risk appetite Archives - VSRK Capital

October 7, 2021August 18, 2023

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

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

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

September 27, 2021August 18, 2023

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.

September 6, 2021August 18, 2023

Difference Between Stocks and Mutual Funds

As the red blood cells contain hemoglobin and transport oxygen. Similarly, the stocks supplies funds to the market for their capitalization. White Blood cells protect the body from infections. Similarly, Mutual Funds protects the market from downfall. Both Mutual funds and stocks are very distinct concepts and prospective the new investor clan often confound these to be similar. If anyone is prospective about the financial market entrance, he/ she has these options to put their funds in. One can choose to park their in equities straightforwardly through the stock market or one can choose the other way out of investing in equities through the mode of mutual funds.

“All the Financial Market’s a body,

The Finance’s a blood,

And all the mutual funds and stocks merely white and red blood cells.”

Shares or stocks are floated by the corporates through Initial Public Offer to raise money for expansion and other operations. The stocks are bought or sold through a trading account. Depending on future goals, any investor invests in ventures by buying their stocks for some period. The investor gets the benefit in the form of enhancement of value of the stock.

Mutual funds are an investment vehicle that pools money from different investors and invest in various assets such as equities, bonds, money market, currencies, derivatives etc. These investment are managed professionally. One can invest in the mutual funds either in the lump sum mode or the SIP mode. The returns generated on mutual funds are distributed in proportion of the units held by the investor.

Difference between Shares and Mutual Funds

In mutual funds, the funds are pooled by the team of professionals and invested in the securities of different companies. It leads to diversification of investment. This type of assortment is not possible with the investment in stocks directly.

Investing directly in shares is a tedious responsibility as a lot of analysis of a venture is to be done, say finding the price worth or future prospects etc. The professional research is done in Mutual funds before investing.

Investing in shares of a firm, investor becomes a part of their growth story and will get dividends as the company performs well. Investing in Mutual funds, purchasing the units, investor is connected to the average growth or progress of all the ventures involved.

Investing in shares exposes to the risk of the particular company, hence it’s more risky. Whereas in mutual funds, the risk is mitigated with the help of bouquet of diverse stocks.

Investing in shares requires good research of the companies which is time consuming. Contrarily, mutual fund has easiness and simplicity attached to it. Because they are maintained by the fund managers.

The basic requirement to invest in shares is Demat Account for the purchase or sale of securities in the Indian financial market. One can invest in Mutual funds directly.

Mutual funds gives higher returns if invested for a longer period of time. With the right strategy of buying, selling or holding any stock, one can earn high in short period as well.

Trading in shares involves brokerage whereas mutual fund investment includes management fees, entry load, exit load, etc.

What to choose?

A common dilemma which all the prospective investors have, is to choose which one is the better. The fact remains that both these avenues are distinctive from each other. One must choose which suits risk appetite and financial goals. Check your risk appetite at VSRK and our executives will help you take the right investment decision.
Therefore, selecting any justified investment will be based on individual’s preference, financial goal and style of investment.

Conclusion

Every investment avenue is favorable in its own way. If selection is puzzling, one is free to contact VSRK. Our professionals help you in selecting the best mutual funds for investment. In addition, you can open a Demat account with us and invest in shares on the basis of our regular research reports.

Disclaimer: Investment in securities market / Mutual Funds are subject to market risks, read all the related documents carefully before investing

September 4, 2021August 18, 2023

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.

February 5, 2021August 19, 2023

5 Things You Should Know Before You Start Investing

Investment is not a one-step process but an entire series of steps taken to reach the financial goal. It encompasses making various financial decisions and finding the right investment alternative while minimizing any associated risks. Investing is affected by a large number of factors, so it is crucial to keep in mind some financial aspects. Today we will talk about five things you should consider before you leap.

Know Your Investment Goals
Every person who is desirous of investing should have a stated purpose of investment. It could be anything like buying a house, new car, child education and marriage or planning retirement. You should know what you want to save your money for and especially how much you want to save. Your investment goals are a crucial factor to decide the investment alternatives.

Know Your Financial Condition
Any investor, whether she is a billionaire or a new associate in a law firm, has some financial limitations. It is necessary to know how much would you be able to invest in the said period of investment. The purpose of investing funds would be to generate sufficient returns to help you achieve your financial goals, whatever they are. So, it is necessary to know how much investment you would be able to support and where you can cut corners.

Know the Importance of Emergency Funds
One of the main reasons why investments fail is that people consider their investment as emergency funds. However, this is never the case. For example, when you start a fund for buying a new house, then that money is being kept aside for buying that new house only. Now, what people do is that whenever they face any financial emergency, they break these funds, thereby hampering the investment cycle. Such acts lead to lower accumulated wealth. These emergencies, as the name suggests sprung anytime and you have no control over them. So, it is always advisable to consider an emergency fund. It would safeguard you in case of any mishap.

Know Your Asset Allocation
There are various investment avenues available in the market. You can invest in precious metals like gold & silver, stocks, bonds, mutual funds, real estate or a combination of all of the above. You may or may not want to invest in all of them. Each of them has its risks, rewards and characteristics. Therefore, you should be well aware of the investment avenues you have selected. Knowing each kind of investment avenue helps you to create a diversified portfolio and enhances your chances to reach your financial goals.

Know Your Risk Appetite
When someone wants to invest his money, there are majorly only two things in his mind. First is the reward and second is the associated risk of investment into that avenue. Every person has a different risk appetite depending upon his age, financial situation, priorities, etc. You should identify the level of risk you are willing to take to achieve your financial goals. This factor is one of the main aspects when you choose your investment avenues. People who have a high-risk appetite go for equity funds; they are risky but give good returns to its investors. Debt mutual funds are safer but provide low returns and are suitable for people with low-risk appetite. Hybrid mutual funds are known to yield better returns than debt funds and are less risky than equity funds, so they are suitable for moderate risk-takers.

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Tag: risk appetite

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

I for IPL or I for Investments

5 Things You Should Know Before You Start Investing

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