Skip to main content

Value Investing

Tax Saving Mutual Funds Online

Current open Infra Bond Application form

 

   There is a heated debate going on amidst the investor community on whether the domestic stock markets will fall further or not. Many analysts who were optimistic till a few months ago have now thrown in the towel. The sign of decline in the domestic macroeconomic environment has disappointed even the most optimistic investor.


   There is a sense of resignation that the stock markets will do nothing for sometime or worse may fall further. Which ever side of the debate one belongs to, the common opinion is that most stocks listed in the stock markets are available at mouth-watering valuations.

Best time for value investing    

The question that then arises is should investors pick up some stocks at the current valuations knowing fully well that their stocks can have some downside if the markets correct. The answer obviously is yes.


   Long-term or value investors with an ability to withstand some erosion in the nominal value of their portfolios should probably start investing is a staggered fashion in their favourite stocks.

Become a value investor    

Value investors rely on fundamental analysis for stock picking. Some of the world's best-known investors use fundamental analysis to choose stocks. Fundamental analysis implies understanding the company thoroughly by dissecting its past performance and on that basis trying to predict its future performance, and its stock price.


   Analysing a company's financial and operational data is indeed a time consuming long-drawn process. An easier way to understand a company would be to focus on its numbers. A company's financial numbers - earnings per share (EPS) and price to earnings ratio - can help an investor short list stocks that are worth looking at for value investing.
   

Some of the metrics that can help an investor pick stocks are:


P/E ratio    

This is a valuation ratio of a company's current share price as compared to its per share earnings. A higher price-to-earnings (P/E) ratio indicates that you are paying more for the company in anticipation of high growth. This can work both ways.
   If the investors' expectations are not met the stock price can come down sharply. Hence, a value investor goes for stocks that have lower P/E, indicating that the stock in underpriced in comparison to its performance. Today, most blue-chip companies in the domestic stock markets are quoting at lower P/E ratios.

Dividend yield    

A stock's dividend yield is expressed as an annual percentage and is calculated as the company's annual cash dividend per share divided by the current price of the stock. Ideally, a higher dividend yield indicates safety.


   Income investors value a dividend-paying stock, while growth investors have little interest in dividends. Value investors, on the other hand, look out for high dividend yields in a stock as a measure of safety.

Low debt    

Debt and equity financing are two different financial strategies adopted by a company. Debt means borrowing money for business needs. Equity shows the extent of stakeholders' cash in a company. A higher debt in a company is a danger sign because in tough times like these the company could have trouble repaying it.


   Value investors prefer companies with low debt as such a company is a safe one to invest in.

Free cash flow    

A company's earnings almost never equal the amount of cash it brings in. Companies report their financials using accounting principles, leading to a mismatch in the reported profits and actual cash a company has generated. So, while a company could be reporting a huge profit it could be making very little cash.
   Therefore, it may be a good idea to look for companies with a positive free cash flow. As with the debt-equity ratio, this metric gains significance in tough times.

Returns on capital    

Returns on capital employed (ROCE) is the rate of returns a business is making on the total capital employed in the business. Capital will include all sources of funding (shareholders' funds and debt). Ideally higher the ratio the better it is.


   This ratio indicates how well a company is using its capital. It makes sense to use this ratio on companies along with their peers to get the correct picture.

Qualitative factors    

Stock picking cannot be done on the basis of ratios alone. Qualitative factors such as management matter in a company's valuation. The ratios mentioned are good starting points to identify stocks that are fundamentally-strong for longterm investing. They can start you off on a journey to discover stocks that could be multi-baggers in your portfolio.

---------------------------------------------

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

  1. HDFC TaxSaver
  2. ICICI Prudential Tax Plan
  3. DSP BlackRock Tax Saver Fund
  4. Birla Sun Life Tax Relief '96
  5. Reliance Tax Saver (ELSS) Fund
  6. IDFC Tax Advantage (ELSS) Fund
  7. SBI Magnum Tax Gain Scheme 1993
  8. Sundaram Tax Saver

---------------------------------------------

Application form for Tax Saving Infrastructure Bond and more information

Current open Infra Bond Application form

Submit filled up application Collection canter near you

Popular posts from this blog

National Savings Certificate

National Savings Certificate Here's everything you need to know about the 5-year savings scheme offered by the Government This is a 5-year small savings scheme of the government. From 1 July 2016, a National Savings Certificate (NSC) can be held in the electronic mode too. Physical pre-printed NSC certificates have been discontinued and replaced with Public Provident Fund-like passbooks. What's on offer The minimum amount you can invest in them is Rs100 and there is no upper limit. Under this scheme, all deposits up to Rs1.5 lakh qualify for deduction under section 80C of the Income-tax Act, 1961. The interest earned is taxable. You can invest in multiples of Rs 100. These certificates can be owned individually, jointly and also on behalf of minors. The interest rates for all small savings schemes are released on a quarterly basis. The effective rate for NSC from 1 October to 31 December is 8%. The interest is calculated on an annual compounding basis and is given along w...

Am you Required to E-file Tax Return?

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   Am I Required to 'E-file' My Return? Yes, under the law you are required to e-file your return if your income for the year is Rs. 500,000 or more. Even if you are not required to e-file your return, it is advisable to do so for the following benefits: i) E-filing is environment friendly. ii) E-filing ensures certain validations before the return is filed. Therefore, e-returns are more accurate than the paper returns. iii) E-returns are processed faster than the paper returns. iv) E-filing can be done from the comfort of home/office and you do not have to stand in queue to e-file. v) E-returns can be accessed anytime from the tax department's e-filing portal. For further information contact Prajna Capit...

Mutual Fund Review: HDFC Index Sensex Plus

  In terms of size, HDFC Index Sensex Plus may be one of the smallest offerings from the HDFC stable. But that has not dampened its show, which has beaten the Sensex by a mile in overall returns   HDFC Index Sensex Plus is a passively managed diversified equity scheme with Sensex as its benchmark index. The fund also invests a small proportion of its equity portfolio in non-Sensex scrips. The scheme cannot boast of an impressive size and is one of the smallest in the HDFC basket with assets under management (AUM) of less than 60 crore. PERFORMANCE: Being passively managed and portfolio aligned to that of the benchmark, the performance of the index fund is expected to follow that of the benchmark and in this respect, it has not disappointed investors. Since its launch in July 2002, the fund has outperformed Sensex in overall returns by good margins.    While every 1,000 invested in HDFC Index Sensex Plus in July 2002 is worth 6,130 now, a similar amount invested in Sensex then wo...

Different types of Mutual Funds

You may not be comfortable investing in the stock market. It might not seem like your cup of tea. But you can start by investing in Mutual Funds. Many first-time investors invest in Mutual Funds. This is because they do not know how to invest in individual securities. Basic information on Mutual Funds People invest their money in stocks, bonds, and other securities through Mutual Funds. Each Fund has different schemes with specific objectives. Professional Fund Managers look after these schemes. Your Fund Manager could help you invest in a scheme that suits your financial goal. Functioning of Mutual Funds You could make money through Mutual Funds in different ways. A single Mutual Fund could hold many different stocks, bonds, and debentures. This minimizes the risk by spreading out your investment. You could earn dividends from stocks and interest from bonds. You could also earn capital by selling securities when their price increases. Usually, you could choose to sell your share any t...

IDFC - Long term infrastructure bonds - Tranche 2

IDFC - Long term infrastructure bonds What are infrastructure bonds? In 2010, the government introduced a new section 80CCF under the Income Tax Act, 1961 (" Income Tax Act ") to provide for income tax deductions for subscription to long-term infrastructure bonds and pursuant to that the Central Board of Direct Taxes passed Notification No. 48/2010/F.No.149/84/2010-SO(TPL) dated July 9, 2010. These long term infrastructure bonds offer an additional window of tax deduction of investments up to Rs. 20,000 for the financial year 2010-11. This deduction is over and above the Rs 1 lakh deduction available under sections 80C, 80CCC and 80CCD read with section 80CCE of the Income Tax Act. Infrastructure bonds help in intermediating the retail investor's savings into infrastructure sector directly. Long term infrastructure Bonds by IDFC IDFC issued an earlier tranche of these long term infrastructure bonds on November 12, 2010. This is the second public issue of long-te...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now