Mutual funds are becoming a very popular way for individuals to invest in India. Instead of buying shares in individual stocks, people are opting for mutual funds these days says Sachin Karpe.
There are 4 major pros of investing in mutual funds:
- Mutual funds are an easy way for an investor to buy stocks which would otherwise be difficult to manage.
- Mutual funds can buy numerous individual stocks across various industry sectors, which make it more diversified.
- Mutual funds are handled and managed by professionals who are qualified and have industry experience.
- There is no maximum or minimum amount for investing in mutual funds. You can invest even if you don’t have much financial or investing experience.
The Cons of Investing in Mutual Funds
But, where there are advantages, there are disadvantages too. Below are 4 major cons of investing in mutual funds:
- Managing mutual funds could be expensive. There are sales commissions involved. There is an annual fee, regardless of the performance.
- Mutual fund stock prices are calculated and disclosed to public only once every day. Every mutual fund is made for multiple investors, the price fluctuates depending on the net asset value, and hence the price isn’t set until the market day ends officially.
- In mutual funds long term capital gains are taxed at a lower rate than short term capital gains.
- In mutual funds you can make a loss on an investment but still end up paying taxes.
This is what I, Sachin Karpe, feel about mutual fund investments.
ATMs to defend themselves from attacks Automated Teller Machines (ATMs) may soon be armed with a mechanism that would spray hot foam in the face of the attacker if he tries to force it open. With the number of attacks on ATMs increasing in recent years, the new technique may be particularly well suited to protecting ATMs or cash transports. Researchers at ETH University in Zurich have developed a special film that triggers an intense reaction when destroyed. Sachin Karpe explained that while protective devices that can spray robbers and banknotes already exist, these are mechanical systems that are not very expensive and are less prone to malfunctions.
Indian Public sector banks have been the driver of Indian economy since pre-independence. They have funded country’s ambitious projects in infrastructure, industries like fertilizer, petroleum to name a few. They have also fueled India’s agricultural growth by financing small time farmers. Off-lately they seem to be facing some challenges that has eroded their balance sheet. Most banks are troubled by Non Performing Assets (NPAs) largely due to the increasing inflation and fluctuating Rupee/dollar value. This has caused their provisions to sour quarter after quarter. In short terms, the loans that have gone bad as the takers have defaulted on returning it back within a stipulated time. Major reasons behind this is the inability to re-pay the loan as interests have increased and rupee has become expensive. Defaulters who deal in an off shore business have mostly defaulted due to their inability to pay back loan. Another challenge faced by these banks are the rapid expansion in terms of products by private banks. While public sector banks enjoy an undisputed public confidence and government backing, private banks are slowly lapping up the subscriber base by wooing them to their interesting product portfolio. Public sector banks certainly need to brace up and catch up with their private counterparts and shed away the traditional working way. Banks like State bank of India recently raised money through QIP, but it did not raise the expected amount. Blame it to the versatile economy, may be. But banks need to get rid of NPAs and come back to green to fuel other major developments in India.
Markets sputter to a weak start, in the absence of any key triggers in the week to come, except for the flagging off of the earnings season, beginning 10th Jan when INFY and INDUSINDBK come up with how they have fared in the quarter ended Dec’13. The weekend too has had no surprises from the overseas (more…)
While the economy continues to dwindle amidst the fear of stimulus taper, exports have risen owing to good monsoon and a healthy agriculture produce. Gold, which remained on the hit list of government (to curb import) has now come much under control, observes Sachin Karpe.
However, it is important to educate people about various forms in which gold investment can be done. It may not always be necessary to buy gold in physical form as it does not give a good re-sale value. Gold ETF (exchange traded funds) or gold funds offered by mutual funds are attractive options to (more…)
Sachin Karpe will give us an insight on why sensex rose to its highest in 2 years. Sign of US shutdown coming to an end is one strong reason. Another global cue is that Fed would not taper the stimulus till 2014, sending out a positive sentiment across equity markets as it assures liquidity across equity markets. (more…)