Year 2016 – Financial Resolution

Dear readers,

Wish you very happy new year 2016. I pray that this year bring more and more happiness in your life. All of you should achieve financial freedom. I have seen that many person makes many type resolution like quitting alcohol, joining gym, healthy diet etc. Let us talk about financial resolution for this year.

• Set your financial goal on long and short term basis and also set their priority.

• Do not idle your cash in your saving bank account. 4% interest rate don’t beat even inflation and your saving actually shrunk.

• Know your financial product very well before investing in anyone. You should know about risk and return both about the product in which you want to invest.

• Do not ignore your insurance needs. Buy any term insurance plan and disclose all your material fact. It will make claim process easy if and bad event happen. You should have a proper mediclaim policy.

• Make an emergency funds by investing in liquid fund. The amount should be equal to six month salary at least.

• Make your tax planning well ahead. Do not postpone it for last rush. At the time of last date you often make wrong decision in hurry.

If you have doubt about investment product and want more information regarding investment or you need investment services, feel free to ask us. We also conduct the seminar on investment and financial planning. If you are interested for conducting seminar in your city, just drop the mail.

Warm regards,

Arvind Trivedi

Certified Financial Planner

arvind.trivedi79@gmail.com

Simple Saving Boosting Tips

SIMPLE SAVING BOOSTING TIPS

Our country is country of saver not investor. Everyone want save more and more but not able to the same. As cost of living and growing desires of person are big hurdle for saving. For creating wealth one has to save and invest in disciplined manner. By adopting some tips you can increase your saving effectively.

Minimum use of debit and credit card:

These cards are very convenient and easy to use but it also increases your spending dramatically. Due to growing online shopping trend and swipe cards option we often spend more than needed. We purchase those things which we really do not need due to influence of attractive offers and discounts. Adopt cash mode for payment in maximum transaction and try to avoid use your plastic money, it will surely increase your saving. By the end of month, you will be surprised to see your increase in saving.

Keep your money in liquid fund:

It is very good idea to keep your money which you may have need in short notice in liquid mutual fund. There is huge difference between your saving account return and liquid fund return. Your saving bank offers you between 4% to 5 % annual return on your deposit and on other side liquid fund offer almost double return 8% to 9% annual. I always wonder why people do not keep their saving in liquid funds.

Think twice before big purchase:

It would be smart move if you stop and think many times whether you really need it before make a big purchase like, LED TV, Expensive handset, laptop, home etc. Understand the difference between desire and need, it will help you to make smart decision. Try to find out the overall impact of these purchases on your financial plan and you will have more time to find out best product in appropriate rate.

Use ECS or Auto debit facility in investment:

It would be wise to use auto debit from your bank account for investment in mutual fund or paying the insurance premium. In many times we delay our investment plan due to lack of saving but in auto mode there will be forcibly saving happen.

Adopt above mentioned tips for increase your saving. It will sure boost your saving and change your habit of more spending.

If you have doubt about investment product and want more information regarding investment or you need investment services, feel free to ask us. We also conduct the seminar on investment and financial planning. If you are interested for conducting seminar in your city, just drop the mail.

Warm regards,

Arvind Trivedi

Certified Financial Planner

arvind.trivedi79@gmail.com

Debt Fund : Interest rate movement impact

Debt Mutual Fund: Interest rate effect

In India, the reach and awareness of mutual fund is still very low. People do not understand the difference between equity and debt asset class. Investors often consider all type of mutual fund in the same way. Today we will discuss about the impact of interest rate movement on debt mutual fund.

In debt mutual fund, we can divide it into three broad categories liquid fund, FMP and Income fund. Liquid fund has very low volatility and government bonds are very high volatile product in short term. On the basis of historical data of interest rate movement and debt fund return we have arrived on some facts.

Whenever the expectation of interest rate is going towards up then investor should be defensive and should consider liquid fund or FMP fund. The difference between liquid and FMP funds is nothing but the time period. Liquid fund is suitable for short term investment like 1 or 2 months. FMP is for the fixed lock in period investment and do not get affected from interest rate movement at the time of maturity. The only risk in the FMP is opportunity loss if any arises during the investment period.

During the falling interest rate scenario, long term bond investors get benefit. In longer maturity bond portfolio, one term called modified duration play vital role for return generation. For example, two long term duration funds have modified durations 4 year and 7 year. If interest rate moves down 1% then 4 year’s modified duration fund would generate 4% additional return whereas 7 year’s modified duration fund generate 7% additional return. But unfortunately if interest rate goes up 1% then these funds generates negative return according to the modified duration. Exposure in long term bond fund should be taken according to the risk appetite of investors.

If you want more information regarding investment or you have any other query about investment feel free to ask us.

Warm regards,

Arvind Trivedi

Certified Financial Planner

arvind.trivedi79@gmail.com

www.artofinvest.com

www.arvindtrivedicfp.blogspot.in