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5 Investing Lessons to Learn This Dussehra

Nutan Gupta

27 Mar 2018

Dussehra signifies the victory of good over evil. The ‘vadh’ or end of all that is bad and the beginning of new things is celebrated on this auspicious festival. A lot of people decorate their homes, invite relatives and friends to celebrate this joy among them. Here are 5 investing lessons one should learn from this festival.

Have a financial plan ready before attacking Lanka

After Sita's abduction by Ravana, Lord Ram didn’t act on impulse. The legend speaks of Lord Ram taking time out to plan his strategy. He had it all in mind as to where and how they would proceed to Lanka and rescue Sita. You need to do something similar when dealing with money. Earning returns on your investment is not an easy task unless you plan it well. Ensure that you have it all written down or at least have a mental framework. Take into consideration all the costs and risk while making this plan as well.

Diversify your VanarSena

Defeating Ravana wouldn’t have been possible if not for Hanuman and his vanarsena. However, it is important that you spread them out effectively so that more can be done and if calamity strikes, all is not lost. Same goes with your assets. Your assets can be your vanarsena in investment. Ensure you spread out in different funds and plans so that the impact of market fluctuations would be relatively less than when kept concentrated in one fund.

Use self-discipline to confront Rakshas

When confronted by Rakshas or demons on the way, Lord Ram didn’t let fright or panic take over. He was calm. With wisdom and self-discipline, he conquered all the obstacles on the way to rescue Sita. Similar is expected with money as well. The market can have a lot of fluctuations and present obstacles in the path to good returns. But, you need to rely on self-discipline and self-control to not act under impulse and give it time to settle down. Assess the situation with a calm mind and then decide your next step to tackle it.

Aim to kill Ravana and not just injure him

Ravana was sure about his decision of not releasing Sita even though he knew destruction was imminent. Even after constant warnings, his ego kept him from seeing who he was up against. He constantly undermined the capabilities of Lord Ram and his vanarsena. He even tried to inflict harm on them through various techniques and demons. However, Lord Ram’s vision was clear. He knew that Ravana wasn’t one who would realize his mistakes after being injured and thus, had to make a decision to kill him. So it is with money, having a goal in mind will increase the chances of achieving it. It would also help you to take tough decisions of closing the investment in a particular fund when it no longer meets your goals or needs.

Prepare of new beginnings after returning for vanvas

After defeating Ravana and rescuing Sita, Lord Ram returned to Ayodhya to start a new chapter of his life. He was the rightful heir to the throne and after 14 years, he was now ready to take it and lead the people. You need to do the same with your finances. Your money comes back with returns at the maturity of its term, it is now on you to make a new beginning. You choose to use it or reinvest it will determine your future so use it wisely.

Dussehra is indeed a time of celebration where you can celebrate the victory of the good. Using these investment tips, let your money win against all the odds of the market and may you earn good profits this festive season. Wishing everyone a very happy Dussehra.

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Why to Choose Mutual Funds Instead of Directly Investing Into Equities?

Whether to invest in equities or mutual funds is a question that has plagued every investor. As someone who needs the best value for his/her investment should you invest in equity directly or via mutual funds?

Let’s start by first understanding what these two terms ‘equities’ and ‘mutual funds’ stand for-

Equities- Equities generally represent ownership of a company. If you own any equity in a company, you are a part owner of the said company (depending on how much equity you own).

Mutual Funds – It is an investment scheme which is professionally managed by an asset management company. It pools together the resources of a group of people and invests their money in equities, debentures, bonds and other securities.

Why choose mutual funds over equities?

For people who’ve never invested in either stocks or mutual funds, it is hard to know which is better and where to start. Broadly speaking, if you are a novice investor, mutual funds are not only less risky but also way easier to manage. Here are some ways in which investing in mutual funds is beneficial as opposed to investing in equities -

Diversification

Mutual funds provide more diversification as compared to an individual equity stock. When you invest in equity, you are investing in a single company which has its inherent risk. For example, if you invest Rs.20,000 in buying equities of one company, you could face a total loss if that particular company performs poorly in the market.  

If you invest the same amount in mutual funds, it will be invested in different kinds of stocks and financial instruments, high-risk and low-risk both, so you might not face total loss even if one company does poorly.

Scale of Investment and Lower Costs

For an individual investor buying and selling stocks is a difficult task due to its high price. Thus, any gains made from stock appreciation are nullified if the overall trading costs are considered. Comparatively with mutual funds, as the money is pooled from a large number of investors, the cost per individual is lowered.  

Another advantage of mutual funds is that you don’t need to invest large sums of money. Buying equities for a profitable venture needs huge amounts of money, a minimum of few lakhs. With mutual funds, you can start with Rs.1000 and earn profits on that as well.

Convenience

Keeping an eye on the markets everyday is a time-consuming business, especially if you are investing as a side gig. There are people who spend their lives studying the market and still end up sustaining heavy losses. Though investing in mutual funds does not guarantee high returns, it is stress-free and needs less work as compared to investing in equities.

To sum it up

It is important to remember that mutual funds have their own disadvantages as well. Thus, as with any financial decision, educating yourself and understanding the suitability of all the available options is the ideal way to invest. 

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5 Investing Lessons to Learn This Dussehra

Nutan Gupta

27 Mar 2018

Dussehra signifies the victory of good over evil. The ‘vadh’ or end of all that is bad and the beginning of new things is celebrated on this auspicious festival. A lot of people decorate their homes, invite relatives and friends to celebrate this joy among them. Here are 5 investing lessons one should learn from this festival.

Have a financial plan ready before attacking Lanka

After Sita's abduction by Ravana, Lord Ram didn’t act on impulse. The legend speaks of Lord Ram taking time out to plan his strategy. He had it all in mind as to where and how they would proceed to Lanka and rescue Sita. You need to do something similar when dealing with money. Earning returns on your investment is not an easy task unless you plan it well. Ensure that you have it all written down or at least have a mental framework. Take into consideration all the costs and risk while making this plan as well.

Diversify your VanarSena

Defeating Ravana wouldn’t have been possible if not for Hanuman and his vanarsena. However, it is important that you spread them out effectively so that more can be done and if calamity strikes, all is not lost. Same goes with your assets. Your assets can be your vanarsena in investment. Ensure you spread out in different funds and plans so that the impact of market fluctuations would be relatively less than when kept concentrated in one fund.

Use self-discipline to confront Rakshas

When confronted by Rakshas or demons on the way, Lord Ram didn’t let fright or panic take over. He was calm. With wisdom and self-discipline, he conquered all the obstacles on the way to rescue Sita. Similar is expected with money as well. The market can have a lot of fluctuations and present obstacles in the path to good returns. But, you need to rely on self-discipline and self-control to not act under impulse and give it time to settle down. Assess the situation with a calm mind and then decide your next step to tackle it.

Aim to kill Ravana and not just injure him

Ravana was sure about his decision of not releasing Sita even though he knew destruction was imminent. Even after constant warnings, his ego kept him from seeing who he was up against. He constantly undermined the capabilities of Lord Ram and his vanarsena. He even tried to inflict harm on them through various techniques and demons. However, Lord Ram’s vision was clear. He knew that Ravana wasn’t one who would realize his mistakes after being injured and thus, had to make a decision to kill him. So it is with money, having a goal in mind will increase the chances of achieving it. It would also help you to take tough decisions of closing the investment in a particular fund when it no longer meets your goals or needs.

Prepare of new beginnings after returning for vanvas

After defeating Ravana and rescuing Sita, Lord Ram returned to Ayodhya to start a new chapter of his life. He was the rightful heir to the throne and after 14 years, he was now ready to take it and lead the people. You need to do the same with your finances. Your money comes back with returns at the maturity of its term, it is now on you to make a new beginning. You choose to use it or reinvest it will determine your future so use it wisely.

Dussehra is indeed a time of celebration where you can celebrate the victory of the good. Using these investment tips, let your money win against all the odds of the market and may you earn good profits this festive season. Wishing everyone a very happy Dussehra.