Equity mutual fund investors lose up to 34% in past one Year

Equity mutual fund investors lose up to 34% in past one Year

Investors, who put money in equity mf through systematic investment plans (SIPs) in the past one year, are sitting on losses because of the extended weakness in the stock market. Investors are losing money in 123 out of 147 actively managed equity schemes, as per data from Value Research. Small-cap funds have seen the highest fall followed followed by midcap funds and multicap funds.

In SIPs, investors put a fixed amount in schemes every month or quarter. It’s like the recurring deposits of banks. In the last two years, many first-time investors in Equity Mutual Funds through SIPs.

When they began SIPs, the allocations were linked to various goals such as vacations, retirement etc. The start, however, has been wobbly For example, an SIP of Rs 1,000 done in SUNDARAM SMALL CAP FUND for the last one year entailed a total investment of Rs 12,000 which is down to Rs 9,726 as on September 25, a loss of Rs 2,374. But their track record in a two year period is better. At least 22 out of 141 equity mutual funds have given negative SIP returns in the last two years

Five steps to clean up your investment portfolio and meet financial goals

Five steps to clean up your investment portfolio and meet financial goals

The first step towards cleaning up your portfolio is to review instruments and funds.

   Financial planners and customer-friendly online financial marketplaces have simplified the investment and financial planning process for consumers. However, despite their rising popularity, many investors still end up goofing up their investment portfolios. For such investors, I provide a 5-step guide to help clean up their investment portfolio:
I: Revisit financial goals and current investment portfolio

The first step towards cleaning up your portfolio is to review instruments and funds wherein you have invested till date, and find out if they can help achieve your financial goal. Sometimes, we invest in instruments suggested by our friends or family, simply driven by emotions rather than tactics. These may prove to be inadequate to meet our financial goals. There may also be some investments which did make sense in the past but aren’t relevant today.

Reviewing your portfolio would help evaluate the relevance of your past investments as per your short-term and long-term financial goals.

II: Chalk out the junk to trim down your portfolio

Trim down your investment portfolio once you identify investments which no longer cater to your financial goals. This may include funds that have been consistently under-performing for over 2-3 years in a row. Redeem your units from such funds and invest in LIC money back plan instead.

In addition to this, find out whether you invested in a wrong or unwanted fund while diversifying your portfolio. The basic idea behind diversification should be to prevent any damage to your portfolio in the event of an economic slump or under performance/failure of one kind of security.

Many investors decide the type of diversification (whether it’s across or within an asset class, or based upon fund management or geographical location) without taking into consideration factors such as their Risk Appetite, Investment horizon, Market Knowledge, Financial goals etc. This practice often leads to creation of an unsuitable portfolio which neither matches the investor’s financial goals nor assists in wealth creation.

Also, try to understand the difference between diversification and duplication. Duplication takes place when the chosen schemes/securities do not reduce the overall risk of the portfolio and continue providing just average returns.

III: Restructure your portfolio in accordance with your financial goals

Your portfolio would require restructuring in order to get back on track. Whether it’s a short-term goal such as family vacation and purchase of electronic gadgets, (Preferable midium.  or a long-term goal such as child’s higher education and marriage, each goal would require a separate investment. Your portfolio should ideally have a mix of funds to cater to both short as well long-term goals.

Choose appropriate investment avenues as per your risk appetite, investment horizon, age etc. But before finalizing this, make sure your financial goals have been prioritized and the corpus’ amount has been estimated.

As far as long-term goals are concerned, Safe Portfolio (Like LIC,PPF) have proven to be most suitable investment avenue, given that they provide consistent as well as safe and tax free returns in the long run, especially when compared to  investments such as mutual fund or equitys returns are  Taxable, and no capital protection, in case you want to  taking the risk of investing purely in equities.

IV: Review your portfolio periodically

Even after investing in the suitable investment avenues, you must keep reviewing your portfolio from time to time, ideally at least once in five year. Periodic reviews help in assuring you’re your investments are aligned with your financial goals and the funds are performing satisfactorily in comparison to benchmark indices and peer funds.

Restructure or re-balance your portfolio in case you feel your current investments may not be adequate to meet your goals.

V: Learn from your mistakes to avoid future mess-ups

While the aforementioned measures would help you clean up your portfolio, it’s up to you to ensure you do not repeat the same mistakes in future. One effective way to do so is to be aware of the decision points which went wrong in the past and learn from it. This would help maintain healthy portfolio that’s in sync with your short-term and long-term financial goals.

Bank of Baroda, Vijaya Bank and Dena Bank to be merged

Bank of Baroda, Vijaya Bank and Dena Bank to be merged

The government has announced that Bank Of Baroda NSE 0.63 % , Vijaya Bank NSE 0.93 % and Dena Bank NSE -0.31 % will be merged into a single bank which will become India's third largest bank. The move follows top lender State Bank of India last year merging with itself five of its subsidiary banks and taking over Bharatiya Mahila Bank, a niche state-run lender for women. 

Rajeev Kumar, Secretary Department of Financial Services, said in a press conference today that employees interest would be protected in the merger process. The merger of five SBI associate banks was done without any job losses, he said. The three banks will continue to work independently post merger.

Kumar said the merger would help improve operational efficiency and customer services. He said it was time for the next generation of strategic banking reforms. The government had initiated numerous reforms over the last four years, especially with respect to banking and to ensure clean lending process, he said.

He said the stock of non-performing assets (NPAs) had reduced by Rs 21,000 crore in last Air India Subsidiaries Sale Fuel Price Hike Video quarter. Banks recovered Rs 36,551 crore in the first quarter of FY19. There was a need to increase scale and synergy for growth momentum to continue, added Rajeev Kumar. 

Kumar talked about various steps the government had taken to clean banking including the Insolvency and Bankruptcy Code (IBC). He said now people knew that if they had taken loan, they would have to return it. He said the IBC was fundamentally changing the creditor-debtor relationship in India. He said all loans over Rs 150 crore would be monitored by a separate vertical in each bank.

Cryptocurrency Bubble Bursts, Price Index Plummets 80% to its Lowest Ever

Cryptocurrency Bubble Bursts, Price Index Plummets 80% to its Lowest Ever

Digital Gold

The virtual-currency mania of 2017 -- fueled by hopes that Bitcoin would become “digital gold” and that blockchain-powered tokens would reshape industries from finance to food -- has quickly given way to concerns about excessive hype, security flaws, market manipulation, tighter regulation and slower-than-anticipated adoption by Wall Street.
Like their predecessors during the internet-stock boom almost two decades ago, cryptocurrency investors who bet big on a seemingly revolutionary technology are suffering a painful reality check, particularly those in many secondary tokens, so-called alt-coins.
As virtual currencies plumbed new depths on 12/09/2018, the MVIS CryptoCompare Digital Assets 10 Index extended its collapse from a January high to 80 percent. The tumble has now surpassed the Nasdaq Composite Index’s 78 percent peak-to-trough decline after the dot-com bubble burst in 2000.

Virtual currency in the form of Bitcoin, Ether, among others registered their biggest fall ever on Wednesday when the collective cryptocurrency index by almost 80 percent.

The tumble has now surpassed the Nasdaq Composite Index’s 78 percent peak-to-trough decline after the dot-com bubble burst in 2000, according to a report by Bloomberg.

Like their predecessors during the internet-stock boom almost two decades ago, cryptocurrency investors who bet big on a seemingly revolutionary technology are suffering a painful reality check, particularly those in many secondary tokens, so-called alt-coins.

“It just shows what a massive, speculative bubble the whole crypto thing was — as many of us at the time warned,” Neil Wilson, chief market analyst in London for Markets.com, a foreign-exchange trading platform told Bloomberg. “It’s a very likely a winner takes all market — Bitcoin currently most likely.”

Wednesday’s losses were led by Ether, the second-largest virtual currency. It fell 6 percent to USD 171.15 at 7:50 a.m. in New York, extending this month’s retreat to 40 percent. Bitcoin was little changed, while the MVIS CryptoCompare index fell 3.8 percent. The value of all virtual currencies tracked by CoinMarketCap.com sank to USD 187 billion, a 10-month low.

The virtual-currency mania of 2017, fuelled by hopes that Bitcoin would become “digital gold” and that blockchain-powered tokens would reshape industries from finance to food, has quickly given way to concerns about excessive hype, security flaws, market manipulation, tighter regulation and slower-than-anticipated adoption by Wall Street.

Crypto bulls dismiss negative comparisons to the dot-com era by pointing to the Nasdaq Composite’s recovery to fresh highs 15 years later, and to the internet’s enormous impact on society. They also note that Bitcoin has rebounded from past crashes of similar magnitude.

But even if the optimists prove right and cryptocurrencies eventually transform the world, this year’s selloff has underscored that progress is unlikely to be smooth.