How Can You Gift Your Spouse a Vacation?
Gita - Hi Sita! Just saw your holiday pics on social media. Phuket must have been wonderful.
Sita- Thanks, Gita. It was really fun. The beaches were pristine, the viewpoints breathtaking, the city-life electric and the islands were pure paradise.
Gita- You’re making me feel jealous already. How did Rahul manage to talk you into it, with your busy schedules and equated monthly instalment (EMIs) on top?
Sita- Well, it was my idea. I reckoned he deserved a vacation on his birthday.
Gita- But didn’t that burn a crater-sized hole in your pocket?
Sita- No, it didn’t. I planned ahead and was able to save enough over the last year to make the trip happen.
Gita- Really! It must be quite complex and risky. Did you invest in the stock market?
Sita- Not at all. It’s quite simple actually. I invested in several low-risk assets, and was able to rack up a decent profit in a short time.
Gita- That’s wonderful! Could you tell me more about it?
Sita- For a start, I invested in Fixed Deposits. FD schemes are available from several banks for a period of 6 months to a year. The interest rate is around 8% and it helps to save on tax as well.
Gita- That’s great. But several of my friends are investing in mutual funds. Did you go for them as well?
Sita- In fact I did. I went for a special type of mutual fund called Liquid fund. It gives returns of around 10% and is a very safe place to park your funds for a short time. Unlike SIP’s, which need 2-3 years, Liquid funds can be easily converted to cash in a year’s time.
I also invested in Fixed Maturity Plans (FMP). They have a maturity period of 1 year. They offer good returns of 9.5% at least!
Gita- Wow!! You really did some smart moves there, but isn’t there something more conventional I can do to plan my holiday. Kaushik and I don’t really know much about all these fancy financial fixes.
Sita- Well you can always go for a Holiday Savings Account with any bank. The banks tie up with major travel agencies and provide a sort of EMI scheme for Tour Packages.
Your entire package amount is divided into 13 segments for a year. You pay 12 of them in the form of Recurring Deposits and the travel agency pays the 13th one for you. This helps us to save money and gives a nice little discount by the side.
I went for a bank-travel agency tie-up scheme when I decided on Phuket a year ago. It helps us plan our trip and save for it as well. This way all my other investments became add-ons to my original fund. Extra cash at hand meant we could do more!!
Gita- Well that’s good to hear. I guess more conventional people would consider that a safe investment and a one-stop solution. I only wish I could put my birthday money to good use. Wouldn’t it be good if we can get our trip “Crowdfunded” just like they’re doing with the web series’?
Sita- Well there’s a way for that as well. There are several travel sites that give innovative offers for creating a travel fund. Instead of cash and other presents, you can get people to fund parts of your trip. It costs Rs1000/- for a guided tour of Phuket, and ?5000/- for a full relaxing spa massage.
Gita- That’s really cool!! Who knew you could plan a trip in so many ways? But all the savings apart, how did you manage to keep on track? Wasn’t it hard to resist the urge to splurge?
Sita- That’s a no-brainer. Of course, it’s hard not to pick up those stiletto heels or that branded handbag. But, that vacation was worth a thousand times more than any of those odds and ends. Can you list out all the clothes and shoes you’ve bought since college? But I bet you’d still remember that trip to the hill station.
What’re you waiting for? Plan now and let’s go to Paris next summer!
5 Intraday Trading Tips For Today
Intraday calls are the buy/sell recommendations generated on the basis of technical and derivative data points wherein the positions have to be entered and exited on the same trading day. Intraday calls will be generated in cash and F&O segments and will have a validity of one day i.e. between (9:15am - 3:30pm). The calls should be executed when the underlying price is quoting within the mentioned range.
Following is the list of 5 intraday trading ideas for today-
The stock has witnessed a breakout above its resistance levels and has shown strong momentum on the daily MACD Histogram.
Buy Rs 624-628
The stock has witnessed a breakout from its sideways consolidation and has also witnessed a bullish crossover on the daily MACD Histogram
United Spirits Limited
Buy Rs 538-542
The stock is on the verge of witnessing a double bottom breakout on the daily chart and has seen a smart uptick in volumes which affirms our bullish view on the stock.
Buy Rs 2262-2272
The stock has witnessed a flag pattern breakout on the daily chart.
Zee Entertainment Enterprises Limited
Sell Feb Futures Rs 461-464
The stock has faced selling pressure near its 200 DEMA. Derivative data indicates fresh short positions.
8 big mistakes to avoid in a falling stock market
Everyone prefers to invest in a bullish stock market. However, investing in a bearish market is seen as a challenge for investors.
Stock markets have been facing a lot of volatility these days, hence, investors should keep a check of what they do and don’t. Panic leads to hasty moves, as a result paying a hefty price. However, if one is cautious of the commonly made mistakes (listed below), it may help in reducing losses to a great extent.
1). Don’t fixate on a price: Investors tend to anchor on a price, at which they bought the stock. They should carefully analyze the reasons for the falling stock and plan their next move accordingly. They must realize that the price at which the stock is bought is not necessarily perceived as its fair value by the market.
2). Say ‘No’ to buying more to average: Even though this concept has its own benefits, keep reminding yourself that this works only if the fundamentals of the stock are strong. The method of averaging is one of the trusted techniques in stock trading.
3). Be well researched regarding the market updates: Do not ignore any significant development happening in the market based on over confidence. Be well informed and take decisions according to the market trends. Your judgement without information may not always be correct.
4). Don’t be a value picker: Buying stocks at their 52-week low may seem a good bargain, but it might turn out to be a value trap. Markets can be unreasonable for longer periods of time than one can think of.
5). Do not make leveraged bets: Leverage requires that the investment should earn a return, which is at least equivalent to the interest paid on the borrowed capital (if you have borrowed). However, in case of market dips, it can accrue huge losses too.
There’s a high degree of uncertainty involved in the stock market, which can drive the trends either ways – it can bring panic if one is risking the money that they cannot afford to lose. Alternatively, it can force one to close their positions by limiting their options, if they are buying on margin.
6). Don’t alter your financial plans: It is a human tendency to panic and react frantically in the state of stress. Don’t change your investment decisions and existing portfolios based on the current market trends. Keep a clear sight of your asset allocation.
7). Do not stop your Systematic Investment Plans: One should not stop their SIPs during a bear market. The primary purpose of SIP is to encourage buying more units at lower prices and reaping benefits when the market rebounds. Stopping SIPs at that point interrupts the compounding benefit of equities and affect the long term goals.
8). Do not over diversify your portfolio – One should not over diversify his portfolio that too in multiple companies of the same sector. Though this might help one to limit their downside to an extent, but won’t be of much help in the long run. Diversification beyond a point leads to greater risks, and it becomes difficult to monitor the stocks.
The ‘right’ way to exit a losing trade
Every trader has his share of bad trades in his portfolio and you do not need all your stocks to be multi-baggers to be successful in the share market. While gains from a stock have no upper limit, the loss from a stock is limited to the value invested in it. Exiting a losing stock is not only a financial loss for a trader, but also an emotional or psychological loss. It is human tendency not to accept losses readily. We have a few recommendations that will help you exit a declining trade.
Let’s take a look
Use stops to restrict your financial losses
Stops are calculated, pre-determined price levels at which the investor chooses to go short or sell his stocks to limit losses. When the stock price hits the stop loss price, a sell order is executed and the stock is automatically sold at that price. Stop loss orders work well as they define the losses beforehand and the loss amount is in the control of the investor. Have a personalized stop loss strategy and use it effectively to limit your losses while investing in stocks.
Keep a check on the stock even after exiting to find a re-entry point
Once you exit a position, keep an eye on it to identify any bullish indication of reversal, which can be a potential re-entry point. Using stops, you might sometimes exit your position because of price volatility. In no time, you may find the prices rising again. However, using proper stops is proven to be effective as it limits your losses in most cases. Analyze the charts, study the candlestick patterns, and re-enter, only, if it coincides with your research and not in hope or revenge. If there is no valid reason to re-enter the trade after the initial exit, walk away and search for new opportunities.
Do not emotionally connect with your stock picks
You should accept your wrong picks and move on rather than lingering onto the stock in the hope of a rebound. You need to monitor and notice the developments around your shares continuously, and if stocks are taking the wrong direction, you will sometimes need to book losses and accept your wrong stock picks. Don’t fall in love with your shares, sell them if the fundamentals do not appear correct and restrict your losses. Booking losses or hedging them at an early stage can help minimize losses.
Accept responsibility and analyze your mistakes and find out where your investment plan can be improved
This will help reduce the chances of the same happening again. Handling trading losses well is a leading characteristic of successful investors. Treat a failure as an opportunity to learn and improve it in your next move. Many opportunities are waiting out there in the market for you to find and grab hold of.
5 Stocks for next week 8th Jan-12th Jan 2018
AJANTA PHARMA - BUY
|Recommendation||The stock has managed to give a breakout from its sideways consolidation on the daily chart. The stock has also shown good strength on the daily and weekly MACD Histogram.|
|NSE Code||Market Cap(Rs in Cr)||52-week High /low||200 Day M.A|
JUST DIAL - BUY
|Recommendation||The stock has given a flag pattern breakout and has also breached the declining trend line backed by a surge in volumes on the daily chart. The stock has taken support along the 10-day EMA on the weekly chart.|
|NSE Code||Market Cap(Rs in Cr)||52-week High / low||200 Day M.A|
NIIT TECH - Buy
|Recommendation||The stock has given a breakout from its sideways consolidation on the daily chart backed by a surge in volumes; the stock has also taken support along the rising trend line on the daily chart.|
|NSE Code||Market Cap(Rs in Cr)||52-week High /low||200 M.A|
INDUSIND BANK - BUY
|Recommendation||The stock has managed to give a breakout above the declining trend line on the daily chart and has managed to give a breakout from its sideways consolidation on the weekly chart. The stock has also witnessed bullish crossover on the daily MACD indicator which affirms our positive view on the stock.|
|NSE Code||Market Cap(Rs in Cr)||52-week High / low||200 M.A|
INDIAN OIL CORPORATION - SELL
|Stock||INDAIN OIL CORPORATION|
|Recommendation||The stock is in a lower top lower bottom chart structure on the daily chart and has given a close below its support levels. The weakness shown on the MACD histogram accentuates our negative view on the stock.|
|NSE Code||Market Cap(Rs in Cr)||52-week High /low||200 M.A|
Top 5 ELSS for 2018
Equity Linked Savings Scheme (ELSS) is a type of equity mutual fund in which investments up to Rs1.5 lakh per financial year are tax deductible under section 80C. In other words, investors don’t have to pay tax on investment up to Rs.1.5 lakh in ELSS. By investing in ELSS, an investor in the 30% tax bracket can save Rs.46,350 as tax.
Below table exhibits the amount of tax one can save by investing Rs.1.5 lakh in ELSS for different tax slabs.
*Includes 3% cess also
Besides tax benefits, ELSS investments also offer other benefits discussed below.
- Wealth creation with tax-saving – Historically, it has been seen that ELSS schemes have given significantly higher returns than other tax saving schemes like PPF, 5-year FD, EPF, etc.
- Shortest lock-in period – ELSS has a lock-in period of 3 years, which is the shortest among all tax-saving instruments.
- Tax free capital gains: The long-term capital gains from investment are tax-free.
- Dividends are tax-free: Dividends received are tax-free in the hands of the investor right from the year of investment.
- Low investment amount: Investors can start investing with Rs500 in lump sum or via SIP in ELSS. Since it is difficult to invest a lump sum amount in one go, SIP helps a person to invest small amounts at regular intervals. SIP payment is auto-debited from your bank account every month.
ELSS is the best way to save tax and create wealth in the long term. Below are the top 5 recommended ELSS funds.
|Scheme Name||Fund Manager||Corpus (cr)||1 Y (%)||3 Y (%)||5 Y (%)|
|Aditya Birla SL Tax Relief '96(G)||Ajay Garg||Rs.4,349||41.6||16.3||21.6|
|Axis LT Equity Fund(G)||Jinesh Gopani||Rs.15,408||35.7||12.2||22.4|
|DSPBR Tax Saver Fund-Reg(G)||Rohit Singhania||Rs.3,571||34.4||15.6||20.1|
|IDFC Tax Advt(ELSS) Fund-Reg(G)||Daylynn Pinto||Rs.798||52.2||17.4||21.6|
|Reliance Tax Saver (ELSS) Fund(G)||Ashwani Kumar||Rs.10,157||44.2||13.3||22.4|
1 year returns are absolute; 3 year and 5 year returns are CAGR.
AUM as of November 2017, Returns are as on January 02, 2018
Aditya Birla SL Tax Relief ‘96 Fund
- Aditya Birla SL Tax Relief ‘96 Fund does tactical allocation between large cap and mid-= cap stocks to ensure optimal risk reward.
- As of November 2017, the fund has invested ~37% of its AUM in large cap stocks, ~55% in mid cap stocks and ~7% in small cap stocks to generate higher returns.
Axis Long Term Equity Fund
- Axis Long Term Equity mutual fund invests in companies with sustainable profit growth to generate wealth over 3-4 years.
- Besides, the fund manager follows bottom-up approach to select the companies.
- As of November 2017, the fund has invested ~66% of its AUM in large cap stocks while ~30% in mid cap stocks to generate alpha.
DSPBR Tax Saver Fund
- DSPBR Tax Saver Fund primarily invests in large cap stocks with some tactical allocation to midcap and small cap stocks to generate higher returns.
- The fund manager follows buy-and-hold strategy for majority of the portfolio. He also takes active and tactical calls to exploit the market opportunities.
- As of November 2017, the fund has invested ~71% of its AUM in large cap stocks and ~22% in mid cap stocks to generate higher returns.
IDFC Tax Advantage (ELSS) Fund
- IDFC Tax Advantage (ELSS) Fund does tactical allocation between large cap, mid cap and small cap stocks to generate higher returns.
- As of November 2017, the fund has invested ~46% of its AUM in large cap stocks, 29% in mid cap stocks and 20% in small cap stocks in order to generate higher returns.
Reliance Tax Saver (ELSS) Fund
- Reliance Tax Saver (ELSS) Fund does tactical allocation between large cap, mid cap and small cap stocks to generate high returns.
- The fund invests in potential leaders with high growth prospects.
- Generally, the fund takes 2-3 sector call at a time and invests in high conviction mid cap stocks.
- As of November 2017, the fund has invested ~60% of its AUM in large cap stocks, 25% in mid cap stocks and 15% in small cap stocks in order to generate higher returns.