Investors Knowledge

From where do you get the vegetables for dinner? Do you grow them in your backyard, or purchase it from the nearest mandi/supermarket depending on what you need? Growing your own veggies is a great way of eating healthy food, but effort is spent on seed selection, manuring, watering, pest control, etc. The latter option allows you to choose from a wide variety without the hard work. Similarly, you can create wealth by investing directly in shares of good companies or invest in them through Mutual Funds. Wealth can be created when we buy company stocks which use our money to grow their business, creating value for us. Direct investment in shares carries a relatively higher risk element. You need to pick stocks by researching the company and sector. It’s a humongous task to choose few companies from thousands of them listed on the stock exchange. Once done, you need to keep a track of every stock's performance. In Mutual Funds, the stock picking is done by expert fund managers. You n...

Various types of Mutual Fund schemes exist to cater to different needs of different people. Largely there are three types of mutual funds. Equity  or  Growth Funds These invest predominantly in equities i.e., shares of companies The primary objective is  wealth creation  or  capital appreciation . They have the potential to generate higher return and are best for long term investments. Examples would be “Large Cap” funds which invest predominantly in companies that run large established business “ Mid Cap funds ” which invest in mid-sized companies. funds which invest in mid-sized companies. “Small Cap” funds that invest in small sized companies “ Multi Cap ” funds that invest in a mix of large, mid and small sized companies. “Sector” funds that invest in companies that are related to one type of business. For e.g., Technology funds that invest only in technology companies “Thematic” funds that invest in a common theme. For e.g., Infrastructu...

To many people, Mutual Funds can seem complicated or intimidating. We are going to try and simplify it for you at its very basic level. Essentially, the money pooled in by a large number of people (or investors) is what makes up a Mutual Fund. This fund is managed by a professional fund manager. It is a trust that collects money from a number of investors who share a common investment objective. Then, it invests the money in equities, bonds, money market instruments and/or other securities. Each investor owns units, which represent a portion of the holdings of the fund. The income/gains generated from this collective investment is distributed proportionately amongst the investors after deducting certain expenses, by calculating a scheme’s “Net Asset Value or NAV. Simply put, a Mutual Fund is one of the most viable investment options for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost.

The Reserve Bank of India's monetary policy committee (MPC) on December 7 hiked the key repo rate by 35 basis points (bps) to 6.25 % in its last meeting of 2022, continuing its fight against inflation. Repo is the rate at which the central bank lends short-term funds to banks. One basis point is one-hundredth of a percentage point. The MPC has been on a rate hike course throughout the year, increasing policy rates by nearly two percentage points to fight inflation. Retail inflation has remained above the central bank's comfort level for nearly the entire year. By law, the MPC is required to keep inflation within the 2-6 percent band. As it failed to meet that mandate, the panel met in November early November to write a letter explaining its failure and the steps it planned to take to cool prices. This is the first time since the MPC was set up in 2016 that such a letter had to be drafted. The MPC decision to hike rates came in the backdrop of stubbornly high inflation, which ha...