5 Tips on How to Make Money and Create Wealth By Aditi Kothari
We are all different people, with different requirements and income levels. But, most of us have one goal in common and that is to make money and create wealth, i.e., log anek par goal ek. Many people would have told you that it is very easy to make money online or to create wealth while there might be others who would have told you that wealth creation is a very difficult task.
Well, both these people are partially correct and partially wrong. It is indeed not easy to make money online and create wealth. However, if you follow just a few basic investment tenets and continue your investing journey in a disciplined manner, then you will be well on your way to making money and creating wealth.
Aditi Kothari, Vice Chairperson & Head of Sales, Marketing and e-Business at DSP Investment Managers Pvt Ltd. She also serves as a member of the Executive Committee. Aditi is passionate about educating and guiding investors in the right way and has set up several initiatives that aim to ensure that the full benefits of investing can accrue to all members of the population, especially to the female members of the society.
1. What are the top 5 things which can help young investors on their wealth creation journey?
The most important aspects to keep in mind, as you start your investment journey, include:
a) If you really want to make money, then you must start your investing journey as early as possible. Always remember that the market does not move in a straight line and nor will your investment portfolio. You can take more risks if you start early and accumulate money to enjoy your life in the later stages. Starting early will offer you exponential returns over your investment period by helping you enjoy the fruits of compounding.
You can use the rule of 72 to understand how your money will grow. The rule of 72 basically says that if you divide 72 by your expected rate of return, you will know in how much time period your money is expected to double. For example, assume your expected rate of return on an investment is 7%. Now, when you apply the rule of 72, i.e., divide 72 by 7, you arrive at 10 as the answer. This means that it will approximately take you 10 years to double your money, if it was invested at 7% per annum.
b) If you are a beginner, don’t invest your money all at once. Invest in small proportions and automate your investments via Systematic Investment Plans (SIPs). You can also try top-up SIPs to ensure that your savings increase in proportion to your earnings. Start small and build your wealth over time. You can even start with as little as 500 rupees, but it is better to make the investment amount a portion of what you earn. Follow the 50:30:20 rule, where 50% of your salary goes into your routine expenses, 30% is spent on entertainment, and 20% is allocated for disciplined savings. Continue this investment through market ups and downs and remember that market downs are the best time for investments.
c) Before you invest, create your risk profile and invest accordingly. Know your risk-taking ability based on your age, number of dependents, and whether you are earning well and regularly. If you are older, and living off your pension, your risk ability is lower. Also assess your risk tolerance, which can help you understand your comfort level with the inherent risks in the market. If you are in the market for the long run, you don’t have to worry about intermittent fluctuations.
Also, take your financial goals into account to complete the equation. Approach a good financial planner to make better and less emotional assessments. If you have longer term goals, you can undertake riskier propositions and vice versa. Balance these three aspects to take proper financial decisions and avoid tips from friends and well-wishers as they are not in a position to assess your unique requirements.
d) Asset allocation is very important. Do not put all your eggs in one basket. You must balance debt and equity, according to your risk profile, tolerance, and goals. If you are more conservative, allot more of your corpus to fixed income and if you have high risk tolerance and a long-term investment horizon, then park more in equity.
e) Learn the right way to invest. Do your homework, talk to investment managers and remember to create an emergency corpus which is invested in liquid funds.
2. How can investors benefit from rupee cost averaging and why is it all the more helpful when it comes to SIPs?
When you start an SIP, you invest a fixed amount of money at regular time intervals. The fixed amount of money will be invested in the market irrespective of whether the markets are moving up or down. Rupee cost averaging ensures that you can buy more units when the markets are down, offsetting the fewer units you are buying when markets are high. Rupee cost averaging helps you overcome the volatility of markets. No one can really time the market and rupee cost averaging can help you average out the cost of investment over a period of time.
SIPs are the best ways to benefit from this equation as it helps you overcome fear and human biases. Investment decisions are all about emotions and you should be able to control your emotions when the market goes down. Do not be scared. Automated SIPs are emotionless decisions that can help you make money and create wealth over the longer term.
3. What are some aspects to be kept in mind while deciding on optimal asset allocation?
The following aspects are of utmost importance when it comes to asset allocation:
i) Risk profiling is the best and only way to allocate responsibly.
ii) Understand your circumstances and accordingly diversify your portfolio
iii) Park your corpus across asset classes which do not react to volatility in similar ways
iv) Create a unique asset allocation plan, instead of following your friends or people you know as each of us have different risk profiles and financial goals
4. How important is financial education and research when we begin the investment journey?
Whether you want to make money through direct stock investing or mutual fund investments, do your own homework. Do not depend on outside information only as it does not factor in your unique requirements and personality traits. Always do your homework and be financially empowered by understanding where you are investing and why.
5. What are the key takeaways from the interview?
i) Start early.
ii) Follow the rule of 72 for understanding how fast your money will double.
iii) Automate your investments through SIPs.
iv) Remember to undergo risk profiling and understand your risk tolerance and financial goals.
v) Do not forget asset allocation.
vi) Take charge, approach a financial advisor if you are not confident, and never stop your SIPs.
BTST Trading Tips for Today: 4th October, 2021
5paisa analysts bring the best intraday ideas, short-term ideas and long-term ideas for you. In the morning we provide best momentum stocks to buy today, while in the last trading hour we provide Buy Today Sell Tomorrow (BTST) and Sell Today Buy Tomorrow (STBT) ideas.
BTST Trading Ideas for Today
1. BTST : DEEPAKNTR OCT FUT
- Current Market Price: Rs.2,550
- Stop Loss: Rs.2,525
- Target 1: Rs.2,582
- Target 2: Rs.2,610
2. BTST : BALAMINES
- Current Market Price: Rs.4,620
- Stop Loss: Rs.4,580
- Target 1: Rs.4,685
- Target 2: Rs.4,770
3. BTST : BEL OCT FUT
- Current Market Price: Rs.206
- Stop Loss: Rs.204
- Target 1: Rs.210
4. BTST : IRCTC OCT FUT
- Current Market Price: Rs.3,943
- Stop Loss: Rs.3,900
- Target 1: Rs.3,978
- Target 2: Rs.4,036
5. BTST : JKLAKSHMI
- Current Market Price: Rs.643
- Stop Loss: Rs.638
- Target 1: Rs.656
Chart Busters: Top trading set-ups to watch out for on Monday.
The broader market has outperformed benchmark indices on Friday. Here are the top trading set-ups to watch out for Monday.
Surya Roshni: After registering the high of Rs 840, the stock has witnessed minor correction, which resulted in the formation of a bullish pennant pattern. The correction is halted near the 38.2% Fibonacci retracement level of its prior upward move. On Friday, the stock has given a breakout of bullish pennant pattern on the daily chart. This breakout was confirmed by the above 50-day average volume. Additionally, the stock has formed a sizeable bullish candle on breakout day, which adds strength to the breakout. The bullish pennant pole height is almost 330 points. All the moving averages based on trade set-ups are showing a bullish strength in the stock. Daryl Guppy’s multiple moving averages is suggesting a bullish strength in the stock. The stock is trading above all the 12 short and long term moving averages. The averages are all trending up, and they are in a sequence. Interestingly, the leading indicator, 14-period daily RSI has given bullish crossover in bullish territory.
Technically, all the factors are currently aligned in support of the bulls. Hence, we would advise the traders to be with a bullish bias.
Going ahead, on the upside, the prior all-time high may act as crucial resistance for the stock. Any sustainable move above this resistance would result in a sharp upside. On the downside, the 13-day EMA is likely to act as strong support, which is currently placed at Rs 738.20 level.
Titagarh Wagons: On Friday, the stock has given ascending triangle pattern breakout on the daily chart. This breakout was supported by a robust volume of nearly four times of 50-days average volume. The 50-days average volume was 17.79 lakh while today the stock has registered a total volume of 69.28 lakh. Generally, the volume criteria become significant when the stock is breaking out of the consolidation, and the stock that witnesses breakout on the back of over and above 50-days average volume, confirms the validity of the breakout. Currently, the stock is trading above its short and long-term moving averages. These averages are in a rising trajectory.
Talking about the indicators, the 14-period RSI on the daily time frame has marked a fresh 14-period high and also, the RSI is trading above its previous swing high. The weekly RSI is in the super bullish zone. Further, the daily MACD stays bullish as it is trading above its zero line and signal line. Hence, we expect the bias to remain positive as long as stock sustains above Fridays low of Rs 96 level. On the upside, the level of Rs 114 may act as crucial resistance as per the measure rule of ascending triangle pattern.
Opening Bell: Here’s what you need to know before the market opens on October 04, 2021.
Will markets sustain these early gains or traders will utilize this pullback to offload their positions?
The SGX Nifty indicates that domestic markets may open with modest gains as it trades with gains of 3.5 points at 17,533.50. What’s important is will markets sustain these early gains or will traders utilize this pullback to offload their positions. As per the sentiments prevailing among the Asian peers, we believe the latter might be seen on Monday. On the downside, the level of 17,440-17,450 is an important support level. Hence, keep a close watch on this level.
Cues from Asian markets: Asian stock markets are in a sea of red on Monday as Japan’s Nikkei 225 and Hong Kong’s Hang Seng is down by over 1%.
Overnight cues from US markets: After a highly volatile session in the early part of the trading session, US stocks turned buoyant as bargain buying was seen on Wall Street as a result US markets ended Friday’s session firmly in positive terrain. The Dow lead from the front as it jumped nearly 1.43% and it reclaimed its important psychological mark of 34,000. Despite this strong rebound from the lower levels, the Dow is still trading below its 50 and 100-DMA. The S&P 500 advanced 1.15% to ended above the 4,350 mark. Meanwhile, the tech-heavy Nasdaq rose nearly 0.82% to 14,566.70.
Last session summary: On Friday, the same old story continued on D-Street as the Nifty extended losses for the fourth straight day as it dropped nearly 0.5%, while Sensex lost 0.61%. However, the broader markets outperformed the frontline benchmark indices as Nifty Midcap and Smallcap added 0.04 and 0.13%, respectively. Overall, market breadth was slightly positive.
Among the sectoral indices, Nifty Pharma and Media were top gainers, on the flipside, Nifty Realty lost more than 1.5%. India VIX witnessed a significant drop of over 6% as a result it slipped below the 18-mark.
FII’s and DII’s activity on Friday: FIIs were net buyers to the tune of Rs 131.39 crore on Friday. On other hand, DIIs were net sellers to the tune of Rs 613.08 crore.
Important Corporate events to watch out: Man Infraconstruction to consider dividend and bonus. Ganesh Benzoplast, the meeting of Board of Directors of the company will be held on Monday to consider and approve the job work agreement and other terms for conducting the chemical business between the parent company- Ganesh Benzoplast and its 100% subsidiary GBL Chemical without transferring any immovable property owned by the company as approved by the member in the AGM.
Adar Poonawalla-backed Wellness Forever files for IPO. Find out more
Wellness Forever Medicare Ltd, a pharmacy retail company backed by Adar Poonawalla-led vaccine maker Serum Institute of India (SII) Pvt. Ltd, has filed its draft red herring prospectus for an initial public offering (IPO).
The IPO comprises a fresh issue of shares to raise Rs 400 crore and an offer for sale of 1.6 crore shares, as per the DRHP filed with the Securities and Exchange Board of India. The total IPO size could be around Rs 1,500-1,600 crore.
The Mumbai-headquartered omnichannel retail pharmacy chain follows Hyderabad-based pharmacy chain MedPlus, which submitted its IPO papers in August.
Wellness Forever’s founders Ashraf Biran, Gulshan Bakhtiani, and Mohit Chavan are among those selling shares of the company in the IPO. Biran and Bakhtiani are offering 7.20 lakh shares each while Chavan is offering 1.20 lakh shares. Other shareholders will sell the remaining 1.44 crore shares.
Poonawalla’s SII, the world’s biggest vaccine maker, plans to sell 35.5 lakh shares in the IPO. It owns 66.98 lakh shares, or a 13.2% stake, in the company. Rising Sun Holdings Pvt. Ltd, another company owned by Poonawalla, will sell 15.22 lakh shares. Rising Sun holds 36.4 lakh shares, or a 7.17% stake, in the company.
Wellness Forever has raised around $21 million till date in three funding rounds from investors including Serum Institute, Adar Poonawalla, Singapore Angel Network, Amit Patni and Rajiv Dadlani.
As per the DRHP, the company plans to use Rs 100 crore to repay its loans and Rs 70.20 crore to fund capital expenditure for setting up new outlets. In addition, it will use Rs 121.90 crore to meet working capital requirements.
IIFL Securities, Ambit Pvt Ltd, DAM Capital Advisors and HDFC Bank are managing the IPO.
Wellness Forever’s business and financials
The Mumbai-based company was founded in 2008. It is the third-largest chain of pharmacy and wellness stores that sell 91,500 pharmaceutical and wellness products.
It opened its first drugstore in 2008, and has expanded its retail footprint to a total of 236 stores in 23 cities across Maharashtra, Karnataka and Goa. It serves a registered customer base of 6.7 million users as of June 30, 2021.
Citing Technopak, it said that Wellness Forever generated the highest revenue per retail square foot in the Indian pharmaceutical retail industry for 2019-20 and 2020-21.
The brand aims to strengthen its presence in tier-2 and tier-3 cities, particularly in the pharmacy e-commerce segment, a sector that is projected to grow at an annualised pace of 45%.
The company has been increasing the share of non-pharmaceutical and premium wellness products, which offer gross margins higher than 30%, in its total revenue. The share of non-pharmaceutical products rose from around 37% in 2018-19 to almost 46% in 2020-21 while the share of premium wellness products increased from 10.47% to 16.32%. Its total revenue for 2020-21 was Rs 924.02 crore, up from Rs 863.25 crore in the previous fiscal year.
An Investment of Rs 1 lakh in this multibagger scrip would have fetched you more than Rs 15 lakh in just six months.
We often come across companies that have delivered stellar returns in a short period. Stocks that give returns that are several times their costs are called Multibaggers. These are essentially stocks that are undervalued and have strong fundamentals, thus presenting themselves as great investment options. Multibagger stock companies are strong on corporate governance and have businesses that are scalable within a short time.
Let us have a look at the multibagger stock which has delivered 15X returns in just six months.
Amid Indian indices soaring to their record highs, a handful of shares have entered into the list of multibagger stocks in 2021, Kwality Pharmaceuticals Limited is one of them. This pharma stock has beaten the S&P BSE Healthcare index by a huge margin. In Year to Date (YTD) terms, the BSE Healthcare index has risen around 22% while this pharma stock has delivered a stellar 1,500% return in the same period. In the last 6 months alone, this multibagger stock has shot up 1,527%.
Kwality Pharmaceuticals Ltd (formerly Kwality Pharmaceuticals Pvt Ltd) is a pharmaceutical formation company. It is engaged in manufacturing finished pharmaceutical formulations in the dosage form. The company manufactures and exports pharmaceutical formulations in liquid orals, powder for oral suspension, tablets, capsules, sterile powder for injections, small volume injectables, ointments, external preparations in various categories like beta-lactam and non-beta-lactam, hormones, cytotoxic (oncology) and effervescent as per new GMP norms. The company was founded in 1983 and is based in Amritsar, Punjab with an additional office in Kangra.
This multibagger pharma stock has given a robust 89.89% return in the last one month alone while in the last 6 months, it has given a stellar 1,527 % return to its shareholders after rising from Rs 54 per stock level to Rs 879 apiece currently. In Year to Date (YTD) terms, this pharma stock has given the same kind of returns.
Impact on one's investment
Taking a cue from Kwality Pharmaceuticals share price history, if an investor had invested Rs 1 lakh in this pharma stock one month ago, today its Rs 1 lakh would have become Rs 1.89 lakh. Similarly, if an investor had invested Rs 1 lakh in this multibagger stock 6 months ago and had remained invested in the counter throughout this period, its Rs 1 lakh would have become near Rs 15.25 lakh as the stock has risen 1,527% during this period.