A mutual fund is a without specified limit, professionally managed investment fund that links money from many investors to buy securities. These buyers may additionally be retail or institutional in nature.
Mutual funds have perks and pitfalls compared to direct investing in individual securities. The few advantages of mutual funds include economies of scale, diversification, liquidity and expert management.
Mutual funds are frequently categorized with the aid of their foremost investments as money market funds, bond or fixed income funds, stock or equity funds, hybrids funds and others.
Mutual funds are perfect for investors who either lack large sums for investment, or for those who neither have the knowledge nor the time to research the market, yet want to grow their wealth.
During the past few years mutual funds have achieved a favored status when investors have been investing regularly in equity/balanced schemes through them.
ADVANTAGES OF INVESTING IN MUTUAL FUNDS
- PORTFOLIO DIVERSIFICATION: Mutual funds invest in a diversified portfolio of financial instruments which enables a small investor to hold a diversified investment portfolio even if the amount is small. This diversification minimizes the risk.
- LOW RISK: Even with a small amount of investment, investors can acquire a diversified portfolio of financial instruments. The risk is a diversified portfolio of mutual fund scheme is lesser than investing directly in 2 or 3shares.
- LIQUIDITY: Units of a mutual fund can be redeemed easily with the funds being credited directly to the investors account though ECS payment.
- TRANSPARENCY: Funds provide investors with latest information related to the markets and the scheme. All material facts are revealed to investors as per the guidelines of SEBI and AMFI.
- PROFESSIONAL MANAGEMENT: Mutual fund portfolios are managed by expert professional managers possessing skills and qualifications to analyse the performance and prospects of companies.
DISADVANTAGES OF INVESTING IN MUTUAL FUNDS
- High Fees
- Less control over the timing of recognition of gains
- Less predictable income
- No opportunity to customize
ORGANISATION STRUCTURE OF MUTUAL FUNDS IN INDIA
Following are the key things involved in setting up the mutual fund business in India:
- Sponsor:Promoter of the mutual fund company is known as sponsor of the mutual fund. Sponsor either on his own or in partnership with another company establishes a mutual fund with a purpose to earn money from fund management through its subsidiary company. The company which manages the funds as investment manager of the fund is called as AMC.
- Trustee: Sponsor creates trust through trust deed in the favor of trustees. Trustee manages the trust and they are primarily responsible as guardians to investors in mutual funds. All funds floated by the AMC have to be authorized by the trustees.
- AMC: Sponsor start Asset Management Company and AMC manages funds of the trust. It charges small fee to manage trust funds. The AMC plans all schemes, launches the scheme and sources initial amount, manages the funds and give services to the investors. Fund managers are appointed by AMC to manage various MF schemes floated by an AMC.
- CUSTODIAN: In mutual funds, AMC purchases different securities like shares, bonds, gold etc in various schemes. These securities are purchased in the name of trust but they are not kept in the custody of the trust. The responsibility of safe keeping the securities is with custodian. Now a days the custody of financial securities are in DEMAT form.
- Registrar & Transfer Agent: Registrar and Transfer agent is a separate entity. Registrar and transfer agent has the responsibility of performing many administrative jobs like processing of applications of investors, generating units when new application is received.
WHY INVESTING IN MUTUAL FUNDS IS A GOOD OPTION?
People invest in mutual funds with the intention to earn higher returns than what traditional investment options offer. These returns are the outcome of more comprehensive market susceptibility and professional management of the funds. All this is available at a nominal capital via the Systematic Investment Plan (SIP) way.
Mutual funds are also more tax-efficient than long established investments. Short-term as well as long-term gains from mutual funds are taxed in a way that it doesn’t deplete the returns. Mutual funds make more sense as a long term investment.
Summarily, mutual funds are a reliable option from the view point of long term investment. Short-term variations in the returns are not something to be distressed about while investing in them. Choosing the right mutual fund to invest in which matches with the investment goal can prove to be the best decision.
DOCUMENTS REQUIRED FOR INVESTING IN MUTUAL FUNDS
Following documents are required:
- Application form with necessary basic details, along with amount to be invested, SIP amount and nomination details needs to be filled.
- KYC is mandatory which every investor needs to follow to be able to invest in mutual fund. For which following documents are required:
- PAN CARD
- AADHAR CARD
- PASSPORT SIZE PHOTOGRAPH
- UTILITY BILLS LIKE, TELEPHONE BILL OR WATER BILL ETC.
- BANK ACCOUNT STATEMENT/PASSBOOK MAXIMUM 3 MONTHS OLD
HOW ASA WILL HELP YOU INVEST IN MUTUAL FUNDS
Just as times heals everything, time also makes mutual funds safe and rewarding. One must be very careful before investing in mutual funds. We at ASA will advise you and help you in doing the best possible research about mutual funds.
Our experts will inform you thoroughly about the market performance and will answer your every possible query. We assure you a portfolio according to your needs and requirements.
We always got your back. You can reach out to our experts and know everything about mutual funds before investing.
A commodity is a basic good used in trade that is similar with other goods of the same type. Commodities are most frequently used as inputs in the production of other goods or services. The quality of a given commodity may vary slightly but it is basically uniform across producers. The sale and purchase of commodities are usually fixed out through futures contracts on exchange that regulate the quantity and least of the commodity being traded.Trading in the commodities has become more conventional with the recent fickleness in the stock market.
Investing in commodities can prove to be a good decision when a nation’s currency loses value and traders tend to preserve the value of their purchasing power.
Therefore, one has to be careful of how much of your portfolio should consist of commodities and allocate them wisely.
Commodities can be divided into following general categories:
- Agricultural commodities including wheat, corn, sugar and cotton.
- Precious metals such as gold, silver and platinum.
- Energy including crude oil and gasoline
- Livestock such as live and feeder cattle
- Futures contracts
Among which the most common way for investors to invest in commodities is through futures contracts.
DOCUMENTS REQUIRED FOR INVESTING IN COMMODITIES
One needs to fill up an application form to open commodity trading account with any broking company. With application forms following necessary documents are needed to be uploaded as well:
- PAN Card
- ID Proof
- Address Proof
- Income/Salary statement
If you are looking to invest in gold directly then they are 3 options: purchase the physical asset, purchase the shares of a mutual or exchange-trade fund (ETF) that replicates the price of gold, or trade future and options in the commodities market.
Compared to other commodities, gold is more accessible to the average investor because an individual can easily purchase gold bullion (the actual yellow metal, in coin or bar form) from a precious metals dealer or in some cases, from a bank or brokerage. Ifbuying gold as a portfolio diversification strategy, then ETF’s are the best way to go.
Gold should be a vital part of a diversified investment portfolio because its price rises in response to event that cause the value of paper investments such as stocks and bonds to decline. Although the price of gold can be fickle in the short- long term. Through the years, it has served as a safeguard against inflation and the erosion of major currencies and thus is an investment well worth considering.
TO INVEST IN GOLD EXCHANGE TRADED FUND ALL YOU NEED IS DEMAT AND A TRADING ACCOUNT. THE DOCUMENTS REQUIRED TO OPEN A DEMAT AND TRADING ACCOUNT IS:
- PAN CARD
- IDENTITY PROOF
- ADDRESS PROOF
HOW ASA HELPS YOU IN INVESTING IN COMMODITIES OR GOLD
Investing in commodities or gold can prove be to very beneficial but it is also a complicated process. In order to diversify and make sure that money grows one should invest in different instruments. However you don’t need to worry about.
ASA will help you in choosing the safest commodity or the right time to invest in gold. Our expert advisors are just a call away in providing the best service they can.
These are a tad bit of complicated processes that should only be undertaken by experienced traders with expert’s advice. Our team of experienced professionals who knows all the market fickleness will help you and guide throughout. Reach out to us for the best investing advices.
A bond is a basic fixed income security which is issued by a borrowing company to investors under a borrowing agreement. The owners of the bonds are debt holders or creditors of the issuing company. The borrower company (issuer) has to pay periodic interest payments to the registered bond holders on specified date.
The rate of interest is called the coupon rate and is generally fixed. These bonds are generally having a maturity period after which the bond holders shall be paid back the principal amount of the bond. This period is known as tenure of the bond. These bonds can be issued at par and redeemed at par or at premium. This borrowing instrument when is issued by government or government company is known as bonds.
Bonds and stocks are both securities but the major difference between the two is that stockholders have equity stake in a company, whereas, bondholders have a creditor stake in the company. Being a creditor, bondholders have priority over stockholders.
TYPES OF BONDS
- Deep Discount Bonds:Thesebonds are issued at discount and are redeemed at the face value at the expiry of a specified period. No interest is payable during the tenure of these bonds. Deep discount bonds are alsocalledzero coupon bonds.This means the deposit does not give any interest payouts; instead the interest is accumulated and paid out at the time of maturity.
- Callable Bonds: Callable bonds are wherein the issuer has an option to redeem the bonds at any time after an initial stipulated period. If the company opts to redeem these bonds prematurely, the holders have no option but to accept the redemption value.
- PuttableBonds:Puttable bonds are those bonds where terms and condition allows the holder to exercise an option to get the bond redeemed at any time after the stipulated time period but before the maturity. If the coupon rate is lesser than the prevailing market interest rate at any time, then the bond holder may prefer to get the bonds redeemed. Now days most of the bonds issued in India have both the options, call as well as put.
- Junk Bonds: Junk bonds have no credit rating or very poor credit rating and therefore carry a very high default risk. They are generally issued at deep discount and redeemed at par giving high return to the investor. These bonds are also known as high risk high return bonds. They are highly speculative in nature.
- Government Bond: Government bonds also known asG-secs or Gilts are issued by or on behalf of central or state government. Since, these bonds are considered to be more secure and safe than other bonds; they carry a low coupon rate. The payment of interest is guaranteed by government. These government bonds are also listed on the stock markets like other private sector bonds for trading.
- Municipal Bonds: Municipal bonds are issued by cities and localities. There rate of return a little more than treasuries but are a bit precarious.
- Convertible Bonds: Convertible bonds let a bondholder exchange a bond to a number of shares of the issuer’s common stock. These are recognized as hybrid securities, because they syndicate equity and debt features.
ADVANTAGES OF BONDS
- It benefits as income, one receive income through the interest payments.
- One cannot lose investment unless the entity defaults.
- Profit can also be earned if the bonds are resold at a higher price than you bought it.
- Bonds can be packaged into a bond mutual fund.
- A bond fund can also reduce risk through diversification.
DISADVANTAGES OF BONDS
- Due to long period of time, bonds pay out lower return on investments.
- Investing does not always lead too much saving for future.
- Doesn’t offer high interest rate to attract buyers.
- Doesn’t get the promised principal or interest as guaranteed on time due toissuer’sinability to pay.
- There’s always a chance that government will implement new policies, which will lead to widespread inflation.
WHY INVEST IN BONDS?
Investors buy bonds because; they give a stable income stream. Generally, bonds pay interest twice a year. If the bonds are hold till maturity, bondholders get back the whole principal amount, so bonds are a way to save capital while investing. Bonds help equalize the more unstable stock holdings.
Organizations, government and municipalities issue bonds to get money for various things which includes, providing operating cash flow, financing debt, funding capital investments in schools, highways, hospitals and other things.
DOCUMENTS REQUIRED TO INVEST IN GOVERNMENT BONDS
To invest in government bonds, you need to carry necessary documents such as:
- PAN Card
- Address Proof
- Aadhar Card
- DEMAT account number
- ID proof, along with application form.
A minimum time period would be taken to process the documents and after the process completion and verification, Bond certificate will be received in the name of the investor.
HOW ASA WILL HELP YOU TO INVEST IN BONDS
When you spend in bonds, you lend your money to angroup that needs capital. ASA will guide you and help you about the best time to put in bonds. Our expert professionals who are in this industry from a long time will also guide you about the type of bond you should invest in, which will give the higher rate of interest.
Our team here will help develop all the necessary documents required to invest in bonds. You can leave the process and research on us and can focus on growing your business and enjoy great returns.
A financial planning is the task of determining how a business will afford to achieve its strategic goals and objectives. Usually, accompany creates a financial plan immediately after the vision and objectives have been set. The financial plan defines each of the activities, equipment, resources and materials that are needed to attain these objectives as well as the timeframes involved.A financial plan energies on areas such as risk management, college, estates or retirement.
Performing Financial Planning is critical to the success of any organization. It provides the business plan with strictness, by confirming that the objectives set are achievable from a financial view point. It also helps CEO to set financial targets for the organization and reward staff for meeting those targets.
IMPORTANCE OF FINANCIAL PLANNING
Financial planning helps one to determine your short and long-term financial goals and create a balanced plan to meet those goals.
Some of the reasons how financial planning will help achieve your desired goal:
- Income:With financial planning it becomes possible to manage income more effectively. Managing income helps you understand how much money you’ll need for tax payments, other monthly expenditure and savings.
- Cash flow:It increases cash flow with carefully monitoring one’s spending patterns and expenses. Tax planning, prudent spending and careful budgeting will help business keep more hard earned cash.
- Capital: An increase in cash flow can lead to an increase in capital of the business. Allowing you to you to consider investments to improve your overall financial well-being.
- Investment:Aappropriate financial plan reflects your personal circumstances, objectives and risk patience. It acts as a guide in serving choose the right types of investments that fits to your essential and goals.
- Financial Understanding: Healthier financial understanding can be achieved when quantifiable financial goals are set, the effects of conclusions understood and results reviewed. Giving you aentire new approach to your economical and improve your financial lifestyle.
- Assets: Many assets come with liabilities attached. So it becomes necessary to determine the real value of it. The knowledge of settling and cancelling the liabilities comes with the understanding of finances. Financial planning helps build asset that don’t become burden in future.
ADVANTAGES OF DOING FINANCIAL PLANNING
- Provides safety for future: Financial planning helps give a direction to your financial decisions. It helps you decide about multiple investments that can relieve you of your financial problems.
- Assist in decision-making: Financial planning takes stock of your current as well as of your future. It thus, facilitates decision-making. With proper planning and solid decision making power one will never be short of funds and his/her financial well-being will not be affected.
- Optimum use of resources: A financial plan also helps you form a strategy. This benefits you allocate your resources to dissimilar assets. Thus, one can use money intelligently which will lead to best use of resources.
- Better standard of living: With appropriate financial planning, one will never be short of funds. Thus, goals can be achieved without being able to compromise the standard of living.
- Disciplined life: Without proper financial planning one cannot achieve his/her long term goals. It will help you get out of a whole lot of financial mess that might arise in future. Financial planning infuses discipline in life.
DISADVANTAGES OF FINANCIAL PLANNING
- Uncertain future:Financial planning is based on the assumption about the future factors associated with the project. The nature of the future is uncertain, and most of times things do not come as expected. The ambiguity of future events significantly decreases the trustworthiness of financial planning.
- Lack of accuracy in data: The results of financial planning may go in vain if the based data itself is inaccurate. Authenticity and accuracy of based data are most important as all the estimates may go wrong.
- Rapid changes in policies: Momentous changes in government rules and regulations about the economic environment can affect financial plans severely.
- External factors:External factors that are not directly stakeholders of your business plan but may affect your planning adversely for example, war or natural disaster etc.
- Time consuming & expensive process: Financial Planning is time consuming process. It requires the use of new technologies and expertise of different experts which makes this process expensive also.
METHODS TO IMPROVE THE FINANCIAL PLANNING
Financial planning can be improved with proper planning and few techniques which are as follows:
- The organizer should be given adequate time and tools.
- Gather information and data from a very reliable source. The base data should be cross-checked with other sources to make it more reliable.
- Involve concerns persons to make the planning more accurate and error-free.
- The information system should be properly implemented, which gathers, processes and makes reports of relevant data.
- You should be aware of current political and economic signals coming from government sectors to base your predictions more accurately.
HOW ASA WILL HELP YOU IN FINANCIAL PLANNING
Financial planning must be undertaken with the help of an expert. It is intelligent to seek advice from professionals who have been a part of this industry for quite a long time.
ASA offers the best advisory in financial sector which will prove to be beneficial for your business and you won’t end up making disastrous decisions. Our expert advisors will establish a healthy relationship with you and help you achieve your desired goals.
ASA’s experts will develop your financial plan taking all the current as well as past financial circumstances into consideration. They will review your current financial status, what changes could be made, and will help you set future goals.
Reach out to us for your financial assessment and we promise to never let you down.
A fixed deposit is a financial instrument provided by banks or NBFC’s which provides investors a higher rate of interest than a regular savings account, until the given maturity date. It may or may not requisite the creation of a distinct account.It is recognized as a term deposit or time deposit in numerous countries. Money from FD cannot be withdrawn as compared to a recurring deposit or a demand deposit before maturity.
It’s essential to note that banks may deal lesser interest rates under uncertain financial conditions. The interest rate differs between 4 and 7.50%. The tenancy of an FD can vary from 7, 15 or 45 days to 1.5 yearages and can be as high as 10 years. These investments are inoffensive than post office schemes as they are enclosed by the Deposit Cover and Credit Guarantee Corporation (DICGC). They also bid income tax and wealth tax benefits across.
ADVANTAGES OF FIXED DEPOSIT
Following are the advantages of investing in FD:
- Ascertained returns: Unlike most other investment schemes, FD offer guaranteed returns on the deposited sum.
- Offers vast flexibility: The best FD plans offers flexibility when it comes to the term of the plan. Depending on investor goals one can either open short-term and long term FD accounts.
- High capital appreciation: Cumulative fixed deposit plans compound interest monthly or quarterly or half-yearly. Hence, the deposit amount is substantially appreciated by the end of term.
- Additional source of income: The investor can select the frequency of interest payout for non-cumulative fixed deposit plans. Therefore, they can act as an added source of income.
DISADVANTAGES OF INVESTING IN FD
Following are the few disadvantages of investing in FD:
- Fixed interest rate: Fixed deposit interest rates do not grow over time or comply with inflation. Therefore, they are not the appropriate choice for investment if a person is trying to beat inflation.
- Deposit lock-in: A lump sum amount is locked-in for a specific period. One cannot use this money in case of emergencies if you want to ensure proper returns from the investment.
- Early withdrawal charges: If an investor decides to initiate a premature withdrawal from an FD, they will end up forfeiting a portion of their interest earnings from scheme.
- Limited tax benefits: Unless an individual specifically opts for tax saving FD’s, investors are not eligible for any tax exemptions or rebates on the fixed interest earnings.
WHY INVEST IN FIXED DEPOSIT?
Financial specialists may be inclined to dangers when they contribute in market-linked instruments to win higher returns.
Consequently, to guarantee adjusted money related development, financial specialists have to be looking for more secure speculation choices as well. Fixed deposits are secure and lead to ensured returns, as contradicted to more hazardous apparatuses.
Subsequently, indeed when a financial specialist loses cash on other speculation instrument, they can recoup a portion of their misfortunes from the FD ventures. Also, there’s no settled rate on settled store ventures. The rate of return for a financial specialist significantly depends on the bank or NBFC advertising the speculation choices.
ELIGIBILITY CRITERIA FOR INVESTING IN FD
Following are the people who can open a FD account in India:
- Indian resident
- Individuals or joint ventures
- Senior citizens
- Sole proprietorship
- Societies or club
- Partnership firms
DOCUMENTS REQUIRED FOR FD INVESTMENT
Investors got to yield certain papers with respect to their identity and private address to contribute in FD plans effectively:
- Identity proof
- Voter ID card
- PAN Card
- Aadhar card
- Address proof
- Electricity bill
- Senior citizens and minors need to submit age proof
HOW ASA WILL HELP YOU IN GETTING FD ACCOUNT
Contributing in FD is best for risk-averse speculators looking for a steady venture road to develop their reserve funds. FD’s are the one of the most excellent low-risk speculation choices that will offer assistance increment your reserve funds easily. And getting a settled store account isn’t that much of a complicated process. It is vital to select the right scheme for best FD rates based on your requirements. This is why ASA specialists will assist you selecting the fair right scheme which can get you extraordinary returns.
ASA’s group of experts will make you mindful of all the current FD rates whereas arranging to contribute. They will too make beyond any doubt that your company FD has the most noteworthy security evaluations, so that your central sum isn’t at risk. Our specialists will assist you get all the fundamental archives required for opening a FD account.
Tax is could be a tricky trade and one would like to make sure that they get it to the finest of their capacities. There various types of tax that one has to pay throughout their life such as, consumption tax, VAT, property tax and numerous others. Therefore, Tax planning is the examination of a monetary circumstances or plan from a tax point of view. The purpose of tax planning is to guarantee tax efficiency. Through tax planning all components of the financial plan work together within the most tax-efficient way conceivable.
Tax planning is an essential portion of an individual investor’s budgetary plan. Lessening of tax liability and maximizing the capacity to contribute to retirement plans are significant foe success. Tax planning can be used in number of ways, such as, for business, wills and properties.
Tax planning is resorted to maximize money inflow and minimize the money surge. Since tax is kind of a cast, the diminishment of cost shall increase the productivity. Every individual, in order to maximize the return shall increase the benefits by doing Tax Planning.
TYPES OF TAX PLANNING
- Short-term: Short-term tax planning means the planning thought of and executed at the end of the income year to reduce the taxable income in a legitimate way.
- Long-term: Long-term tax planning means a plan called out at the beginning of the income year to be followed around the year. This kind of planning does not help instantly as in the case of short range planning but is expected to help in the long run.
- Permissive:Permissive tax planning means making plans which are permissible under different law provisions, such as, planning of earning income covered by sec.10, specially by sec.10(1), planning of taking benefit from different incentives and deductions and etc.
- Purposive: Purposive tax planning means making plans with specific purpose to ensure the availability of maximum benefits to the assessee. It gives the chance to make different investment.
IMPORTANCE OF TAX PLANNING FOR BOTH SMALL & LARGE SCALE BUSINESSES
Following are benefits of tax planning for both small as well as large scale businesses and how planning plays an important role:
- Lowering the amount of taxable income
- Reducing the tax rate
- Allowing better control of when taxes get paid
- Maximizing tax relief and tax credits accessibility.
- Minimizing the tax obligation can provide more money for expenses.
- Accrual basis may produce favorable tax results for companies that have rare receivables and large current liabilities.
DISADVANTAGES OF TAX PLANNING
Succeeding are the few disadvantages of tax planning:
- It is more difficult than the cash basis
- Income taxes may be payable on revenue before payment is actually established.
HOW ASA WILL HELP YOU IN PLANNING TAX
As taxpayers, being aware of all kind of taxes can help on planning the financial year. There are many explanations why tax planning is important. Therefore, ASA’s team of expert professionals is well equipped to help you plan your investments while keeping in mind the taxation aspects.
Our experts will help you manage your tax more effectively and efficiently, whether you own a business or private individual, we will guide all through the way.
Reach out to our financial advisors today for extraordinary and time saving services. While we got your back on legal aspects you can focus on making your business a great success.
About Share Broking/Trading:
Share brokers are involved in trading stocks on the market, primarily for their clients. They always keep in touch with their customers,constantly update their information on market fluctuations and advise them when to buy and sell and at what price.
After registering on a recognized stock exchange such as the Bombay Stock Exchange or working in a brokerage company. Such brokers charge fees in the form of commissions,fees or deposits. This fee varies from broker to broker. Some traders charge a fixed fee, while others charge a certain percentage of the value of the securities traded.
Share trading is the buying and selling of company stock or derivative products based on company stock in the hope of making a profit.
Shares represent a portion of the possession of a public company and make up its worth or market capital. The trading of shares is one of the maximum popular and best-known markets in investing, together withforex and commodities.
You can create money from share trading by retailing shares for a higher price than you bought them for or when a company pays dividends.
There are three main methods of profiting from the price movement of shares. These are:
- Capital Growth
- Tax Benefits
- CAPITAL GROWTH: Capital growth is the appreciation in the value of an asset/share over a period of time. It is calculated by comparing the current value, sometimes known as market value of an asset/share, to the amount paid when you originally bought it. This is the most communal way to make cash from share trading. This is basically where you sell shares for more than you paid and get a profit.
- DIVIDEND: Dividend refers to aincentive cash or otherwise, that a company provides to its shareholders. This is when the managements of a company profits to shareholders. Dividend payments are based on the number of shares you own. These types of shares are called income shares. It is not obligatory for a company to pay dividend. Dividend is usually a part of the profit that the company parts with its shareholders.
- TAX BENEFITS: A share can be completely franked. This is a term use to describe when a company has already paid tax on your dividends. You can use franking credits to decrease the tax you pay on extra income. A franking credit is a type of tax credit paid by businesses to their shareholders alongside with their dividend payments.
ADVANTAGES OF SHARE TRADING
Following are some of the advantages of share trading:
- LIQUIDITY: Shares are a liquid investment. It is a measure of how many buyers and sellers are present and whether transactions can take place easily. You get your money two days after you make a trade.
- CAPITAL GROWTH: Shares have proven to be a solid investment for long-term capital growth.
- TAX: You may be eligible to receive a discount on any capital gains tax if you have held the shares for more than 12 months.
- SHAREHOLDER RIGHTS: When you become a shareholder, you can vote on company decisions and attend annual general meetings (AGM’s).
RISKS OF SHARE TRADING
Share trading is a way to make money but it possesses some risks as well. Some of the risks of share trading are as follows:
- VOLATILITY RISK: Shares can be a volatile advantage. The price can rise and fall rapidly depending on a number of things such as good or bad company performance, company statements and performance of the market.
- TIMING RISK: The share market moves in circles. Buying shares in a bull market is no guarantee of future performance.
- GOVERNMENT RISK: Laws can change and this can impact your share price and investment strategy.
- OVERSEAS RISK: Investing in international shares exposes you to risk from currency fluctuations and foreign government.
TYPES OF TRADING STRATEGIES
There are four main types of forex trading strategies. They are as follows:
- SCALPING: Scalping is the most short-term form of trading. Scalp traders only hold positions open for seconds or minutes at most. These short-lived trades target small intraday price movements. This style of trading requires tight spreads and liquid markets. As a result, scalpers tend to trade major currency pairs only.
- DAY TRADING: For those that are not comfortable with the intensity of scalp trading, but still don’t wish to hold positions overnight, day trading may suit. Day traders enter and exit their positions on the same day, removing the risk of any large overnight moves. At the end of the day, they close their position with either profit or loss.
- SWING TRADING: Unlike day traders who hold positions for less than one day, swing traders typically hold positions for several days, although sometimes as long as a few weeks. Because positions are held over a period of time, to capture short-term market moves, traders do not need to sit constantly monitoring the charts and their trades throughout the day. Thus, this is a popular trading stylefor those who have commitments.
- POSITION TRADING: Position tradersare focused on long-term price movement, looking for maximum potential profits to be gained from major shifts in prices. Trades usually span over a period of weeks, months or even years. As position traders are not concerned with minor price fluctuations or pullbacks, their positions do not need to be monitored the same way as other trading strategies.
WHY INVEST IN STOCK MARKET?
Investing in stock can seem unnerving if you are not aware of its functioning. However, investing your money does not have to be complicated. Depending on your needs, income and when you’ll need to access the money, you can take advantage of a variety of different investment strategies. These include, investing bonds, precious metals and foreign currency. Investing your money in shares is certainly a good option since; most stocks pay your dividends, which provide a stream of income for you without having to sell shares. Investing in the stock market is the only method most people have of building actual wealth. The right stock investment helps you extent your financial aims with the right mix of investments. It decreases the risk of loss with a well-planned approach for buying and selling shares.
WORKING OF STOCK MARKET
A person cannot go straight to the stock market to buy or sell shares. Buying and selling of shares has to be done from end to endbrokers. There are individuals, companies or agencies authorized by SEBI to trade on the stock exchange.
In order to be able to invest in share market in India, follow the below-mentioned procedure.
- Get a PAN or Aadhar Card: It is a mandatory requirement for investing in India. It is required for KYC procedure.
- Get a Broker: Buying and selling of shares has to be done through brokers. They are authorized by SEBI to trade on stock exchange. They will charge a brokerage fee for the assistance provided by them.
- Get a DEMAT account: After you get a broker, the next step is to open a DEMAT account. This account will hold the stocks that have purchased and will reflect them in the name of the buyer.
DOCUMENTS REQUIRED FOR OPENING DEMAT ACCOUNT:
Following are the documents required for opening a DEMAT account:
- PAN Card ( mandatory requirement for all investors)
- Aadhar Card
- Passport size photograph
- Cancelled personalized cheque
- More than 3 months of bank statement
HOW ASA WILL HELP YOU IN SHARE TRADING/BROKING
Investing in stock market can get you certain good returns if you work with correct strategies and techniques. Knowledge comes with experience if you have experience then trading of shares won’t be much big of a deal for you but if you don’t know anything about it and want to start from scratch then ASA is here to help you in taking steps very carefully. ASA professionals will provide good tips and advice about trading and help you raise your portfolio.
Our team of experts will communicate with you in the best possible way about all the requirements. We will also ensure that all the work is done accordingly and will monitor your portfolio regularly to avoid unnecessary risk.
INITIAL PUBLIC OFFERING (IPO)
Initial Public Offering (IPO) is the process by which a private company can go public by sale of its stocks to general public. It could be a new or old company which decides to be listed on an exchange and hence goes public.
Companies can elevate equality capital with the help of an IPO by issuing new shares to the public or the present shareholders can sell their shares to the public without raining any fresh capital.
The organization which offers its shares known as an ‘issuer’ does so with the help of investment banks. After IPO, the company’s share/ equities are traded in an open market. Those shares can be more sold by investors through secondary market in trading format.
Although, IPO offers many benefits, there are also significant costs involved, chiefly those associated with the process such as banking and legal requirements to disclose important and sometimes sensitive information.
Most companies accept an IPO with the help of an investment banking firm acting in the capability of an underwriter.
ADVANTAGES OF IPO
An IPO accords several benefits to the previously private company:
- Widening and diversifying equity base.
- Allowing cheaper access to capital.
- Increasing exposure, prestige and public image of the company.
- Attracting and retaining promising management and employees through liquid equity participation.
- Promoting acquisitions
- Creating numerous financing opportunities: equity, convertible debt, cheaper bank, loans, etc.
DISADVANTAGES OF IPO
There are several disadvantages to completing an initial public offering:
- Significant legitimate, accounting and marketing costs, many of which are ongoing.
- Requirement to disclose financial and business information.
- Meaningful time, effort and attention required of management.
- Risk that required funding will not be raised.
- Public dissemination of information which may be useful to competitors, suppliers and customers.
- Loss of control and stronger agency problems due to new shareholders.
- Increased risk if litigation, including private securities class actions and shareholder derivative actions.
HOW TO INVEST IN AN IPO?
- DECISION: The very first step is to choose the IPO that you wish to apply for. A considerable way to decide is by going through the organization’s prospectus. It can be found on SEBI’s website. The prospectus gives a fair-minded idea about the company’s business plan and its determination.
- FUNDING: One can use his/her savings to invest in an IPO. But if there is a lack of funds, then there are certain banks and NBFC that are willing to lend money at a particular rate.
- DEMAT-CUM-TRADING ACCOUNT: A DEMAT account is an important requirement for an IPO. A DEMAT account can be opened by submitting PAN or Aadhar Card.
- APPLICATION PROCESS: One can apply for an IPO through trading account or bank account. Once demat-cum-trading account is activated, you need to be aware of Application Supported by Blocked Amount (ASBA) facility, which is compulsory for IPO application. The ASBA is an application that authorizes banks to block money in your bank account.
- BIDDING: Bidding shall be done while applying for shares, as per the lot size mentioned in the prospectus. The upper limit is called Cap price and the lower limit is called the floor price. Bidding shall be done within this range. Bidding can be revised during an IPO and you will need to block the money required while bidding.
- ALLOTMENT: In case of a full allotment, you will get a Confirmatory Allotment Note (CAN) within 6 working days after closure of IPO. Once the shares are allotted they will be credited to DEMAT account. The final step is to wait for the listing of shares on stock exchange which is done within 7 days from final issue.
WHY IPO IS A GOOD OPTION?
Investing in an IPO act as a click bait for investors owing to the underlying belief of buy low and sell high. It is a common belief amongst the investors that the stock prices would in most cases increase after an IPO. Thus, the rush to subscribe to quality stocks of the organizations with sound fundamentals at a reasonable price.
Due to satisfactory price, one can buy multiple shares of the issuer company. After the company has established itself, it would be very expensive to buy multiple shares of the company as the current market price.
The advantage for a company to raise funds via an IPO over other traditional financing channels like loans etc is one way of coming into the notice of the public and the opportunity to improve market capitalization.
HOW ASA WILL HELP YOU TO INVEST IN AN IPO
Investing in an IPO can prove to be a good decision but choosing in which IPO to apply can be a hard one to make. ASA will help you make that decision wisely. Our team of experts will guide you and suggest you about which IPO you should invest in. Our representatives will be there at every step from helping you make wise decision till allotment. We’ll get you through it all.
Our representatives are very well aware of the market situation. They keep a close eye on all the market fluctuations and are well informed about all the documents required.
SIP stands for Systematic Investment plan, which allows one person to regularly invest some small amount of money in the mutual fund of their preference.
How it works?
Every time you invest in a mutual fund plan through SIP, you will buy a certain number of fund units corresponding to your investment amount. When investing through SIP, you don’t need to grasp the market timing because you can benefit from both bullish and bearish market trends.
When market is down one can purchase more fund units and vice versa.
It is very important to make sure before investing in any fund that your investing will help you achieve desired goals, for which you can count on ASA, our professionals will provide you the best service in the matter, we will ensure that all your requirements are fulfilled. After considering every possible factor with you , they will suggest you the best mutual funds in which you should initiate SIP into.
They will also make you aware what are risk involved in the investment and will accordingly suggest you the investment with minimal risk.
In finance, equity is ownership of assets that may have debts or other liabilities attached to them. Equity is measured for accounting purposes by subtracting liabilities from the value of the assets.
(Acc. To Wikipedia)
The main benefit of equity investment is that it can increase the value of the amount that has been principally invested. This usually comes in the form of capital gains and dividends.Equity funds provide investors with diversified investment options, usually with a minimum initial investment amount.
Equity investors buy the shares of a company with the expectation that they will appreciate in the form of capital gains and / or generate equity dividends. If the equity investment appreciates, the investor sells his shares or liquidates the assets of the company and meets all his obligations, the investor will receive a currency difference. Stocks can improve the asset allocation of investment portfolios by increasing diversification.
ASA, offers the end to end consultation before you choose the right equity to invest in. our team of experts will guide you at every step of it. We will make you aware of all the possible risk involved and how the market functions at certain time and how will gain through investing in equity , we got it all covered for you under one roof- ASA.
We are a modern day taxing and investment consulting firm that offers to cater its clients in best possible manner.
Insurance is a means of protection from monetary misfortune. It is a form of risk management, fundamentally utilized to fence against the chance of an unexpected or questionable misfortune. An entity which gives protection/insurance is known as an insurer, insurance company or underwriter. An individual or entity who buys insurance is known as an insured or as a policyholder.
The insurance exchange includes the insured expecting an ensured and known generally little misfortune within the frame of payment to the insurer in trade for the insurer’s guarantee to compensate the insured within the occasion of a secured misfortune. The misfortune may or may not be monetary, but it must be reducible to money related terms, and usually includes something in which the insured has an insurable interest set up by proprietorship, ownership, or pre-existing relationship.
Insured will get a contract called, the insurance policy which will have the details of the terms and conditions under which the insurer will compensate insurer.
ADVANTAGES OF HAVING INSURANCE POLICY
Some of the main advantages of insurance are as follows:
- Gives economic protection: It gives financial and budgetary security to the insured in case of unforeseen misfortunes.
- Share risks: Since people are exposed to various risk insurance helps to share the risk among the insured. The insurance company reduces the risk of insured in exchange for premium.
- Maintains standard of living: insurance provides the security against the unforeseen risk which in return help people to maintain their standard of living. The insurance company will safeguard in terms of money to avoid any crises.
- Helps business to function smoothly: in the case of unfavorable events insurance plays an important role to let business function without any disturbance. Since business get monetary claim in case of loss or damage.
TYPES OF INSURANCE IN INDIA
In India insurance is generally categorized into 2 parts:
- LIFE INSURANCE
- GENERAL INSURANCE
Life insurance covers the dependents in case of the untimely passing of the policyholder. In such cases the insurance company pays a pre-approved amount to the policy holder recipients.
Kinds of life insurances:
- Term life insurance: High amount assured coverage at low premium.
- Unit Linked Plans (ULIPs): Long-term investment option with more flexibility to invest.
- Endowment plans: Long-term saving option for people with lower risk craving for investment.
- Money back life insurance: Short-term investment to meet short-term monetary goals.
- Entire life insurance: Life exposure for whole life.
- Child plan: Builds funds for your child’s future.
- Retirement plan: Long-term savings and retirement planning.
All non-life insurance arrangements are clustered beneath general insurance. These policies are for shorter period of time (ordinarily twelve months), but policyholders have the choice of reestablishing them.
Kinds of general insurance:
- Health insurance: Includes surgical & medical expenses.
- Travel insurance: Covers travel and medical contingencies while travelling.
- Motor insurance: It is mandatory to have motor insurance in India. It covers both car and two-wheeler insurance.
- Home insurance: Covers the structure and content of your home from fire, natural or man-made calamity.
HOW ASA WILL HELP YOU GET INSURANCE
Insurance is something which everyone must have these days be it to cover their medical expenses, travel expenses or secure their motor vehicles. Having insurance is the best way out of these expenses.
Get an expert’s word of advice from ASA on buying the just right kind of insurance according to your needs. ASA’s team of great and experienced professionals are to assist you about the various kinds of insurance available in India and what are their eligibility criteria and documents required with each of them.
Our experts will give answer each and every query of yours about any kind of insurance policy you want to know about.