PCS CAPITAL

 What is disinvestment ?  Disinvestment means sale or liquidation of assets by the government . The government undertakes disinvestment to reduce the fiscal burden on the exchequer, or to raise money for meeting specific needs, such as to bridge the revenue shortfall from other regular sources. In some cases, disinvestment may be done to privatize  assets. However, not all disinvestment is privatization .  Benefits of disinvestment  1. Helpful in the long term growth of the country 2. Allows govt to reduce the debt 3. It allows larger share of PSU ownership i nthe open market , which in turn allows for the development      of a strong capital market in India. 4. Reducing fiscal burden on ex -chequer 5. Improving public finances 6. Encouraging private ownership All disinvestments are not privatization  Whenever Govt desires it may sell whole enterprise or majority stake it to private enterprise . In such case we call it as privatization where ...

  In march 20 we saw biggest  intraday fall , more or less and we saw big up in april and we saw lot of speculation  and many queries like why mkts are up when nothing is moving in economy , and experts were saying this is not the true rally and we will see more downside and today mkts are down by 1% and everyone are claiming that i told you and it fell.  To be honest stock mkts are  governed by some people  and they don’t think logically , they hope everything  is alright and lockdown more or less is over and we are back on track,  also think on investing on potential future gains.. but whatever the reasons are as.. long term investor in equity  don’t need to know the reasons why markets are falling, why markets  are moving up We don’t need the reasons and we dont need to sit and worry about what all analysts and experts in media says about false rally and true rally. All these experts analysis is complete garbage to your portfolio and ...

I often get questions from youngsters on savings and investments , they are more confused and at the same time more excited on investments after receiving their first salary .  Below are few tips  1.  Take Term plan and Health Insurance for you and  your immediate dependents  (very important to take   though  your employer is providing ) 2. Buy something for yourself and family (after all it is your money and it should be spent) , but make sure it wont be recurring expenses 3. From your first salary invest 25% in liquid fund or any F.D (this would be your emergency parking) .     You can reduce this emergency allocation after one year or so and Increase again if you have used these funds in an emergency . 4. Do not get in to EMI's  in early stage of your career and say no to credit cards  5. Allocate some money for your short term goals like buying a bike or going for a holiday with friends or       fam...

Am not against banking services or anything , I have high regards on our banks and I firmly believe they are the pillars of any economy .  If banks are strong economy grow strong .  I have  a big problem with Bank Relationship managers who try to sell wrong products  to their customers to achieve their targets and revenues .  They generally have huge targets and they are trained to provide misinformation and do wrong product selling to their customers (be wary) One can easily understand , when you you step in bank and ask for a PPF , they try to sell you a ULIP (sadly by saying all disadvantages of PPF)  If you ask about FD they can sell you Tier 1 bond (they compare with FD) . This has happened with yesbank customers and still happening with many .  If you want to buy a sukanya samridhi scheme ( beautiful product from Govt of India) they sell you child insurance plan .  "Never ask a barber if you need a haircut " same way "Never ask a banker wher...

  ELSS  ELSS schemes function in accordance with ELSS guidelines issued by CBDT under Section 80C of the Income-tax Act, 1961 to provide tax savings on investments in equities. The amount you invest in ELSS is deducted from your taxable income. This way, you lower the amount of income tax you need to pay. Benefit of  ELSS  ELSS is a type of mutual fund investment that qualifies for tax deductions u/s 80 c of IT Act ,1961 open-ended fund which has a 3 year lock-in period  With the growth potential of Indian equity markets from a long term perspective, investments in ELSS to save taxes could just turn your wealth creation dream into reality.   lets see other alternative tax saving instruments There are several financial instruments in savings and investments that qualify for tax deduction under Section 80C of the Income-tax Act, 1961. These include provident fund, PPF, premiums towards life insurance policies, NSC, ULIPs, bank FDs with 5-year lock-in, h...

Importance of Contingency Funds An unexpected event, like an illness or a business loss could affect the financial security of your family. Such an event would make it difficult to meet your monthly expenses and/or your financial obligations. More importantly, you might break into investments meant for other goals in your life, thereby derailing your financial plan altogether. A financial contingency plan helps you cope with such unexpected events, by keeping aside funds for this purpose. People face some challenges in planning for contingencies Be prepared for alternative   :  While doing financial planning, investors tend to get emotionally attached to their plans. Consequently, they tend to ignore coming up with an alternative plan for emergencies. It is essential that investors look beyond ‘Plan A’ and keep a ‘Plan B’ (or, a contingency plan) in place, for emergencies. I dont need it (mindset) : Planning for contingencies generally takes a backseat in an investor...

Impact of Inflation on investments Inflation is a villain to your investments , it is a hidden bug which eats our returns . Before investing we need to understand what is inflation and its impact  In simple terms inflation reduces purchase power of money . Its a    general trend of price rise in a country. there can be a multiple factors responsible to rise in inflation .  Inflation can be caused by Deficit financing , over supply of money  and other many factors How Inflation impacts you and me  ? With rising prices , as a common man we remain always at the receiving end at the time of high inflation .  let us understand in simple way  If you buy a pen worth Rs 10/- last year and same pen costs 11/- today and you lost 1/- to inflation , in same way if your Bank F.D is giving you 6% p.a returns and inflation is 7% then your real returns are minus 1  , however if you have put this money in equity and if it gives 9% then your real returns are 2...

 ULIP and Mutual fund People often get confused in selecting ULIP or MF because they think both are same . lets understand the difference between these two ULIPS is an insurance product which gives life cover and also invests in stocks , bonds and other money market instruments . Mutual funds is a pure investment tool without any life cover . its sole purpose of investment is to generate returns Liquidity  ULIP has a lock in period , MF dont have any lock in (except one is looking for tax saving option) . Mutual fund offers better liquidity (unless you invested in tax saving fund which has 3 years lockin)  and can be withdrawn anytime subject to some charges , whereas ULIP has different rules . For the withdrawal of investments from ULIPS you need to be invested for 5 years , even if you wish to discontinue your investments in ULIP say i nthe third year of investment , your invested money will be available to you only after 5 years from date of buying ( this is the drawb...

  Power of compounding  The most simple and powerful component in mutual fund is compounding .  Great thing about compounding is that you will eventually reach a point where the amount of money reinvested will become greater than principal amount . All you need to do is start investing early , compounding will grow your money for you .  How compounding works ? Consider an example to understand how the power of compounding works: Ravi invested Rs 1,00,000 as a lump sum this year. He is going to earn an interest of 12% on this investment every year. Now let's see how much interest Ravi earns over 10 years, if he takes his interest out each year, as compared to letting the principle of compounding work for him. Scenario 1:  Ravi keeps his earned interest aside   Scenario 2:  Ravi reinvests his interest and lets compounding work Year Principal amount Interest earned (@12%p.a.) Year Principal amount Interest earned (@12%p.a.) 1 1,00,000 12,000 1 1,00,000 12...

What is a Mutual fund ? Many people think this as a complicated subject and they stay away from knowing. we will learn today in simplified terms  Mutual fund is a trust which pools money from different investors and invests in equities , bonds , money market instruments . Each investor gets some units after investing and gains/losses are distributed proportionately amongst investors after certain fund expenses which is called as NAV(Net Asset Value) .  Mutual fund is most available investment option  to a common man as it offers liquidity , diversification , professional management and one start investing in mutual fund with  as low as 500/- . Benefits  Liquidity : Unlike other asset classes (Gold , property) Mutual funds have huge liquidity and one can sell their units at anytime when they require money. Diversification :  Mutual funds invests in different stocks for diversification between various sectors , styles etc. It can also invest in other assets...

How Asset allocation helps in wealth creation ? we often hear about asset allocation in wealth building , let us understand how this helps  Asset allocation is the other name of diversification , here diversification means distributing our money in different assets like stocks ,cash , Fixed income , property and gold . This is based on your risk profile and goals. Asset allocation ensures all your eggs is not in one basket and if one asset crashes another asset gives you returns. Benefits Reduces risk : Minimises risk of loss by investing in different asset classes . If one asset crashes other asset gives returns .  Helps in achieving financial goals : Depending on time horizon one can invest in dominant asset to achieve their financial goal . Tax efficiency : Proper asset allocation helps in determining right tax saving instrument and helps in less outgo of tax . Liquidity benefit : If we invest entire amount in Real estate and when in need we cannot liquidate and use the...