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Debt-Snowball Method: Power of Compounding Interest Example

  Legendary investor, Warren Buffet has called the power of compounding– the eighth wonder of the world. Compounding is the process in which an asset’s earnings are reinvested to generate additional earnings over time. This return can be in the form of interest, dividend or capital gains. Compounding can be explained as interest on interest- the effect of which is to magnify returns to interest over time, this is also known as the “miracle of compounding”. This can very well be understood by the example of a snowball. Have you thought what happens when you push a small snowball down a hill? When you push it down a hill, it continuously picks up more snow. By the time it reaches the bottom of the hill it is a giant snow boulder. While falling downhill it gets bigger with every revolution. The same happens with money, if you invest INR 100 for 2 years at 10% compound interest p.a., at the end of 1st year you have INR 110. Now, for the second year, the whole INR 110 is reinvested. So you
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8 Best Reasons to Continue Your SIP

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  In these abysmal times of ongoing pandemic and unstable market dynamics, the markets have been highly affected due to the investor consternation and fall in demand. It is said that around 59 lakh SIPs have been stopped, however, it has been observed that at the time when many SIPs have been either stopped or paused there has been additional inflow made by some investors cushioning the SIPs inflow. We would like to suggest some reasons you should consider before deciding whether you should continue your  investment in SIP s or not. Lower Valuation One of the prime causes leading to the discontinuation of  SIPs  is the fall in the values of your investment. Before going more into this let’s briefly talk about the nature of the bearish phase that the country is going through at the moment. The important characteristic of the bearish phase is that it is temporary and after the end of such phase there is always a bullish market where the overall market is highly satisfying. This means tha
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Difference Between Regular Vs Direct Plans in Mutual Fund ?

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  Mutual fund is an investment fund where multiple investors pool their money to purchase securities. Such funds are managed by a highly trained professional commonly known as a fund manager or portfolio manager. Due to factors like benefit of diversification and comparatively stable returns, mutual funds have become one of the most looked after investment options.  When you opt for mutual funds you can invest through 2 schemes i.e. through regular or direct schemes. Let’s briefly talk about both the schemes.  Direct investment plan  is where an investor can directly invest into the company’s plans, generally through its website. Regular investment plan is where you buy the same securities through an advisor.  What is the Difference Between Regular and Direct Schemes?   In direct schemes the  expense ratio  is low as no brokerage is paid to any adviser resulting in comparatively high returns as compared to the indirect schemes.  However, the major problem with these schemes is the lack
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Top 3 Secrets to Profit From Stock Market Crash

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The whole world has been badly affected by the spread of the virus forcing companies to shut down, heavy unemployment and huge downfall in the economy. Almost all major most economic activities have impacted by the disease. The  markets have been heavily damaged by the Covid19 and the effects  are visible on the global economic growth. Today the whole world is struggling from the effects of the Covid19 on business and trade. For the past few weeks Indian Stock markets were seen crashing into a bearish phase where the stock prices fell more than 20% from the recent highs.  Although, the market has slightly started to rise gradually such sudden fall in stock valuations and other instabilities have triggered panic across the world and shaken the confidence of investors. The past Friday turned out to be in favor of the investors.   In bearish times most of the investors opt-out of the securities they were holding and are ready to sell their investments at a lower price. There is, generally
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Location: Delhi, India
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Investing In Liquid Funds : Let’s Compare Its Advantages And Disadvantages

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  Liquid funds are one of the many types of   mutual funds   available in the market. They invest in short‐term assets such as treasury bills, government securities, repos, certificates of deposit, or commercial paper. They are debt funds which enable companies to raise money for a Period of up to 91 days. These are highly secured and short term funds usually suitable for putting money aside for emergencies as there is almost zero risk involved with such securities.  Advantages of Liquid Funds Liquid funds are perfect for financial specialists who need to park their money for a short period of time.The aim of these liquid mutual funds is to provide higher returns while offering a similar level of security for the money invested.   Here are some of the advantages of  Liquid Funds  :- Low Risk:  Liquid funds invest only in highly secured government funds. So the associated risk is minimal. Along with this they are known to provide stable returns to its investors in the form of interest a
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How is the Indian Stock Market Reacting to the Coronavirus Impact?

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Impact of Covid 19 on the global markets In the past few weeks, the stock prices have fallen drastically and the market saw a downfall of nearly a third of the global market cap. The whole world has been badly affected by the spread of the virus forcing companies to shut down, heavy unemployment and huge downfall in the economy. Almost all major most economic activities have impacted by the disease. The markets have been heavily damaged by the Covid 19 and the effects are visible on the global economic growth. The global gross domestic product (GDP) growth projection for 2020 has halved by the Organization for Economic Co-operation and Development (OECD). Current Situation in Indian Markets Although, the market has slightly started to rise slowly such sudden fall in stock valuations and other instabilities have triggered panic across the world and shaken the confidence of investors. The past Friday turned out to be in favour of the investors. In the end, Sensex stood at
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What is Stock Exchange?

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Stock exchanges  are markets where the participants come together for  buying and selling of financial instruments  such as shares, debentures, bonds, etc. it is run by set rules and regulations set by appropriate bodies such as  SEBI in India .  Only the securities of listed companies are traded with  stock exchanges . All such  stock exchanges  shall be recognized by the government and only registered brokers and members are allowed to trade instruments on it.   There are around 9 official  Stock Exchanges  in India- Bombay Stock Exchange (BSE)   National Stock Exchange of India (NSE)   Calcutta Stock Exchange  India International Exchange (India INX)   Indian Commodity Exchange (ICEX)  Metropolitan Stock Exchange of India Ltd. (MSE)   Multi Commodity Exchange of India Ltd. (MCX)   National Commodity & Derivatives Exchange Ltd. (NCDEX)   NSE IFSC Ltd. (NSE International Exchange)
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