Portfolio Update Dec 2016

BIG changes done to the portfolio considering the recent events and macro headwinds lined up. Please check the updated portfolio for details.

I am sure many of you will have questions after this portfolio change and I will be happy to answer them. You can post your query in the comment section of this post.

http://www.investorzclub.com/2013/03/amit-agarwals-model-portfolio.html

The Great Humiliator

My Favorite page from the book " Beat the Crowd" by Ken Fisher.

Important Motor Insurance terminologies worth knowing

If you are looking to buy / renew a car or bike insurance then you have either already encountered some jargon, or will encounter as you read the policy documents, which is difficult to understand. Following is the list of common terms that you must understand in order to fully benefit from the insurance policy:

1. NCB or No Claim Bonus: This is probably the easy term and quite straight forward. While purchasing a four wheeler or two wheeler insurance, this is the discount offered by the insurer for prudent use of your vehicle. This discount is available on policy renewals and can be as high as 50% depending upon the number of years your vehicle didn’t claim for damage.

Portfolio Update - Nov 2016

Utilized sharp correction in stocks to add quality stocks at very good valuation which are expected to generate reasonable return in 6 months time. Please check the updated portfolio for further details.

The Seven Deadly Sins Novice Online Traders Commit

There are two important facts about online trading; there are those in it to make money and those who walk back home with discouraging losses. This doesn’t mean there are spread betters who are destined to lose, the problem lies in the strategies they employ. Which in many times are misguided decisions because they fail to see the following blind spots:

1) No Tangible Trading Plan

Because the name of the game is spread betting, many traders go at it without a solid plan to follow. It’s like comparing the trade to playing online slots where you just pull a lever and the wheels of fortune automatically turn for you. Without a real trading plan, you cannot clearly define the losses from the profitable ventures. You are also bound to over trade or under capitalized in the hope that one of your moves will pay off. In the event of so many losses incurred, you end up liquidating the good trades then go home with the bad ones.

Portfolio Update - Oct 2016

Significant changes made in the portfolio. Exited 1 stock while added 3 new names. Cash @ around 25% of the portfolio. 

10 Little Books For Investors

Collection of Little books series in my library. I am a huge fan of Little Books as they are quick to finish & refer and delivers great value for its price. Personal favorite is the "The Little Book that still beats the Market" by Joel Greenblatt. 

Value Investing from Sanjoy Bhattacharya

Key Principles of value Investing by Sanjoy Bhattacharya of Fortuna Capital.

Portfolio Update Sep 2016

Sharp fall in Telecom stocks presented the opportunity to allocate some cash of the portfolio. Please check the updated portfolio for details

Portfolio Update - 31st Aug 2016

Quick Portfolio adjustment. Increased cash level again for the lack of investing opportunity. Please check the updated portfolio for details.

New Age Banking to Make Branches Redundant

Gone are the days when having a branch presence was a great competitive advantage for an established bank over a new bank. Technology is transforming the way people bank. With increasing adoption of internet and our country moving gradually towards cashless economy, each desktop or a mobile with internet connection becomes a mini branch wherein you can do virtually any internet banking transaction anytime, anywhere and from any device.

Model Equity Portfolio Update - August 2016

Portfolio update and a quick commentary on the performance so far. Also a brief about the market outlook and strategy going forward.

Passion, Interest and Hobbies of World Billionaires

With combined wealth of over $7500 billion ($7.5 trillion) world billionaires (approx 2500) are all passionate about Entrepreneurship and almost half of them have interest in Philanthropy. Here is the list of hobbies billionaires mostly have:

File Your ITR Online To Claim Tax Refunds

You can file your return of income for claiming refund of taxes even if your income does not exceed the exemption limit due to TDS. Your employer, Banks & financial institutions deduct TDS sometimes more than your tax liability which you can easily claim by filing your Income tax return. This return for claiming the refund of excess taxes paid can be filed within a period of two years from the end of the financial year for which the claim of refund is related.

Filing of tax return these days have become very easy and in many cases even free through several e-filing portals such as H&R Block which also provides assistance in case you are stuck somewhere. All you need to do is to check your tax liability using an Income tax calculator and if you have paid more than what you are liable to pay then file your return online to claim the refund of excess tax paid. 

Retire early with Immediate Annuities

We all get tired working in this hectic professional world today and dream of retiring early with steady cash flow to take care of our daily expenses for life. While this may not seem possible but is also not entirely impossible. If you have saved reasonable amount of corpus and has passed all the major expense points of your life like children’s education, marriage etc then by creating annuities on your corpus can help you in retiring early.

Annuities, mentioned above, are nothing but a pension plan with steady cash flow during your retirement years so that you don’t have to depend upon others for your expenses. Immediate annuities are basically opposite of a typical life insurance policy. Instead of paying regular premiums to an insurer that makes a lump-sum payment upon your death, with an annuity you give the insurer a lump sum of cash in return for regular income payments until you die. Immediate annuities start paying out right away.

Current Tax Structure in India

Post GST most indirect taxes would be replaced by Central Goods and Services Tax and State Goods and Services Tax.

Dangers of watching every tick

One of the biggest mistake you can ever do as a trader or investor. Watching every tick make you right or wrong every other moment and is highly fatal for your eyes, health and financial well being. 

Why Life insurance and which is the best term insurance plan in India?

Being responsible also means ensuring that your loved ones or financial dependents are safeguarded in case an unfortunate event of death or disability occurs to you. That protection to your family can be provided through life insurance.

Most youngsters won't buy life insurance because they procrastinate this decision of buying insurance. They would spend on gadgets, outings, fashion, etc. which may be a good choice or may be appealing but financial planning for the future is also important. When realization strikes most of them would already be 45 or older and hence may have to pay more because life insurance is directly linked to age or may have  a hard time getting his/her policy issued due to medical issues.

Look beyond interest rates before switching your home loan

With so many comparison sites around, it is no longer difficult to find out who is offering the cheapest mortgage rates. If you are already servicing a home loan from a Bank or an NBFC, you might find that you are not getting the lowest home loan interest rates offered in the market and it becomes quite tempting to switch the loan and take advantage of low rates offered by others and thereby reduce your EMI or tenure. 

But switching your home loan just because somebody else is offering lower interest rate is not a wise decision and can lead to lot of harassment and can even turn costly. Following are the 3 things you must consider before deciding to switch you mortgage provider.

Portfolio Update - July 2016

Utilizing the magnificent rally in our markets, some stocks were sold to increase cash levels. Please check the updated portfolio for further details.

http://www.investorzclub.com/2013/03/amit-agarwals-model-portfolio.html

Performance of Real Estate vs Stocks vs Gold in India - 2011 to 2016

When it comes to asset allocation, majority of Indians prefer Gold and Real estate over Stocks as they provide tangibility and sense of security. But sense of security is not sufficient as far as investments are concerned as savings in any form need to beat inflation for creating wealth.

So lets check how each of these asset classes have performed over last 5 years and whether Indians are right in their judgment of allocating majority of their investment capital in Real estate and gold:

CPI INFLATION IN INDIA

CPI Inflation has averaged around 8% in past 5 years

7 Mistakes You Shouldn’t Make When Purchasing Term Insurance in India

Buying a term insurance and buying the right term insurance plan, both are different things. In the scramble to get a low-cost policy, people often forget to read the fine print and end up making mistakes that give inconvenience to their loved ones in the future. Given that, how useful a term insurance policy is, you can’t afford to make a mistake. It is important to exercise caution and wisdom while buying a policy. How? By avoiding the following mistakes:

Image credit: cnbc.com

1. Not disclosing important information on the policy application form: The insurer has rights to reject a claim if it finds that the policyholder did not mention vital points in the insurance proposal form. If your close relative has suffered from any chronic ailment, mention it in the form at the time of buying the policy. Similarly, if you are a heavy smoker, don’t categorize yourself as a casual smoker. It is a suppression of a fact. It is important to disclose your facts otherwise your dependents may face a tough time in getting the claim amount. So even if it means paying a few bucks extra in premium or having to undergo some medical tests, it will be worth it because the purpose for which you are buying a term plan — to secure your family’s future— is met. It is important to be honest when it comes to filling up the form, so that the claim is not rejected and your family is completely secured.

Now get loans through ATMs

The Automated Teller Machine (ATM) got introduced in India about 3 decades back. Initially, the machine that were launched as cash dispensers have over the period taken over host of other banking transactions. Today, the ATMS that are available on all corners of our cities have become an integral part of day to day banking transactions.

With the technological advancement, you can now even look at getting an instant personal loan from these ATMs. What does this mean to you?

• Cutting out on process delays and getting easy personal loans
• As lenders will be vying for migrating the borrowers to ATMs for operational ease and cost effective process, one can expect low interest personal loans
• Given the wide availability of ATMS, funding can be received from any corner of the country without any hassle.   

Investment Advise from Martin Sosnoff

An insight into the life of a lesser known but great investor "Martin Sosnoff"and bunch of advise to take home. Enjoy

Top 5 large companies impacted most by BREXIT

As they say "Unexpected Always Happens" and BREXIT happened exactly when financial markets was least expecting it. Britain exiting from Europe will have large ramifications on European Union and might lead to disintegrating the union which will happen off-course over the years. But this brings uncertainty to businesses and that is what market dislikes most. 

Though India is largely insulated from the BREXIT for the time being but if EU is to disintegrate it could be a serious problem for us also as we do substantial amount of business in Europe. Also the uncertainties in European countries might lead to capital flight to safe heavens such as USD and precious metals which would certainly impact our stock market returns.

On a medium terms basis companies which are deriving more than 50% of their revenue from Euro Zone should be watched carefully for any adverse impact of U.K exiting from Europe. Following are the top 5 companies which derive  substantial amount of revenue from Euro Zone:

4 Bad Behavioral Mistakes in Investing

Source: investopedia

Remember them as ROOM : 
Regret Theory - Overconfidence - Over & under reacting - Mental Accounting

8 Rules that leads to Success

Actual cost of petrol in india without taxes - 2016

After consecutive hikes in fuel prices in India since 30th March 2016, Petrol is almost Rs.9 dearer while diesel is expensive by around 10 bucks in Delhi. 

As on 1st June 2016, Petrol is costing Rs. 65.6 a liter while its production cost is just Rs. 25.31. 

Changes in Securities Transaction Tax - 2016

With effect from 1st June 2016, rate of levy of Securities Transaction Tax (STT) on sale of option has been revised from current rate of 0.017% to 0.05%.

Accordingly, STT on the transactions executed on the Exchange on or after June 01, 2016 shall be charged at the rates indicated below:

Trading Idea - June 2016

This months trading idea is a contra call on Nifty which has seen very sharp up-move of 500 points in a week. But with every rise the valuation of Nifty is getting richer which is already expensive at 8200.

Free E-Filing of Income Tax Return in India – 2016

If you are a salaried individual and need to file your income tax return for the financial year FY-2016 you can do it yourself for free and that too without any technical knowledge.

Online portals like H&R block, Clear tax etc. are offering hassle free easy step by step process that collects your tax related data and documents through simple questionnaires and e-file your returns online. These online e-filing portals are registered e-Return intermediary and information you provide them are absolutely safe & secure. You can download the list of all registered e-return intermediaries from Tax Information Network of Income tax department.

Health Insurance must for a sound financial future

We all talk and listen a lot about financial planning and the importance of right asset allocation for Equities, bonds, gold, real estate etc. but even the best of the allocation strategy will fall apart if we are not adequately insured for life and health.

While many of us have a life insurance, though very small and inadequate, majority of Indians have no health insurance. As per recent National Sample Survey Data released in April 2016, Over 80 per cent of India’s population is not covered under any health insurance scheme. The data reveals that despite seven years of the Centre-run Rashtriya Swasthya Bima Yojana (RSBY), only 12 per cent of the urban and 13 per cent of the rural population had access to insurance cover. This poses a major threat to a family's financial future. 

Portfolio Update - May 2016

Quite a few changes in the portfolio. Exited one, added a significantly beaten down stock with attractive valuations and averaged another.

Please take a look at the updated portfolio:

http://www.investorzclub.com/2013/03/amit-agarwals-model-portfolio.html

Personal Accident Insurance – 16 important points everyone should know

At 28, Viren was one of the most punctilious planners that I had met in my life. He had a good professional life, completing the picture was his loving wife and two kids, whom he adored. Being a family man, he had bought two term insurance policies and a family floater health insurance policy. Armed with both these insurance policies, he was confident about his family’s financial security in his absence.

However, life is not so simple and easy. Viren met with an accident and his grave injuries left him incapacitated to work for at least next two years. While his family floater mediclaim policy took care of his hospitalization expenditure, for the rest, he dug into his rainy day savings to meet household expenses. However, the ordeal did not end here. As the sole breadwinner was unable to continue his job, the financial situation deteriorated. As term insurance policies pay benefits in case of death only; in this case, Viren was alive, and therefore, his term insurance policy didn’t pay anything. Suddenly, his poor state struck hard and Viren asked himself, if he could’ve done anything to avoid his gloomy state. 

Expectations vs Reality

Trading Idea - May 2016

For the Month of May one can initiate a short put trade on Adani Ports. The stock has corrected sharply in-spite of good results primarily because of unexpected balance sheet expansion and slower than expected volume growth. However the fall is quite sharp and has made implied volatility high.

One can sell 1 lot (1600 shares) of Adani Ports 160 put @ 0.5 for a cash flow of Rs.800 before brokerage and taxes.

Total Return from the trade:

Portfolio Update April 2016

Booked significant gain in a stock in the portfolio due to massive run-up. Not that the stock was expensive but a 70% up-move in a very short span of time is quite significant and its wise to take the profit off the table. We made around 40% return on that stock in 6 months time.

Cash Position increased to almost 25% of the portfolio as there has been around 1200 points up-move in Nifty from budget day low.

Please check the updated portfolio for further details:

Model Portfolio Performance Review - 2016

On 21st March 2016, model portfolio completed its 3rd year of existence. Though last year was quite challenging for few stocks due to global commodities melt down, 2017 is expected to be quite good in terms of portfolio performance as the stocks in the model portfolio has deep value and are backed by hard assets on ground.

The detailed performance review of the portfolio at market value as on 21st March 2016 is given below:

Post Office Small Savings Rates - Ready Reckoner

Govt of India has decided to review small saving schemes rates at Post Office on a quarterly basis instead of revising the rates once in a year. 

For the quarter effective 1st April 2016 to 30 June 2016, the rates have been reduced by 0.4% to 1.3% depending on the saving scheme. You can download and print the post office rates in India ready reckoner pdf from the following link:

Life is just an employer - Why ask less?

Jessie Belle Rittenhouse in his very inspirational poem "My Wage" termed Life as a generous employer from whom you can get whatever you ask for. If you ask for penny you will get penny and if you ask billion you will get billion. Life gives you exactly what you ask for. The poem also got featured in the very famous book "Think and Grow Rich" by Napoleon Hill. 

Trading Idea: Sell Nifty 6300 put

After a long while trading idea section is being restarted. Will try to publish one trading idea per month going forward. 

For the month of March 2016, one can sell Nifty 6300 put 1 lot (75) at Rs.15 thereby generating decent return on investment. Since 6300 is a very strong support area, it is highly unlikely that Nifty would close below that level in March series. Implied volatility at 6300 strike is quite high due to budget round the corner.

Total Return from the trade:

Considering one is able to sell the March PUT option of Nifty 6300 strike price at current market premium of Rs. 15 he/she can generate following return from this trade:

Portfolio Update Jan 2016

First Portfolio update of Calendar 2016. Sold a holding, averaged another in half and increased cash position to be deployed on further correction for buying Nifty BEES.

You can check the updated portfolio using the marquee at the right sidebar.

Buy Indian Stocks, China stock market crash an opportunity

Chinese stock markets and fear of its hard landing has played havoc on commodities and scaring equity investors globally. But doesn't it feel like it's getting far too much? Oil at $30 with just around a million barrel oversupply when half the world production of 95 million barrels per day is making cash losses at current prices. Similarly doom Sayers are predicting crash in Chinese economy and thus a crash in global stock markets. Lets look at some facts behind Chinese stock markets and if it really can hurt global investors and markets.

CSI 300 5 Year Chart

1. Unlike mature markets of Europe, America, India etc, Chinese stock markets have more than 80% retail investors with barely 2% foreign holding. So a 50% crash in Chinese market would affects these foreign investors portfolio by just 1%. BIG DEAL!