Roopesh Kohad

Aspirations◦ Home/Car/Holidays

◦ Luxuries

Retirement – No pension, More life expectancy

When will I have enough money to fulfill my dreams and not worry about future !!!

The session is for knowledge purpose

Please follow advice at your own risk

Basics◦ Asset Classes

◦ Liabilities Classes

Pitfalls

Deep dive

Fixed Income/Interest ◦ FD◦ EPF/PPF◦ Bonds

Real Estate ◦ Land/Residential/Commercial

Debt◦ Mutual Funds

Equity◦ Stocks◦ Mutual Funds

Commodities◦ Gold/Silver◦ Others

Insurance◦ Term

◦ Unit-Linked

◦ Others

Loans◦ Home/Auto/Personal

◦ Credit Card

Credit card◦ Usurious rates 2.5/3 per month ~ 36 % per annum

◦ Interest on whole outstanding amount even if partially paid

ULIP is a mix of Investment + Insurance◦ Charges

◦ Stories

Mutual Funds◦ Classes & Categories

◦ Splitting hair !!

Safe & guaranteed returns

Fixed Deposit – Tax but guaranteed, No Limit!!

EPF/PPF – Tax Fee but Limit!!◦ Psychological factor

Bonds

NCDs

FD – Retail banks, Cooperative, NBFCs

Cooperative banks with higher Interest◦ High risk

◦ Deposit only upto 1 lakh is insured

Better invest in NBFC with good credit rating

Capital Gains but Risk!

STCG is taxed but LTCG is tax-free!

Instrument - Debt Mutual Funds◦ Liquid

◦ Income

◦ MIP

◦ Gilt

First best known investment to Indians

Plot, Residential, Commercial

Immovable, highly localized

No market, No price discovery

Mostly speculative as less number of participants

Handsome returns in last decade but will it last???

Second best investment known to Indians

Unproductive asset, mainly ornamental

Price is inversely proportional to economic growth

Is it time to buy / sell???

Equity means ownership

Owning part of a business like a partnership

Routes◦ Private Equity

Venture/Angel Funding/PE Investors

◦ Public Equity

Funded by general public (*)

Raise capital for◦ Entrepreneurs

◦ Job creation

◦ Participation for general public

Governed By◦ SEBI

High Risk, High Rewards !!

Returns are lumpy

Best returns as compared to any broad-based asset classes

Capital Appreciation + Dividends

LTCG & Dividends are tax-free!!

Stories◦ 10k invested in Infosys in IPO is > 1 Crore in 1993

◦ 2008 Financial

Routes – Mutual Funds, Direct Equity

Types◦ Large/Mid/Small◦ Hybride – Equity + Debt◦ Thematic

Things to Look for◦ AMC – Asset Management Company◦ AUM – Asset Under Management◦ Expense ratio◦ Entry / Exit Load◦ Lockin period◦ Benchmark Index◦ Fund Manager

Risk Category

Pros◦ Diversified investment, so moderate gain/loss

Cons◦ Difficult to understand underlying business

◦ May not be enough for risk taker investor

Directly investing into stocks

Need to have strategy

Need to understand markets

Need to evaluate, understand the company

Pros◦ Highly rewarding

◦ Relate to the business, company

Cons◦ Volatile

◦ Could be highly destroying

Fundamental Analysis◦ Balance Sheet◦ P&L statement◦ Result statements◦ Industry, Economic outlook◦ Dividend history◦ Promoters

Technical Analysis◦ Identify chart patterns◦ Useful to time the entry/exit

Use fundamentals to evaluate company, use technical analysis to enter/exit

Place to buy/sell equities

Primary Market - IPO

Secondary Market◦ Trade in already listed stocks

Stock Exchanges◦ BSE/NSE

◦ Pune has a stock exchange !!

Brokers◦ Consultants

◦ Online – ICICIDirect, Sharekhan etc.

Manipulated

Too Complex – require financial knowledge

Only for rich people

Symbol of greed

Formula

A=Amout

P=Principal

R=Rate of Interest percent per period

N=Number of periods

Inflation◦ CPI – Consumer Price Index

◦ WPI – Wholesale Price Index

Depreciation◦ Time value of money

◦ Even cash is depreciating

◦ Opportunity cost

Growth◦ GDP – Gross Domestic Product

Inflation is inversely proportional to Growth

Try to invest early in basket of High (Equity), Medium (Mutual Funds), Low (Fixed Income) return assets while minimizing risk

Conservative – Fixed Income & Debt

Slight appetite for Risk – Fixed Income/Debt + Equity (MF)

Risk appetite, not interested, Low Networth –Equity MF

Risk appetite, not interested but HNI category – PMS

Risk appetite & interested – Direct Equity + Equity MF

Timed◦ Buy on dips

SIP (Systematic Investment Plan)◦ Recurring

◦ Available for all “Liquid” asset classes

Single view of your assets, liabilities, investments, expenses called as Portfolio◦ Links to online bank, trading, loan, deposit

accounts

◦ Include offline assets like land, house, gold etc.

Examples◦ ICICIBank Money Manager (powered by Intuit)

◦ Perfios, Mprofit

Nobody’s interestedWhy?◦ Detrimental to Financial Industry◦ Its like CSR

Financial Advisors◦ Its like finding a good teacher/mentor

Half-hearted attempts by govt agencies like Stock markets, SEBI etc.Watch this short film (An Idiot by IDFC) https://www.youtube.com/watch?v=vU1l1TB7GzI

Get a Demat Account & Trading account for self/family like ICICIDirect or FundsIndia

Apply to IPOs, Bonds

Start SIP into some MFs

Slowly dabble into equities

Keep track of your investments

Which investment gives highest returns?

Health

Education

Goodwill