Benefit of Systematic Investment Plan (SIP)



In last article I have mentioned the benefits of investment in mutual funds in India. Where traditionally investors want to invest their hard earned money in fixed deposit because due to its secured nature but now in past several years investors approach towards investment in mutual funds has drastically changed and investors taking risk (at certain level) for good return which is not possible in fixed deposits.

So everybody knows the benefits of mutual funds. But when we hear the word mutual fund, the very first thing which comes in everybody mind is SIP. All of us correlate SIP with Mutual Funds. But many of us don’t know the actual meaning of SIP.

So very first question arise in our mind is what is SIP and how SIP is correlate with Mutual Funds?

Now before I getting start discussing all about SIP, I want to share one incidence of my friend name Vijayan 28 years old working in automobile company as design engineer live with his family in Bangalore. He is very well educated love music and live happily with his family. As a common man he is also want to secure his family future like others. So typically he follow his father and grandfather for savings. There savings predominantly invested in fixed deposits (FDs), recurring deposit (RDs) and insurance plans. Vijayan picks his investment habit from his father and grandfather and continue to invest in these traditional options. He met me last year and ask me why not RD and why SIP (as I am regular investor in mutual funds). Then I tell him the benefit of SIP.

Systematic Investment Plan (SIP):

What is SIP?

In simple term, SIP is an investment tool that helps you to invest regularly in small portions or we can say that small amount of money investment on predefined date of every month. SIP is a smart financial planning tool that helps you build wealth over a period of time. You are not required to invest lump sum money from your pocket.

You can invest in SIP on monthly or quarterly basis and the minimum amount for most the mutual funds scheme is Rs 1,000/-. However the tenure may vary scheme to scheme. In order to maximise your returns, it is always advisable to stay invested for longer period of time.

Advantages of Investing using Systematic Investment Plan (SIP):

Regular and Discipline Investment:

The basic funda of investment is to always focus on regular and disciplined approach. SIP allows one to invest a fixed amount of money at regular intervals – monthly or quarterly basis. In most cases amount is automatically deducted from your bank account. For example if you decided to invest Rs 1000/- every month in particular mutual fund. You can start an SIP by giving post dated cheques to the mutual fund or you may take advantage of the Electronic Clearance System (ECS) in which the amount would be automatically debited from your account on a specific date. So at end of the year you invest Rs 12000/- in mutual fund. This amount seems quite big for common man. So he may be unable to invest this amount in lump sum. So SIP brings benefit of regular and discipline investment.

Rupee Cost Averaging:

This is called important benefit of investing in SIP as it saves you getting hit by market fluctuations. Investors invest fixed amount of money every month in any type of mutual fund which brings more units when NAV/price is low and less units when NAV/price is high. So its hardly matter what is current market situation is. At end of particular period you always have higher amount of units. For example, you invest Rs 1000/- in first month and NAV (Net asset value) is Rs 10/- so you get 100 units in first month. In second month market comes down and NAV was Rs 5/- so now you get 200 units in second month. Now in third month market goes up and NAV was at Rs 20/- so now you get 50 units. So after three month total units you will get 250. This brings rupee cost averaging over a long period of time.

From below table you can more easily understand how SIP works?

Investing through SIP is done using ECS or the Electronic Clearing System. This is very easy way and money will be debited directly from your bank account towards mutual fund investment.

SIP Investment


Investment Amount


Units Purchased





















































Average Price per Unit



One Time Investment


Investment Amount


Units Purchased








Average Price per unit



From above example it is very clear that if we do lump sum investment then we have less amount of units at end of particular period as compare with investment done through SIP.

Other Benefits:

A Systematic Investment Plan offers so many other benefits that make investment more comfortable and enjoyable. Investor can start investment with a low amount of Rs 500/- or 1000/- per month. Also many mutual fund schemes waive off entry and exit load if investment is done through Systematic Investment Plan (SIP). Investor can take benefit of SIP in taxation also as SIP’s are taxed for capital gain on first in first out basis.

So at the end I only say that SIP’s are more flexible, convenient and easy for investment in mutual funds. In SIP, Investors can enjoy the benefits of high return with low risk. Key benefit of SIP is that it gives you the opportunity to maximize your returns without fear of current or future market situation. The only rule which you want to follow is Start early, Stay Longer & Be Discipline while investment in mutual funds.

For more clarification or want more detail on this you can easily connect with me at or at my facebook page @manishabhatia.rupayabazaar

7 Benefits of Investment in Mutual Funds


In India, traditionally investor want to invest their hard earned money in Secured options like Fixed Deposits, Recurring Deposits or Bonds etc. where they can earn a fixed amount of return on their investment rather than investing in Unsecured options like Shares and Mutual Funds where they can earn much higher return in comparison with return earned in secured options. Secured options are usually having low potential risk and low return. On the other hand unsecured options having high potential risk and high return.

With this unique feature of unsecured investment options, new investor are often faced with 2 options as far as investing in equity is concerned. But fortunately, modern day investors have the choice of investing in mutual funds which provide a unique balance of high return with less risky as compare with direct investment in shares.

For new investors, benefits of investing in mutual funds are always have upper hand while investing in Shares. In this article we discuss 7 major benefits of Investment in Mutual Funds in India.



This is one of the important feature of mutual funds. Mutual Funds diversify the risk of investment. In shares where you can invest only in limited companies but in mutual funds you have much higher range of stocks which keep your risk much lower than invest in shares. If you want to create your equity portfolio by investing directly in shares for this you have much higher amount of capital. On the other hand for mutual fund investment in diversified equity fund with an investment of as low as Rs 1000/- in SIP option.

Professionally Managed:-

Mutual Funds are professionally run by an Expert. As a common man we unable to understand the future market indications. But if you invest in mutual fund, which are professionally managed by fund managers who have years of relevant financial market experience and they are supported by a team of subject matter experts who help pick investments and strategies that help maximize profits for the scheme’s investors.

Tax Efficiency:-

Mutual funds are more tax efficient than most other investment products. Long term capital gains (holding period of more than 1 year) for equity mutual funds are tax exempt. Further dividends of equity funds are also tax free. For debt funds long term capital gain (holding period of more than 3 years) is taxed at 20% with indexation. Once indexation (due to inflation) is factored in the long term, capital gains tax is reduced considerably, especially for investors in the higher tax bracket.

Economics of Scale:-

Mutual funds with their large investment pool provide unparalleled economies of scales to retail investors, which means mutual funds with huge assets under management can spread all expenses over a large number of assets and hence can afford to spend significant funds in research, hire the best talent to manage money.

Higher Liquidity:-

One of the biggest reasons why mutual funds remain a hot favourite amongst all kinds of investors is that an investor can get in and out of the market with relative ease. This is especially true in the case of debt funds many of which have zero entry and exit loads and can be redeemed easily as and when you need them. Moreover, a few fund houses also have unique schemes that allow benefits such as instant redemption and debit card withdrawal of your mutual fund investment in case of emergencies. This is a contrast to popular fixed rate alternatives such as fixed deposits that have high premature withdrawal charges.  

Variety of Modes of Investments:-

Mutual funds also offer investors flexibility in terms of modes of investment and withdrawal. Investors can opt for different investment modes like lump sum (or one time), systematic investment plans (SIPs), systematic transfer plans (from other mutual fund schemes) or switching from one scheme to another.

Low Transection Charges:-

When investors buy multiple securities to diversify their investments they are liable to pay separate securities transaction charges for each transaction. This can add up to a substantial amount and impact the investor’s returns negatively in the long term. In comparison, when you buy mutual funds, the investor gets the same or greater level of diversification without having to pay multiple securities transaction charges. In the case of mutual fund fees such as securities transaction charges as well as all fund management charges are represented by the fund’s expense ratio, which is much lower than the cumulative individual securities transaction charges that an individual is liable to pay.


In this blog we have discussed the key benefits of investing in mutual funds versus directly in shares. While investing directly in shares definitely has its own advantages, the benefits of investing in mutual funds outweigh that of investing directly in shares, especially for new investors. If you have expertise in picking stocks at the right valuation, you can invest directly in shares. However, if you lack the expertise then investing in mutual fund is definitely a much better option.

Further more detail or want some more clarification on this you can easily connect with me at or at my facebook page @manishabhatia.rupayabazaar  

7 reasons why you should hire a financial planner?

We believe that every financial decision in our life should be based on some goal. The goal can be building a retirement nest egg, saving for your children’s college education or wedding, saving for a down-payment for property purchase, protecting your family from financial distress due to unforeseen risks, protecting your family from health risks, protecting your home or business from fire or other hazards etc., but unless you have an objective, you will not be able to make the right decision.

We also were chased by individuals who would specialise in selling a particular product. It could have been insurance, tax planning products, loans etc. In most events there was significant mis-match between what we wanted and what we got. The products would service most but not all requirements of the problem we had.

In India there is myth that financial planners are only hired by the rich class or the millionaires, but today the times are changing, now even a common man can hire a financial planner so that he can manage his finances in the most appropriate and efficient way. Financial planner charge a good sum of money as their fees but this money can be called as an investment, we should pay this fee so that we can eliminate all the errors which we personally make while managing our money, a small mistake can break your whole empire.

Below are 7 main reasons why should hire a financial planner:-

  • Provide regularly dedicated attention:

Financial /investment advisors put in all their time and efforts to managing their clients’ financial goal. Their functional abilities can be truly advantageous with their knowledge & contacts, their approach to investment opportunities, overall experience and vocational expertise.

  • Plan your financial life:

Even if you have a do-it-yourself philosophy about handling your money, working with a financial advisor is one very smart move you can make to channelize your investments. They will help you organise your financial life and also ensure you start early to maximise benefits. A good financial advisor can help to...

Identify and carefully prioritise financial goals and chart out a clear roadmap for achieving them

Help demystify complex financial decisions and provide new insights and investment options: for example: they can help segregate real and exaggerated/understated  needs when it comes to how much to invest for child’s education and also advise on how to get best returns through combination of products

Will consolidate your finances and plan savings and investments around your financial needs including detailed plans for expense planning, retirement, insurance, tax and estate planning needs

  • Set realistic financial goals.

Majority of the people would disagree with this point, when we set our financial goals all by
ourselves we tend to set an unrealistic goal which is impossible to achieve or we would set a goal which can be easily achieved. In the earlier case we would be annoyed and disturbed if we fail to achieve this would affect our life. In the later we achieve our goal well in advance and after that we become lethargic and become less productive. A certified financial planner would help you to set a realistic financial goal which is based on your current financial status. Apart from this they will also guide you to achieve this goal.

  • Create a financial plan:

In the previous point we saw that a professional financial planner would help you to set a realistic financial goal which would be the best for you according to your current financial status and future potentials. Now the planner would also help you to create a solid plan by which you can easily achieve your financial goal. The plan would consist of a detailed plan on how to invest, where to invest and when to invest. With the help of professional financial planner you can make a financially secure future.

  • Tax Planning:

Majority of the people who choose to take the help of financial planners are liable to pay taxes. As a common man we wouldn’t know how to get benefitted while paying the taxes. There are numerous schemes and plan which would be very beneficial for the tax saving, these plans are called tax saving schemes. The plan which suits you the best would be suggested by your financial planner. This would help you to save more money without cheating the government.

  • Save Time and Reduce Stress:

Why do we make an investment? A majority answers will usually revolve around the following common grounds:
o To be able to achieve our continual objectives in life.
o To be able to enjoy the ripe fruits of our lifelong toil, after our retirement.

Managing our investments on our own, can sometimes be an obstacle to meeting the above goals. Wondering why? Because that requires a greater amount of time, research and persistence to invest for making strategic decisions. An efficient financial /investment advisor will proactively take all your finance management responsibilities upon their shoulders.

  • Provide professional guidance:

When you hire any professional you expect that level of service from them. They offer the services in such a way that a common man could not be able to do. Same, when you hire a financial planner he will give you ideas which would be very helpful to you. Such ideas would be thought of by a common man. They advise you to invest in such policies where you can get the maximum returns and those policies would be unaware to you. This is what makes them a professional.


In this article we have discussed, how personal financial planning can help you meet your short term, medium term and long term financial objectives. You can engage a financial planner, to prepare your financial plan and implement it. However, you should remember that, the effectiveness of your financial plan will depend on the level of your engagement in the process. In our next article, we will discuss some important steps in the financial planning process.

Further more detail or want some more clarification on this you can easily connect with me at or at my facebook page @manishabhatia.rupayabazaar     

How to invest safely in share market and earn profit

The stock market is a great place for making money so lots of people believe that investing in shares is like money making machine which can turn them into millionaire over a period of time. Well, it is true that lots of investors made good profit through investment in share market. But it doesn’t mean that every investor make profit. Many experts say that money making in equities is not easy task. But, I believe and think in contrary direction. I believe that everybody can make profit and not only profit but may be huge profit over a period of time.

Why majority of people do not make profit from share market? This is because many investors invest their money without proper knowledge about share market and as a result they lost their hard earned money in share market. It is also true that due to volatility nature of share market in last few years has left investors in state of confusion. They never make mind whether to invest, hold or sell in such a scenario.

Although many experts believe that there was not sure shot formula for make profit in share market. But I believe that with the help of some basic knowledge about share market and after taking some important factors consider everybody can make profit. Today I am going to discuss some golden rules of share market which, if followed prudently, increase your chances of getting a good return.

Golden Rules for Investing in Share Market:-

  1. Information about share market

Before start investing, every investor should know what share market is and how it is work. I believe many investors already know about this. Share market is a market where shares are bought and sold. Besides shares, other instruments like bonds, mutual funds and derivative contracts also traded in the share market.

There are two types of share market:-

Primary Share Market – Companies enter into primary market to raise funds. It is in the primary market that a company gets registered to issue shares to the public and raise money. In case a company is selling shares for the first time, it is called an Initial Public Offering or IPO.

Secondary Share Market – In this type of market investors trade already listed shares by buying and selling them. Normally in a share market one investor buy shares form other investor at prevailing market prices through broker.

  1. Avoid Expert Opinion about Shares

Typically investor decision is heavily influence by action of experts, neighbours or relatives. He usually invest in that particular stock after hear opinion from other people. Without using his judgement or mind about that stock he lose his hard earned money in share market.

I suggest never influence by action of such experts. I personally believe that these experts has only moto of their profit and not yours profit. Always apply mind before investment in share market.

  1. Study before buy Shares of any company

Majority of investors who lose their hard earned money in share market never think about in which company they going to invest. Investors generally go by the name of a company or the industry they belong to. This is however not the right way. They buy stocks without consider which type of company it is and what are their past performances.     

I suggest always take consider the stock company and its past performances before investing in share market. Proper knowledge about Share Company will reduce risk of losing money in minimal state.

  1. Invest in Stocks you understand

Basic fundamental rule of share market is that always invest in stocks which you can understand or I can say that before investing in a company, you should know what type of business the company is in. Now the question arise WHICH STOCK or SHARE SHOULD I BUY? Most of the investors never think this before investing in share market.

I suggest always invest in that company which influence on share market. I mean to say that invest only in big companies. Because investing in such companies will always reduce risk of losing money

  1. Timing of Investment in Share Market

From my point of view this is also basic fundamental rule of share market. Most of the investor loss money not because they invest in right share but in wrong time. Many of the investors buy share when they already trade at their 52 week high price. I think this is biggest mistake by small investor. For example from below mentioned screen shot of Vedanta Limited, you can easily see that this particular share already trade at his 52 week high price and also give around 90% return in last 365 days and around 11 % of return in last 30 days.

(Data taken from on dated 08.09.2017)

I suggest that this share is already at its peak and give maximum return in last 1 year. So investor will invest by seeing its 1 year return without consider others factors properly and as a result loose his hard earned money. I am not saying this is not a good share or good company (Here I am not try to promote or demote any individual share of company). I am just trying to say that always try to invest in that company which is currently traded at its 52 week low or around that so that there will be high potential for making huge profit.

  1. Create portfolio rather invest in single stock

Most of the investors invest only in one particular stock and waiting for earn profit only from that stock which is not a good investment decision. Investing through making portfolio is like you keep your money in different locations rather keep it in single location.

I suggest always try to keep at least 5 companies of different sectors in your portfolio with equal investment. This will brings down the risk of losing money. Because if one company share not perform well then other company share will compensate with their profit and keep your investment in healthy position.

  1. Don’t panic or easily react on current market

Most of the investors get easily panic or react on current market situation and sell out their shares without thinking in proper manner. In share market nobody can make profit overnight. You have to wait and show patience. The investor who put in money systematically, in the right shares and held on to their investments patiently have been seen generating good returns. Hence, it is prudent to have patience and follow a good investment approach.

  1. Monitor regularly

Good investment is not about buying at right time or holding for long period but also exiting when the tide turns against the company. Monitor your share regularly and keep the track of its performance regularly. Exit time is also very important but many investors due to hunger of profit never think in this manner. For example in case of Vedanta Limited, which already at its 52 week high and which already gives 90% of return in last one week. Now if investor still keep their money in this stock and wait for more profit then I only say this is bad investment approach.

I suggest always try to lookout good profit but never keep your investment just because hunger of profit.


So with the help of above mentioned points anybody can make good profit from share market. These are just basic fundamental points which every investor should follow in systematic manner. I again say that share market is very good potential market for investment besides you keep in mind above mentioned points.

If you still have any confusion or want some more clarification on this you can easily connect with me at or at my facebook page @manishabhatia.rupayabazaar

Things to consider before availing personal loan


In today’s world, Personal Loans are very easy to avail. You can easily avail personal loan when you require urgent money for emergencies. It can help you take gain over your financial needs. In these days, it’s very usual to find email per day or receive marketing call about personal loan.

Like Home Loan which is usually secured loans, Personal loans are unsecured in nature that means banks and institutions have higher risk on these types of loans that’s why they offer personal loan at quite higher rate of interest as compare with some other type of loans i.e home or car loan.

Due to its unsecured nature, Personal Loan which can come in very handy easily during the time of emergencies or most requirement of cash. With the help of these you can easily met or fulfill your financial requirements. But due to higher competition among different banks / institutions, usually you receive a call or marketing email pertaining that the offer or interest rates are specially customized for you. I seriously advise that don’t fall in trap in such lucrative proposals from banks.

However, here are few points which every borrower must ask or think before avail for Personal Loan:-

  1. Fixed Interest Rate or Floating Interest Rate

As the name defined itself, Fixed Interest Rates do not change during the period of loan whereas Floating Interest Rates are likely to change depending upon the lending rates of banks and current market situation. Usually Fixed Interest are offered at lower interest rate as compare with Floating Interest Rate. But it doesn’t mean that you are going to pay less. And Floating Interest Rates vary from time to time. It may go down and reduce your number of EMI’s and vice versa. So, as a borrower you must think this point very clearly and take decision as per your financial need and risk taking ability.

  1. Other Costs associated with Personal Loan

While taken personal loan, Interest rates are not only the factor. There are other costs also which are usually associated with personal loan.

Processing Fee – Usually banks charges 1-2 % of the loan sanction amount as processing fee. Some banks charges lower processing fee and some may charge higher depending upon loan amount and duration. We advise, lower processing fee is always better option.

Prepayment Fee – Usually you take loan for met your financial requirement for short period. In between this period you may have more inflow of cash and try to prepayment of loan and want to save interest rates. But usually banks charges prepayment fee for keep the borrower in entire loan period and pay full interest. We advise, always consider lower prepayment fee.

Late Payment Fee – Banks levy penalty or late payment fee in case you are late on EMI payment. It may vary from bank to bank. Some charge less and some charge high. We never recommend you to consider loan with lower late payment fee. Because late payment will always put bad impact on your credit score/CIBIL score. We advise, always pay your EMI on time.

  1. Consider your need first and not Eligibility

Usually banks offer you more loan amount depending on your Eligibility. For example if you require only 1 Lac of rupees for met your urgent financial need. But banks executive may offer you pretty higher amount of loan depending upon your eligibility and pressurizes you to take such higher amount of loan as you are eligible for that. It may be 2 or 3 lac of rupee or even more instead of your actual requirement of money. Always remember that Personal Loans are unsecured loans and have higher interest rates. So why you pay interest for that amount which you actually don’t required. We advise always consider your need first and not your eligibility.

  1. Compare Interest Rates before Apply for Personal Loan

Most of the borrower get easily trap in lucrative offers on personal loan by different banks and never go in process for checking the interest rates offer by other banks. So usually it seems that after taking loan borrower may found some better option with other banks. So we advise always compare loan interest rates and other charges between different banks before apply. Borrower can also compare here INTEREST RATES ON PERSONAL LOAN.

  1. Must avoid any other Lucrative Add-on offer by Bank

Most of the time banks may offer some add-on schemes along with Personal Loan like insurance or credit cards. You always hear for bank that you not pay any upfront money for that and if there any insurance premium or fee for credit card it will directly added in your EMI. You have to say NO for such types of offers. Because nobody wants to pay interest on other Add-on offers. Yes, you read right, because any such premium of fee is directly added in your loan amount and you have to pay interest on these Add-on offers also. So we advise never take any add-on offer along with personal loan.

  1. Avoid Personal Loan for every situation

Last but not least always avoid personal loan unless you require it most. First always try to connect with your friends or family for any such type of loan. Because with the help of family and friends you get loan amount without any interest rate. And you have to pay only principle amount not interest. Usually people take personal loan from banks for their lavish lifestyle without considering the actual need of loan. People can take personal loans for their foreign holidays or for latest gadgets. We never recommend this and always say that People should avoid personal loan until they require at most.

  1. Conclusion

At last we only recommend that avoid personal loan until you require urgent need of cash for met your financial needs. Always consider above mentioned points and also read terms and condition before apply for personal loan. Never believe on any such marketing calls or emails regarding lucrative offers of personal loan. Think and apply your mind on all these offers and also compare interest rates among different banks before apply.

If you still have any confusion or require some additional information you simply write to us at

How to make money from stock market

There are loads of money to be made in stock market. But not everyone knows how to make money in stock market in India. In the past, people have lost fortunes in the stock market. There are only handful of examples about whom we can say that they have made stock market dance to their tunes.

The performance in stocks market is very unpredictable, and this confuses majority of people. On one day one can make money in stock market, and the other day all can be lost. If you will ask me how to make money in stock market, I will say there is no set rule. This becomes specially true if we speculate in stock market.

Added to this is the fact that stock market volatility in the last few years has left investors in a state of confusion. They are in a dilemma whether to invest, hold or sell in such a scenario.

To make money from stock market it is important to know basic stock evaluation techniques. Stocks needs to be evaluated in term of its fundamental strengths and also in terms of its price valuations. In the world of internet, the information that is available about stock evaluation is huge. But here we will pick and choose the most valuable information’s that investors can use for selecting a good stocks for investing. Before booking any stock, investors must ensure that is not overvalued. All across the world majority people loose money in stock market because they purchased stocks which are overvalued.

The first step – Check stocks price short-term trend. 
This can be done in variety of ways. The easiest is by looking at market price of stock. Open the price chart and see how the stock price has changed in last 6 months. Just note from where to where the price has appreciated to depreciated.

After looking at price chart we shall check the stocks simple moving averages. Note the current stocks price and its simple moving average for last 50 days.Suppose stocks current price is Rs 1735 and its SMA50 is Rs 1452, it means that stock is in rising trend.

The second step – Check how strong in the companies fundamentals
A fundamentally strong stocks exhibit variety of features based on which we can rate them as quality stock. So common features are companies liquidity of funds, profitability of company and debt levels of company. A fundamentally strong companies often shares its profit with its shareholders in form of dividends. Companies which has been paying consistent dividends to its shareholders in last 7-10 years is a sign of great fundamental. Dividend yield in the range of 2% to 3% can be treated as excellent.

The strategies used by mutual fund companies to buy or sell stocks are more intelligent than we can do it our-self. So stocks which mutual fund companies buying or selling gives a great hint about fundamental strengths of a company. If mutual fund companies are buying heavily at a certain price levels then we can safely decide to buy at that price level.

The third step – Check valuation of stocks price
We can start with checking how stock price has behaved in the last 2-3 years. Suppose in year 2007 the stock price was Rs 35 and in three years time it has climbed to Rs 50 it means the company has a growing tendency. But it is also important to check if stock price has touched overvalued levels? One can know this in variety of ways.

We can start by comparing stock price with its book value. If Price to Book Value ratio is less than 1.5, we can say that stock has not touched overvalued levels. If the book value of a stock is Rs 100 and its market price is Rs 160, it means its P/B ratio is 1.6. This is a hint that stock price has touched overvalued levels.

10 Golden Rules of Investing in Share Market

1. Avoid the herd mentality

The typical buyer's decision is usually heavily influenced by the actions of his acquaintances, neighbours or relatives. Thus, if everybody around is investing in a particular stock, the tendency for potential investors is to do the same. But this strategy is bound to backfire in the long run.

No need to say that you should always avoid having the herd mentality if you don't want to lose your hard-earned money in stock markets. The world's greatest investor Warren Buffett was surely not wrong when he said, "Be fearful when others are greedy, and be greedy when others are fearful!"

2. Take informed decision

Proper research should always be undertaken before investing in stocks. But that is rarely done. Investors generally go by the name of a company or the industry they belong to. This is, however, not the right way of putting one's money into the stock market.

3. Invest in business you understand

Never invest in a stock. Invest in a business instead. And invest in a business you understand. In other words, before investing in a company, you should know what business the company is in.

4. Don't try to time the market

One thing that even Warren Buffett doesn't do is to try to time the stock market, although he does have a very strong view on the price levels appropriate to individual shares. A majority of investors, however, do just the opposite, something that financial planners have always been warning them to avoid, and thus lose their hard-earned money in the process.

"So, you should never try to time the market. In fact, nobody has ever done this successfully and consistently over multiple business or stock market cycles. Catching the tops and bottoms is a myth. It is so till today and will remain so in the future. In fact, in doing so, more people have lost far more money than people who have made money," says Anil Chopra, group CEO and director, Bajaj Capital.

5. Follow a disciplined investment approach

Historically it has been witnessed that even great bull runs have shown bouts of panic moments. The volatility witnessed in the markets has inevitably made investors lose money despite the great bull runs.

However, the investors who put in money systematically, in the right shares and held on to their investments patiently have been seen generating outstanding returns. Hence, it is prudent to have patience and follow a disciplined investment approach besides keeping a long-term broad picture in mind.

6. Do not let emotions cloud your judgement

Many investors have been losing money in stock markets due to their inability to control emotions, particularly fear and greed. In a bull market, the lure of quick wealth is difficult to resist. Greed augments when investors hear stories of fabulous returns being made in the stock market in a short period of time. "This leads them to speculate, buy shares of unknown companies or create heavy positions in the futures segment without really understanding the risks involved," says Kapur.

Instead of creating wealth, these investors thus burn their fingers very badly the moment the sentiment in the market reverses. In a bear market, on the other hand, investors panic and sell their shares at rock-bottom prices. Thus, fear and greed are the worst emotions to feel when investing, and it is better not to be guided by them.

7. Create a broad portfolio

Diversification of portfolio across asset classes and instruments is the key factor to earn optimum returns on investments with minimum risk. Level of diversification depends on each investor's risk taking capacity.

8. Have realistic expectations

There's nothing wrong with hoping for the 'best' from your investments, but you could be heading for trouble if your financial goals are based on unrealistic assumptions. For instance, lots of stocks have generated more than 50 per cent returns during the great bull run of recent years.

However, it doesn't mean that you should always expect the same kind of return from the stock markets. Therefore, when Warren Buffett says that earning more than 12 per cent in stock is pure dumb luck and you laugh at it, you're surely inviting trouble for yourself.

9. Invest only your surplus funds

If you want to take risk in a volatile market like this, then see whether you have surplus funds which you can afford to lose. It is not necessary that you will lose money in the present scenario. You investments can give you huge gains too in the months to come.

But no one can be hundred percent sure. That is why you will have to take risk. No need to say that invest only if you are flush with surplus funds.

10. Monitor rigorously

We are living in a global village. Any important event happening in any part of the world has an impact on our financial markets. Hence we need to constantly monitor our portfolio and keep affecting the desired changes in it.

If you can't review your portfolio due to time constraint or lack of knowledge, then you should take the help of a good financial planner or someone who is capable of doing that. "If you can't even do that, then stock investing is not for you. Better put your money in safe or less-risky instruments," advises Kapur.

Best Investment Options for small investor


There are lots of small investment schemes available in India that helps tax savings too. Many of them provides you guaranteed returns, high interest rates, tax savings under various sections of Indian Income Tax Act and much more benefits.

These small investment not only provide growth to your money but also provide you with financial security at various stages of your life. It depends on your needs what product suits you best. You must go through the scheme documents before starting any investment scheme. Each financial plan has its own advantages and shortfalls, only a good research will save your hard earn money.



Initial points before starting a small investment

  • When you need returns?
    i.e. you need money in short term or long term
  • How much risk you can take?
    i.e. you prefer safe investments or some risky (e.g. bonds or equity)
  • What will be your investment pattern?
    i.e. you want to invest a big amount one time, or small portion regularly
  • How much do you know about the product?
    i.e. are you aware of good and bads of a scheme in which you are investing

Investment Options of Middle Class – Worth for investment?

Fix Deposit –
• Making fixed deposit investment means riding the bicycle (fixed deposit) although you have a motor car (stock market).
• Fixed deposit investment means placing peacock feathers between the pages of the book in the hope that they would magically yield another feather soon.
• Fixed deposit investment will give you almost same amount back due to inflation and taxes. Perhaps that is why it is named as fixed deposit.
• Of course, you stand to get a decent return if your fixed deposit is worked out at compounded rate of interest. But do you think you can become wealthy by the fixed return of the fixed deposit?
• Whatever money we give to banker they lend same money to other people by loan and earn higher return so by making fixed deposit you are doing social service also

Post Office Schemes –
• Post office schemes are basically launched to run the post office. If you are making an investment in post office scheme. Congrats along with investment you are doing social service of paying a salary of thousand of post office employees.
• If you love to invite trouble like standing in the long queue at a post office, getting unreasonable and unfriendly customer support you can invest in post office schemes.

Provident Fund –
• Provident fund scheme is the best example of collective living. The beauty of this scheme is you contribute X amount from your salary and your employer contribute Y amount. The government collects this amount and does a good amount of social services, like paying salary to PF employees who are unemployable otherwise.
• For withdrawing PF money, you will be shown a number of rules. You required written permission from your employer to withdraw PF amount and…blah..blah. The government is strict in this matter for a practical purpose they don’t want you to waste this money.
• You will get money from PF at retirement age, but that money will not be enough to live retirement life happily.

Insurance Plans –
• If you are dreaming of earning a high return through insurance policy forget it. Insurance plans are plans where you agree to pay fixed amount monthly/quarterly/half-yearly and wait till maturity. At the maturity, you curse Insurance agent for making false promises.
• A true Insurance policy is term plan which provides risk coverage. So once you are covered fully with term plan you should not purchase the insurance plan for investment.
As you can see, the popular investment options available to the middle class people don’t allow you to get rich. In the event, stock markets continue to offer the best hope. To be sure, you may not become rich overnight on the bourses. But by the notch of your patience and perseverance, stock markets can help you realize the ultimate middle-class dream, that of seeing a few billionaires become middle-class overnight.
So forget all these play it safe in life investment option and stay invested in stock market

Apart from above, There are various options where you can invest money in India and get good returns. These options include Savings accounts, Fixed Deposits, Debt Funds & FMPs. Further, let’s see how each of these options work for you to get good returns.

Savings Account is the Best Basic Option

If liquidity is your prime concern then this will be the initial option you should go for. Today the interest rates are free from regulation & there is an increase in the interest income to Rs 10,000 which is exempted from tax. Hence, it is a good idea to invest in a savings account. Also, banks calculate interest on your money into the savings account on a daily basis. This is a plus point to investors.
However, only a few banks offer high interest rates like 5% to 6% and above this limit. The rate of return on funds that contain small amounts is just 3% to 4%. Hence, you should also consider other options also and then decide. Now let’s see the next option that will through more light on where to invest in India for good returns at a different level.

If Security is your Concern, Go for Fixed Deposits

Fixed deposits in banks are measured to be safe & are investments which are highly liquid as compared to others. Today, a one to two year fixed deposit (FD) can fetch you around 8% to 9% yearly interest. This would sound much rewarding for basic investors. However, here comes the role of tax. You must be aware that the interest you get is added to your income & tax will be charged on the whole.
Let’s consider an individual in the highest tax slab. Interest of around 9% will fetch him around 6% to 7% post tax. This means that actually he will get a benefit of 2% to 3%. However, for investors who fall in lower tax slabs, they can benefit from good returns.
The money that you invest in a fixed deposit will get locked in at high rates as decided at the time you invest. Also this will not affect your returns if in case the interest rate goes down in future. This is the biggest beneficial factor of investing in a fixed deposit.

Try the Sweep-in/Sweep-out

Banks offer a sweep-in/sweep-out option. Let’s see what does this has to offer. Funds which are listed in savings account can exceed above certain threshold limit. If you invest in such facilities then the amount which exceeds the threshold limit will be invested automatically in fixed deposits. This will give you higher returns. Also, it does not affect on your liquidity of your savings account.
Hence, one can remove funds at any period of time. However, the underline investment is in a Fixed Deposit. Therefore, one is liable to consider all the taxation factors & then analyze the real benefits.

Ultra Short Term Debt Funds is another Good Option

These kinds of funds invest in securities which have short term maturities. In the past one year, they have generated around 8.5% to 9.5% returns. The biggest plus point in Ultra Short term funds is their tax implication factors. Ultra Short Term Debt Funds are liable to a Dividend Distribution tax of 12.5% for each individual investor (effective rate can be up to 13.52%). The short-term capital gains tax for growth units will be according to your income-tax slab in which you fall. However, the long-term capital gains tax is around 20% with indexation. A high interest rate factor & efficient taxation factor enables it as a good investment option.
However, one should not expect similar performance when interest rates decrease. Also verify on the credit quality of the portfolios before you select any fund.

Fixed Maturity Plans (FMPs) if you’re Looking for Fixed Returns

Fixed Maturity Plans are debt mutual fund schemes. These types of plans can fetch you nearly fixed returns. Also the fluctuations in interest rates will not affect your returns. FMPs are available with different maturity plans & scores on efficient taxation factors unlike fixed deposits.
However, they are not highly liquid as is the case with fixed deposits. Your invested money can only be withdrawn through stock exchange. In stock exchange, these instruments are not traded on a high basis. Hence, you should be clear of your requirement while you invest in this instrument.
In the current interest rate scenario, FMPs do offer high post tax yield to investors. Also like fixed deposits, you can lock-in your investment at higher returns for a certain period of time.

Short Term Debt Mutual Funds for Higher Risk Appetite

These types of schemes will invest your money in debt securities with maturity period of a year or two. Fluctuations in interest rates have an impact on Short Term Debt Funds. However, in the current phase, these funds have delivered 8% to 9% to returns to the investors. You also can benefit from a lower dividend distribution tax (13.52%) & efficient long term capital gains taxation (20% with indexation).
All these factors make this one a good choice for investors with a higher risk appetite. There are categories of floating rate funds which investors can opt for. This is for those who don’t want to take risk of interest rate fluctuations.
All the above options have their own risk & return characteristics. However, you need to identify what are your requirements. You should consider factors like time horizon, liquidity & taxation factors & then decide which option to go for. So the above options will help to know where to invest in India for good returns.
Share market investment is also a good option for investing in the Indian market. You can check this info on how to make investment in share market in India.

How to choose best Insurance Plan


If you decide you really need life insurance, then your next step is to learn about the different types of life insurance, and to make sure you're buying the right type of policy.

Do You Really Need Life Insurance?

Life insurance needs vary depending on your personal situation — the people who depend on you.

If you have no dependents, you probably don't need life insurance. If you don't generate a significant percentage of your family's income, you may or may not need life insurance.

If your salary is important to supporting your family, paying the mortgage or other recurring bills, or to sending your kids to college, you should consider life insurance as a way to ensure these financial obligations are covered in the event of your death

How Much Life Insurance Do You Need?

It's difficult to apply a rule-of-thumb because the amount of life insurance you need depends on factors such as your other sources of income, how many dependents you have, your debts, and your lifestyle.

However, there's a general guideline you may find useful: consider obtaining a policy that would be worth between five and 10 times your annual salary in the event of your death.

Beyond that guideline, you may want to consider consulting a financial planning professional to determine how much coverage to obtain.

Is there any single product which we can say the best product and will be suitable to all buyers (not investors)? No…because each buyer’s need is different, hence we can’t say that a single product from any of XYZ insurance company will be best. Having said that, the next question is, why you need life insurance in your life? As the name itself suggest the meaning, we must buy the life insurance ONLY to protect our life but not for investing. But sadly 99% of Indian buyers still feel that Life Insurance is investment and tax saving tool. This is the mindset created by agents since long and by our parents. Because in olden days we don’t have any options like mutual funds or bonds. Only options of investments are Post Office Schemes, Bank FDs or Life Insurance products.

Because there are so many options available, it’s easy to put off making a decision if you are overwhelmed with your choices or don’t properly understand them. The following 10 suggestions can help you make the right decision for you and your family.

  1. Get multiple insurance quotes that include all options or restrictions so you know exactly what is available.
  2. Stay away from any agent or organization that cannot or will not fully explain exactly what you are buying and why.
  3. Always remember that you are the client. At no point should you feel bullied or intimidated into buying something that you aren’t sure of.
  4. Though you certainly want to purchase adequate coverage, don’t over buy. If your premiums are too high to manage because of the extras that have somehow found their way into your policy, you will be much more apt to allow it to lapse.
  5. Once you find a company or agent that you are comfortable with, ask questions. The clearer you are on what type of life insurance rates and options are right for you, the easier it will be to agree on a package that suits your requirements.
  6. Consider life insurance for the whole family, not just the adults. Expenses that follow a death or serious illness or accident will add more stress to an already devastated family.
  7. Remember to regularly check your policy for changes that may affect you or your family. Almost all companies will send out notices to explain changes that they have made so make sure you review them.
  8. Review your policies relevance regularly and update as your family and their needs change.
  9. Consider your life insurance a fixed and non-negotiable expense in the same way you would your mortgage or car payment. It’s easy to consider life insurance as a luxury rather than a need, when in reality that is definitely not the case.
  10. Don’t be overwhelmed by “what if” or worst case scenarios.


Before proceeding further, let us first understand the different variants of products available in India.

Term Plan

If you want insurance plan only to give financial security to your family, the term plan would be best for you. These are cheapest plan. You can have 1 crore life cover by spending as low as 8 thousand per month. It is really very cheap. These plans also saves tax.

Traditional Endowment plans

If you want to invest some money along with the life cover, you can go to specially designed insurance plan. The endowment insurnace plans are such options. These plans also saves tax. Because of the insurance and investment combination, the premium of such plans are very high.

Traditional Endowment Policies give you death cover during the insurance period. After the maturity, you also get the maturity amount. This plans gives you a guaranteed amount after the maturity.

Money Back Plans

These plans gives some money during the policy period as well. Thus, It gives death cover, some amount during policy and maturity amount. Because of this triple benefit, the premium of such plans are highest. Ultimately, it is your money which is distributed.

Whole Life Plans

The plans runs throughout your life. The nominee of policyholder gets the maturity amount irrespective of the deceased person’s age. This extra insurance cover comes at a cost. You have to pay far higher premium than the term plan.


This plans are also a mix of insurance and investment. But it does not give a guaranteed amount at maturity. Rather, your money is invested in mutual fund schemes of your choice. The maturity amount of ULIP depends upon the performance of your schemes.


After you have decided on the right kind of insurance, do a comparative study of similar policies being offered by different companies.

-Ensure that your premium amount and premium frequency is within your ability to pay.

-Check with the insurance company on the additional benefits offered, such as an accident rider, a critical illness rider or maybe an option later to convert an existing term plan to a whole life plan.

-Read the fine print on the policy carefully and ask the company or your agent to explain anything that is not clear to you, before you sign the offer document.