Skip to main content

Time to Review your Portfolio

Invest In Tax Saving Mutual Funds Online

Call 0 94 8300 8300 (India)

 



Several things have happened in the past few days and weeks that changed the investment climate significantly for the retail investor. Firstly, the US Fed has announced a tapering of its bond buying programme which could see risk- assets being impacted. Secondly, the bond market has seen its biggest turmoil in years, especially when liquid funds gave negative returns for a week, showing that theres no free lunch even in simple debt investments. Thirdly, equity markets have hit all- time highs, even in a slowing economy, thereby surprising experts.

 

Not surprisingly, many retail portfolios may have not moved as planned. But whether you had a good year or not, the way forward is to review what went right or wrong with your portfolio, and then rejig your portfolio to make the best of 2014.

The on set of tax- free bonds and soon- to- happen launch of inflationlinked bonds are other good triggers to revisit your portfolio. A tax- free yield of more than 8.5 per cent a year is mouth- watering. This is even better than the Public Provident Fund, or POMIS for that matter. These have risks attached, though they are low. The two issues of tax- free bonds currently available are of The Housing and Urban Development Corp (Hudco) and India Infrastructure Finance (IIFCL). Both have interest coupons ranging from 8.6 to 9 per cent. Although tax- free bonds are a good investment option for high returns, there is no easy way to redeem them as they are low on liquidity.

Though investments such as these are tempting, one should keep the liquidity disadvantage in mind before investing in them for longer periods.

Real estate has been going through a dull phase for quite some time now. Across the country distress sales are the norm in the real estate market. Delivery delays and correction in property rates are prevalent across several micro- markets.

Investors are neither seeing capital appreciation nor rental yields as delivery delays have impacted the under- construction property market. Ready properties have lower yields.

A recent study showed that many people who invested in debt markets because of its good performance in the last few years have lately not seen apositive real rate of return given the high degree of inflation in the country.

Equity funds on the other hand have shown greater potential and given good returns this year.

Given so many triggers to review one’s investments, how can one best utilise the present moment to stay on course amidst volatility? One proven technique is portfolio rebalancing. This involves reviewing and revising the composition of a portfolio, that is, one’s asset mix. One of the approaches to rebalancing a portfolio is called the constant- mix approach. This calls for maintaining the proportions of one’s investments with their target/ set figures.

Let’s say after working with your financial advisor you have chosen to keep 30 per cent in diversified equity funds, 40 per cent in fixed income assets, 10 per cent in gold ETFs, and 20 per cent in cash. The reasons for arriving at these figures may be several, but assume the proportions are determined according to the investment approach designed together with your financial advisor. If the markets show upward or downward movements, an investor has to periodically rebalance a portfolio to restore the target proportion (asset mix).

If one’s equity investments to purchase An a ‘contrarian’. Rebalancing leads to capitalising opportunities and cutting your losses, as well. For example, tax- free bonds are a good opportunity for investors looking to invest and save tax on the interest they earn. Senior citizens looking for regular income during retirement may allocate adecent portion to them.

One must realise that certain costs come with rebalancing a portfolio.

Every time one rebalances, one has not only to pay transaction charges but also taxes. Portfolio rebalancing should only be done when an investor feels that the market situation has altered. One can also decide on time- based rebalancing where an investor conducts the rebalancing exercise after a set interval.

A financial advisor is the best person to guide you on rebalancing your portfolio as s/ he would have good knowledge of market volatility, upcoming products, taxable gains and macroeconomic indicators likely to impact one’s portfolio

Happy Investing!!

We can help. Call 0 94 8300 8300 (India)

Leave your comment with mail ID and we will answer them

OR

You can write back to us at PrajnaCapital [at] Gmail [dot] Com

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

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

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

Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Birla Sun Life Front Line Equity Fund
    2. Large and Midcap Funds Invest Online
      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
    1. Mid and SmallCap Funds Invest Online
      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
    1. Small and MicroCap Funds Invest Online
      1. DSP BlackRock MicroCap Fund
    1. Sector Funds Invest Online
      1. Reliance Banking Fund
      2. Reliance Banking Fund
    1. Tax Saver MutualFunds Invest Online
      1. ICICI Prudential Tax Plan
      2. HDFC Taxsaver
      3. DSP BlackRock Tax Saver Fund
      4. Reliance Tax Saver (ELSS) Fund
    2. Gold Mutual Funds Invest Online
      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund

Popular posts from this blog

All about "Derivatives"

What are derivatives? Derivatives are financial instruments, which as the name suggests, derive their value from another asset — called the underlying. What are the typical underlying assets? Any asset, whose price is dynamic, probably has a derivative contract today. The most popular ones being stocks, indices, precious metals, commodities, agro products, currencies, etc. Why were they invented? In an increasingly dynamic world, prices of virtually all assets keep changing, thereby exposing participants to price risks. Hence, derivatives were invented to negate these price fluctuations. For example, a wheat farmer expects to sell his crop at the current price of Rs 10/kg and make profits of Rs 2/kg. But, by the time his crop is ready, the price of wheat may have gone down to Rs 5/kg, making him sell his crop at a loss of Rs 3/kg. In order to avoid this, he may enter into a forward contract, agreeing to sell wheat at Rs 10/ kg, right at the outset. So, even if the price of wheat falls ...
Read more

SBI bonds FAQ

  Maximum retail subscription and over – subscription There is a lot of excitement around these bonds, so I won't be surprised if they get over-subscribed on the first day itself. So, I thought Sameer asked a very good question about over-subscription. Here is that discussion. Here are some other questions that you may find useful. Can I trade the SBI bonds on NSE after it lists? Yes, these can be traded after listing. Where can I get the application forms, and can I buy the bonds online? You can get the application from notified branches, and then fill it up there and submit it. To the best of my knowledge, there is no way to invest in them online, but if anyone knows otherwise then please leave a message, and let us know. Can NRIs apply for these bonds? NRIs can't apply for these bonds as they fall under one of the ineligible categories. Can you take a loan by keeping the SBI bonds as security? The terms of the issue in the prospectus state that the bank shall no...
Read more

ICICI Prudential Balanced Fund

 ICICI Prudential Balanced Fund scheme seeks to generate long-term capital appreciation and current income by investing in a portfolio that is investing in equities and related securities as well as fixed income and money market securities. The approximate allocation to equity would be in the range of 60-80 per cent with a minimum of 51 per cent, and the approximate debt allocation is 40-49 per cent, with a minimum of 20 per cent. An impressive show in the last couple of years has propelled this fund from a three-star to a four-star rating. The fund has traditionally featured a high equity allocation, hovering at well over 70 per cent, which is higher than the allocations of the peers. But in the last one year, the allocation has been moderated from 78-79 per cent levels to 66-67 per cent of the portfolio. ICICI Prudential Balanced Fund appears to practise some degree of tactical allocation based on market valuations. Within equities, well over two-thirds of the allocation is parked i...
Read more

Fortis Mutual Fund

Fortis Mutual Fund, a relatively new player, it is still to prove its case and define its position in the industry. In September 2004, it came onto the scene with a bang - three debt schemes, one MIP and one diversified equity scheme. And investors flocked to it. Going by the standards at that time, it had a great start in terms of garnering money. Mopping up over Rs 2,000 crore in five schemes was not bad at all. The fund house has not been too successful in the equity arena, in terms of assets. Though it has seven equity schemes, it is debt and cash funds that corner the major portion of the assets. Most of the schemes are pretty new, and the two that have been around for a while have a 3-star rating each. The last two were Fortis Sustainable Development (April 2007), which received a rather poor response, and Fortis China India (October 2007). Fortis Flexi Debt has been one of the better performing funds, after a dismal performance in 2005. It currently has a 5-star rating. None ...
Read more

Equity investors should track market developments

The stock markets have been volatile over the last few days. They are in a sideways movement and trying to find the bottom after a fall of 20 percent a week ago. The market sentiments are not very positive at the moment and the recent developments are expected to dampen them further. Globally, governments and central banks are trying to cut rates and announce packages to improve business sentiments. These are some of the major developments in the markets last few month: A) Global On the global front, another large US bank went into a financial crisis. The US government took quick measures to avoid the spread negative sentiments in the markets. The US government announced a bail-out package and agreed to shoulder the losses on the bank's risky assets. China announced a large cut in interest rates and reserve ratio to boost the investor sentiments in the markets. Recently, the World Bank announced China's growth rate next year will come down to 7.5 percent. The European ...
Read more
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