SIP return beating other instrument..?

SIP return beating other instrument ?

Yes, as I always say that SIP (Systematic Investment Plan) is always good option for investment and create the wealth. You can read today’s Time of India, Mumbai edition on page no. 11 for your belief. Even worst of SIPs would have given you more than your PPF (Public Provident Funds) returns.

Regular investments in mutual fund equity schemes have been rewarding for investors in the last 15 years. Investments in equity schemes done through SIPs have outperformed traditional products such as Tax-saving fixed deposit and PPF.

Tax saving fixed deposits and PPF have returned a little over 9% every year in the last 20 years. Meanwhile, average returns in equity schemes through SIPs- an equivalent of recurring fixed deposits of banks over a 15 years period have been 21.54% every year with the worst performer giving 13.71%.

So I still advise to all of you start a some amount of SIP in equity mutual fund for your 15 -20 years goal like retirement, child education etc. It would be your most prudent investment decision. For more information you can touch with me also.

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

Maggi Controversy: Product Recall Insurance

Maggi row: Product Recall Insurance

After Maggi noodles controversy, insurance companies are getting higher number of inquiries for product call insurance. Product recall insurance comes with as an add on feature with product liability cover. Insurance companies recommend this cover to manufacturers because, besides covering the cost of recall, it is seen as feature that limits product liability.

In India, the most significant instance of product liability in the food industry happened in 2003 when chocolate maker Cadbury faced charges of infestation. This incident caused huge losses to Cadbury and compelled the company to redesign its packaging.

However, even after that incident, demand of product liability cover did not pick up significantly. It would be good if company have product recall insurance as presence of toxic substances is not the only reason for product recall.

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

Falling Gold Prices!!!

Look at Gold Prices

Dear investor look at gold prices, you can read in my old blogs. I have many times suggested that gold is not good investment avenue for wealth creation. Gold plunged 4 percent on Monday to its lowest level in more than 5 year.

It was sudden, massive drop for gold as they breached critical support levels as on growing expectation that the US Federal Reserve will hike interest rate this year. I am again saying here please do your asset allocation according to your need and investment period. Gold is very good for hedging but it is not very good investment option in long run.

In India, people are mad about gold purchase regardless price and return. So I advise to my Indian investor that they should keep gold as much they need for holy occasion and events and do not buy it for investment purpose.

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

Direct Equity v/s Equity Mutual Fund

Direct Equity v/s Equity Mutual Fund

I have seen many investors have often not sure whether they should invest in direct equity or invest in equity mutual fund. According to me, both are good instrument to create wealth in long term but both have different type of risk. We will discuss here about these instrument today.

Direct Equity:

Investing in direct equity is suited for those investors who have plenty of time and understanding of finances of companies. It is very good for those who have time to track the financial health of the company. Such investors invest in good companies at very beginning and earn multifold return in long term. You should have large sum to invest in such companies at the starting.

Equity Mutual Fund:

Investing in equity mutual fund is very good instrument for wealth creating in long term. It is very suited to those people who have no time to track the market and companies and also not understanding of finances. One can easily invest in equity mutual fund in lump sum or in step by step in the form of SIP (Systematic Investment Plan). There is no need to have large sum at initial stage of investing like in direct equity. It also give the multifold return in long run on your investment. One can start investing a very small amount like Rs 500 also and gradually increase this as per their income.

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

Atal Pension Yojana

Atal Pension Yojana : Relevant Points

Atal Pension Yojana (APY) is a scheme for all those people of the unorganized sector who wish to join the National Pension System and are not the member of any other social security scheme. It has been launched on 1st June 2015.

According to NSSO Survey of 2011-12, in India, 88% of the total labour force do not have any pension provision for their after retirement life. In 2015-16 budget, government has announced Atal Pension Yojana (APY) which will provide the defined pension, depending on contribution and investment period.

Under this scheme, a person can get a fixed pension of Rs 1000/2000/3000/4000/5000 per month after completing the age of 60. However, the pension amount depends on their own contribution which varies on the age of joining the scheme.

The people who are looking to join this scheme must be a citizen of India. The eligibility age for this scheme is 10 to 40 years of age and the person must have a valid bank account. The minimum period of contribution by any person would be 20 years or more.

The bank will deduct the amount on monthly basis of the account of APY subscriber. If subscriber fail to contribute the penalty would be levied as per structure.

·         Rs 1 per month for contribution upto Rs 100 per month.

·         Rs 2 per month for contribution upto Rs 101 to 500/- per month.

·         Rs 5 per month for contribution upto Rs 501 to 1000/- per month.

·         Rs 10 per month for contribution beyond Rs 1000 per month

If payment not received till 6 months then account will be frozen. After 12 months account would be deactivated. After 24 months account will be closed. Exit from the scheme before 60 is not allowed. It is only permitted in the event of death or terminal disease. After the age of 60 the subscriber have to request to their bank branch and the fixed amount would be credited each month to subscriber and his spouse. After the death of subscriber the nominee would get the corpus which is invested by subscriber.

The nominee will get Rs 1.7 lakh if monthly pension is Rs 1000, Rs 3.4 lakh if monthly pension is Rs 2000, Rs 5.1 lakh if monthly pension is Rs 3,000, Rs 6.8 lakh if monthly pension is Rs 4000 and Rs 8.5 lakh if monthly pension is Rs 5,000.

The govt. would also contribute 50% of the total contribution or Rs 1000 per annum, whichever is lower, to each subscriber account, for a 5 year. The eligibility for this benefit is the person should not member of any other statutory social security scheme and should not be tax payer. The person should also join the NPS between the period of 1’st June 2015 and 31st December 2015.

The toll free no. for Atal Pension Yojana (APY) are 1800-180-1111, 1800-110-001. There is also dedicated no. for each state. I am not mentioning all here. If anyone need particular state toll free no. please ask me.

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

Bank FD v/s Banking Fund

Bank FD v/s Banking Fund

We Indian love very much keep deposit in bank FD. Since my childhood I have seen immense faith of people in bank FD because they all think that bank FD is the safest instrument on this earth to keep their hard earned money. Very few people know that the bank only give guarantee maximum Rs 1 lakh through insurance in case of any system collapse or bankruptcy. It means more than Rs 1 lakh in bank always in risk. However, there are very low chances to fail the bank because our central bank RBI is one of the top regulator in world. Every financial instrument have their own risk and reward. So we are going to do a small comparison between bank FD and banking fund.

For example a person invest Rs 1,00,000 in SBI bank FD and in a banking Fund on 20th May 2003. After 11 year the value of invested Rs 1 lakh in SBI bank FD grows up to Rs 2,66,190. On this amount we have to pay tax according to our income slab and bank deducts TDS direct at the time of withdrawing the money. Bank FD is a secure investment compare with other available instruments. It hardly beats the inflation. Therefore it is not a wealth creator.

In other hands, banking funds invest in banking stocks. After 11 year, the value of invested Rs 1 lakh grows up to Rs. 14,67,000. And the amazing thing that there is no TDS deduction and it is tax free. It means you have not to pay tax on your gain. The only risk is volatility because equity is always volatile and checks your patience. It is a wealth creator instrument for long term investor.

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.

Increased Service Tax from 1st June 2015

Increased Service Tax from 1^st June 2015

From starting 1st June 2015, the service tax rate has been increased from 12.36% to 14%. Service tax is levied by the central government on certain services. It is paid by the end user. Eating out, travelling and mobile bill will also get costly now onwards. In financial services mutual fund distribution service has been came under the ambit of this tax this time.

At present we are paying the service tax on our insurance premium and distributor also pay the service tax on received commission by selling the insurance product. In banking space, various fees and charges linked to saving account, term deposit and debit or credit card attract service tax. Bank FD interest does not come under this tax. The interest of home loans and personal loans do not charge service tax but the processing fee and late payment fee attract service tax.

The increased tax will also affect your share trading bill. The brokerage levied on your buying and selling shares are also attract the service tax and from today the new rate would be applied. Mutual fund adviser and distributor will pay now service tax on their commissions received by selling mutual funds. The mutual fund AMC also pay the service tax on management fee.

Service tax on the mutual fund distributor will also impact the business of mutual fund badly and the new IFA get affected by imposing this tax.

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