Essential Financial Planning Steps in your 40s

Essential Financial Planning Steps in your 40s
by Nutan Gupta 20/06/2017

The value of the wine increases with time and so is the situation in a man’s life. He spends his youth in achieving his dreams, failing; rising and learning from his innumerable experiences. In his middle-age at around 40 years of age he becomes wise, learning from each phase and every mistake in his life. 40 is no more about himself but collectively about him and his family. And now is the time when he should be seriously thinking about his and his family’s future.

Financial planning is often prolonged until all the responsibilities of the family are met. Education fees of children, buying a house, medical bills of parents… all this seem to be a far bigger priority than saving in the correct financial plan. Retirement seems to be still very far and expert opinion from financial managers will be sought when one is ready for saving.

Not having a financial plan in place is a bad decision. 40 is the age when you should get your priorities set and begin saving for your different needs. We help you with simple tips to plan out your financial future in a secured manner in the ripe age of 40.

Do not delay the saving period any longer than 40. Time is crucial and ensure that all the aspects of your life are finely secured in your plan.

Planning for Emergency

At 40, you seem to be fit and fine and while you will always be young at heart, you cannot ignore the need for planning for an emergency and that emergency could be anything. Your financial plan should include a liquid fund that will take care of all your emergency needs, if such a situation arises.

Clearing Your Debts

A car loan, house loan, foreign trip loan…everything seems to be an immediate requirement at the young age of 20. 20 is all about spending and living in the moment. However, 40 is all about channelizing your income into savings and investments. Therefore, you should on a priority basis make an effort to reduce all your debt.

Reduce Non-Committed Expenses

At 40, your ideal goal should be achieving an increase in your savings. Therefore planning a budget is optimum to reduce your unnecessary luxury expenses. Ensure all your expenses are for your basic necessities.

Education Expenses

Saving for your child’s education is the most important goal in your financial planning. You want to give the best education to your kids so that they are able to fulfill their future dreams. In order to achieve all this, you need to start your preparation now. Make the right investments to meet your child’s education goals.

Retirement Planning

At 40s you still have to achieve a lot on the professional front and create milestones in your career. But 40 is perhaps the earliest and best age to start contributing towards your bright retired future. The returns you achieve should be able to beat the inflation rate to meet your old-age needs. Ideally every individual should take an informed decision on his retirement.

Life Insurance Plan

Securing the future of your loved ones in your absence is the best safety you could ensure for them. Invest in life insurance to make sure your family remains independent even without you. Go for insurance plans such as health insurance, disability insurance, home insurance, auto insurance, to get the right and maximum coverage plan in case of any unfortunate event.

Concisely speaking, financial planning in 40 is as much about your family as it is about yourself. Get a good plan that is derived post all the consideration of your expenses, goals and risk profile.

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Difference between Cash and Future Market

Difference between Cash and Future Market
by Prasanth Menon 20/06/2017
Meaning A place where financial instruments are traded, wherein the delivery of stock takes place. Future market is a place where only future contracts are bought and sold at an agreed date in the future and at a predefined price.
Ownership When you buy shares and take delivery, you become shareholder of the company till you hold the shares. You can never be a shareholder when you trade in Futures.
Delivery It is done on T+2 days. No delivery takes place as the Future contract expires on expiration date.
Payment Full amount needs to be paid at the time of buying shares in cash. Only margin money requires to be paid for initiating Future contract.
Lot size One can buy even single share of company. One has to buy a minimum lot size which is already defined. Such as in case of NIFTY lot size is 75.
Holding period In cash market you can buy shares and hold for life. In futures, you have to settle the contract on the expiration date i.e. maximum of three month.
Dividends When you are shareholder of the company, you are entitled to receive dividend. In future contract you are not entitle for any dividend.
Objectives People buy shares in cash market for investment purpose Futures can be traded for Arbitrage, hedging or speculation purpose.


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5 Questions You Cannot Miss Asking Your Life Insurance Agent

5 Questions You Cannot Miss Asking Your Life Insurance Agent
by Nutan Gupta 20/06/2017

If there is something easy to tackle for everyone while planning their or their family’s financial future, it is the life insurance policies. Simple to understand, the policies come with various terms and conditions that are often misinterpreted or missed while buying a policy. Here’s a quick run through of 5 questions that you must ask your life insurance agent to avoid any loopholes in your financial planning to secure the future of your loved ones.

There is no harm in being upright honest and straightforward in addressing your concerns. Asking your agent anything under the ambit of your policy is your right. And before you begin bombarding him with questions on your financial future, we suggest you ask him the very basic question on his credentials.

What is your credibility in the market?

As embarrassing as this question sounds on the first go, it is extremely prudent of you to enquire about your agent’s credibility and credentials in the market to avoid any mishap in the long run. Agents are here to sell different policies, however you need to see whether your agent has the credentials to advise you on the right policy or plan. Question him on his suggestions meted out to you; enquire the factors that lead him to advise you on this specific policy or plan.

Policies are decided post a thorough examination of an individual’s income, expenses, financial goals, preferences and other crucial factors. The agent should be able to assess a larger scenario before suggesting a specific policy with a said premium.

Your questions should not end at his credentials, your premium and returns. You need to take into account the bigger picture and one of it is…

Will the Policy Chosen by Me Adjust Inflation on Account of My Death Benefit?

If you are happy to secure your family’s future with a life insurance policy of 10 lakh rupees, think again. The value of money keeps on decreasing in a robust economy and inflation is hitting the country at a steady rate. Despite the government’s measures, inflation is on a rise. Thus, before buying a life insurance policy, ask your agent if your policy will adjust inflation in the long run. Because if the policy won’t adjust inflation, it would wear down with time, even if you do not miss out on your premium payment.

Will My Policy Take Care of My Health Changes in the Future?

Health is never going to be permanent. While you will be buying your policy in your youth and definitely undergo a medical examination before it, there is no guarantee or constant assurance that your health may not deteriorate or remain the same in the future. Therefore, it is important to be aware of the terms and conditions of your policy and know whether you stand a chance of improving your rating in case your health improves and what happens if your health deteriorates.

Will the Amount Chosen by Me Suffice?

Insurance policies are the best financial security you can offer to your loved ones hence you need to be sure whether amount chose by you will suffice them in case you don’t survive them. The amount secured by you should be enough for their expenses and other regular needs.

What are the exclusions of the Policy?

While it is good to know the inclusions of clauses, you need to also be clearly informed on the exclusions as well to avoid any problems at the time of claiming the policy returns. You might require multiple covers to ensure your family’s safety completely.


Don’t hesitate to ask questions to your insurance agent. A good agent would answer all your questions and help you to understand the policy in an extremely easy manner. Decide on a policy by weighing all the pros and cons in specific to your needs. Do not go ahead with a policy that you do not feel conducive to your loved one’s safety in the future.

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5 Stocks Recommendation For Feb 25th, 2019 – Mar 1st , 2019

Stock recommendations
by Gautam Upadhaya 21/07/2017

1) Balkrishna Industries Ltd - Buy


Stock Balkrishna Industries Ltd
Recommendation The stock has witnessed a breakout from its sideways consolidation
backed by an uptick in volumes on the daily chart. It has also shown
positive momentum on the daily MACD-Histogram, an indication that
the uptrend will continue in the short term.
Buy/Sell Range Target Stop Loss
Buy (Cash) Rs850-855 Rs892 Rs827
NSE Code Market Cap (in Rs cr) 52-week high/low 200-Day EMA
BALKRISIND 16543 Rs1467/741 Rs987


2) REC Ltd - Buy


Stock REC Ltd
Recommendation The stock has witnessed a consolidation breakout backed by an uptick
in volumes on the weekly chart. Derivative data indicates fresh long
positions in the stock.
Buy/Sell Range Target Stop Loss
Buy (Cash) Rs131-133 Rs139 Rs127.8
NSE Code Market Cap (in Rs cr) 52-week high/low 200-Day EMA
RECLTD 26068 Rs148/89 Rs119


3) Mahindra & Mahindra Ltd - Buy


Stock Mahindra & Mahindra Ltd
Recommendation The stock has witnessed a rounding bottom formation and has managed
to close above its 10-DEMA, short-term resistance level on the daily charts.
It has also formed a bullish hammer candlestick on the weekly charts.
Buy/Sell Range Target Stop Loss
Buy (Cash) Rs641-647 Rs672 Rs625
NSE Code Market Cap (in Rs cr) 52-week high/low 200-Day EMA
M&M 80272 Rs992/615 Rs771


4) Raymond Ltd - Buy

Stock Raymond Ltd
Recommendation The stock has witnessed a breakout above its resistance levels backed by an uptick in volumes on the daily charts. It has also shown strong momentum on the daily MACD-Histogram.
Buy/Sell Range Target Stop Loss
Buy (Cash) Rs721-728 Rs755 Rs705
NSE Code Market Cap (in Rs cr) 52-week high/low 200-Day EMA
RAYMOND 4478 Rs1151/593 Rs806


5) HDFC Bank Ltd - Sell


Stock HDFC Bank Ltd
Recommendation The stock has formed a bearish engulfing candlestick pattern backed by an uptick in volumes on the daily chart. Derivative data indicates fresh short positions in the stock.
Buy/Sell Range Target Stop Loss
Sell (March Futures) Rs2105-2120 Rs2030 Rs2164
NSE Code Market Cap (in Rs cr) 52-week high/low 200-Day EMA
HDFCBANK 569029 Rs2219/1830 Rs2041


Research Disclaimer

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Short Put Options Trading Strategy

Short Put Options Trading Strategy
by Nilesh Jain 02/08/2017

What is short put option strategy?

A short put is the opposite of buy put option. With this option trading strategy, you are obliged to buy the underlying security at a fixed price in the future. This option trading strategy has a low profit potential if the stock trades above the strike price and exposed to high risk if stock goes down. It is also helpful when you expect implied volatility to fall, that will decrease the price of the option you sold.

When to initiate a short put?

A short put is best used when you expect the underlying asset to rise moderately. It would still benefit if the underlying asset remains at the same level, because the time decay factor will always be in your favour as the time value of put will reduce over a period of time as you reach near to expiry. This is a good option trading strategy to use because it gives you upfront credit, which will help to somewhat offset the margin.

Strategy Short Put Option
Market Outlook Bullish or Neutral
Breakeven at expiry Strike price - Premium received
Risk Unlimited
Reward Limited to premium received
Margin required Yes

Let’s try to understand with an Example:

Current Nifty Price 8300
Strike price 8200
Premium received (per share) 80
BEP (strike Price - Premium paid) 8120
Lot size 75

Suppose Nifty is trading at Rs. 8300. A put option contract with a strike price of 8200 is trading at Rs. 80. If you expect that the price of Nifty will surge in the coming weeks, so you will sell 8200 strike and receive upfront profit of Rs. 6,000 (75*80). This transaction will result in net credit because you will receive the money in your broking account for writing the put option. This will be the maximum amount that you will gain if the option expires worthless. If the market moves against you, then you should have a stop loss based on your risk appetite to avoid unlimited loss.

So, as expected, if Nifty Increases to 8400 or higher by expiration, the options will be out of the money at expiration and therefore expire worthless. You will not have any further liability and amount of Rs. 6000 (75*80) will be your maximum profit. If Nifty goes against your expectation and falls to 7800 then the loss would be amount to Rs. 24000 (75*320). Following is the payoff schedule assuming different scenarios of expiry. For the ease of understanding, we did not take into account commission charges and Margin.

Short Put Options Trading Strategy

Analysis of Short Put Option Trading Strategy

A short put options trading strategy can help in generating regular income in a rising or sideways market but it does carry significant risk and it is not suitable for beginner traders. It’s also not a good strategy to use if you expect underlying assets to rise quickly in a short period of time; instead one should try long call trade strategy.


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by Nutan Gupta 05/08/2017

Issue Opens - May 8, 2017

Issue Closes - May 11, 2017

Price Band - Rs. 56-60

Face Value - Rs. 10

Issue Type - 100% book building

% Shareholding


Post IPO







Source: DRHP

HUDCO is a wholly-owned government entity with more than 4 decades of experience in providing loans for housing and urban infrastructure in India. It has an outstanding loan portfolio of Rs.36,386 cr (as on 9MFY17), which can be divided into– Housing Finance (30.86%) and Urban Infrastructure Finance (69.14%).

The offer consists of Offer for sale (OFS) of up to 204.1 mn equity shares for disinvestment by the government and employee reservation is up to 3.9 mn shares. There is a discount of Rs. 2 per share for eligible employees and retail investors.

Key Investment Rationale

HUDCO currently focuses on the low income group or the economically weaker sections for housing finance and social housing. The company’s housing finance loan book has grown at a CAGR of 21.9% over FY14-16. This segment has better NIMs and lower gross NPAs @ 3.08% (8.46% for urban infrastructure). There is an increasing demand for housing loans from Tier II/III cities. Deployment of funds towards housing loans by banks and HFCs has increased over the years.

The HUDCO Board decided to stop sanctioning new Housing Finance loans to private sector entities in FY14 in order to reduce NPAs from the private sector. As on December 31, 2016, its gross NPAs for loans made to the private sector (excluding loans given to individuals) were 5.98% compared to 0.75% for loans to state governments. Furthermore, the management decided to stop sanctions of new Urban Infrastructure Finance loans to the private sector. Since 2014, state governments and their agencies represent 99.94% of the total sanctions. As a result, net NPAs have decreased from 2.52% in FY14 to 1.51% in 9MFY17.

The issue is attractively priced at 1.4x9MFY17 P/Adj.BV (upper band price).

Risks Involved

HUDCO’s loan growth may be restricted by a slowdown in real estate and increasing competitive intensity. Also, the company faces general business risks of providing organized finance to LIG and EWS and competitive pricing of HFCs as compared to banks.