by taking moderate risks. But, knowing how to invest in the best performing mutual funds could be a real hassle for common businessmen and investors.
We, at VSRK wealth creator, are committed to solve all your queries regarding investment and help you to decide the best Investment and course of action for your Wealth Management.
How we can help?
VSRK Wealth Creator is one of the best-known names amongst the leading financial consultants in Delhi. When you opt for our professional services, your investments in mutual funds are operated by our dedicated team of portfolio managers working devotedly along with our with specialized investment research team, to enhance your income on amount invested by allocating the funds into an enormous pool of securities in order to decrease the overall risk to
the minimum level possible and thereby providing you with high returns as well as comparatively low risks.
Being a financial consultant in Delhi, for the past decades, enables our experts to prudently examine various companies, their performances & growth, and after exhaustive analysis of all the necessary factors and elements select the best alternative, amongst the available investment option which is aptly suited to achieve the objective of wealth maximization.
Why Mutual Fund?
We believe in the golden investment adages such as “do not put all your eggs in one basket” and “never test the depth of river with both legs”. Investments in the leading performing mutual funds enable the users to be benefited from the diversification of the amount of investment into various alternatives. Such benefits of diversification were traditionally, available to High Net -worth Individuals (HNIs) who had large amounts to be invested, however investing in the best performing mutual funds provides the investors with such benefits of diversification, and also gives you an opportunity to invest with fewer funds as compared to other avenues in the capital market.
While on one hand wealth is being created, on another hand provides us with an option to en- cash our investment immediately. This helps us to maintain high cash liquidity, which is generally missing in most of the securities such as bonds and fixed deposits and might be of great help in emergencies. Along with all these benefits, the investors can choose from a large list of options to invest in, whether it is in a blue chip company, bond or any other security.
So, it can be concluded that best performing mutual funds are a great source for wealth creation, which provides the investors with comparatively high returns, moderate risks, high liquidity and a diversified option of securities to invest in.