How Arbitrage funds manage sudden restrictions on derivative trading in a stock

 If derivative positions are restricted for a month in a stock, arbitrage funds that depend on taking counter positions in the cash and derivatives market will face significant challenges. Here’s what could happen:

1. Arbitrage Opportunities Vanish

• Arbitrage funds rely on price differences between the cash market (spot price) and the futures market.
• If derivatives trading is restricted, there will be no futures market to hedge positions, making it impossible for arbitrage funds to execute their usual strategies.

Charlie Munger's Wells Fargo Investment in 2008 crisis

 During the 2008 financial crisis, Wells Fargo's stock price experienced significant fluctuations:

• 52-Week High: Approximately $38.90 per share.
• 52-Week Low: Approximately $7.80 per share.

Charlie Munger, serving as chairman of the Daily Journal Corporation, made a strategic investment in Wells Fargo during this tumultuous period:

• Investment Amount: Approximately $20 million, sourced from Treasury bonds.
• Acquisition Price: Shares were purchased at around $7 per share, totaling just under 1.6 million shares.

The Salad Oil Crisis & American Express (1963)

 The Salad Oil Crisis was a major financial scandal that hit American Express (AmEx) in 1963. It was caused by Anthony "Tino" De Angelis, a commodities trader who ran Allied Crude Vegetable Oil Company. He took massive loans using falsified collateral—tanks supposedly filled with soybean oil that actually contained mostly water.

Since American Express was heavily involved in warehousing and certifying collateral for loans, they were directly implicated when the fraud was uncovered. The company faced huge liabilities and its reputation was severely damaged.

ICICI Bank faced similar crisis during 2015 to 2017 period

 ICICI Bank faced several controversies and adverse news reports between 2015 and 2017. Here are some of the biggest issues:

1. Videocon Loan Controversy (2016-2018)

• One of the most significant scandals that surfaced was related to a conflict of interest in loans extended to the Videocon Group.
• It was alleged that ICICI Bank, under then-CEO Chanda Kochhar, sanctioned ₹3,250 crore in loans to Videocon Group.
• Later, a company linked to her husband, Deepak Kochhar’s NuPower Renewables, received investments from Videocon’s chairman Venugopal Dhoot.
• This raised allegations of quid pro quo, misuse of power, and lack of transparency.
• Eventually, this controversy led to Chanda Kochhar stepping down in 2018.

How RBI’s Ban on Internal Trades Affects Indian Banks

How RBI’s Ban on Internal Trades Affects Indian vs. Foreign Banks (Like HSBC)

RBI’s September 2023 directive prevents banks in India from using internal trades for currency and interest rate risk management. Instead, they must use external market instruments for hedging. However, this rule impacts Indian banks and foreign banks (like HSBC) operating in India differently.

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🔵 Impact on Indian Banks (SBI, HDFC, ICICI, etc.)

Longevity diet plan

 🔹 Updated Longevity Diet Plan (with Morbon XT & Vitamin C included)

How to beat Trading Algorithms

In USA over 80% while in India over 50% of trades are executed by trading algorithms. Beating trading algorithms, also known as algos, can be challenging, as these computer programs are designed to execute trades based on a set of pre-determined rules and conditions, and they can execute trades faster and more efficiently than humans. However, there are a few strategies that traders and investors can use to try to gain an edge over algos:

Use fundamental analysis: Algos are typically based on technical analysis, so focusing on fundamental analysis and understanding the underlying value of a security can provide a different perspective that algos may not be able to replicate.

Use market knowledge: Algos cannot account for market nuances such as emotions, politics and other market factors that may affect the market. By keeping informed on market events and understanding how they may affect the market, traders can gain an edge over algos.

Use diverse data sets: Algos may only use a specific set of data, so by using a diverse set of data, such as alternative data, traders can gain insights that algos may not be able to replicate.

Be flexible: Algos are based on a set of pre-determined rules, so they may not be able to adapt to unexpected market conditions. By being flexible and willing to adjust strategies as needed, traders can gain an edge over algos.

Trade less liquid markets: Algos tend to focus on highly liquid markets, so by trading in less liquid markets, traders can gain an edge over algos.

It's important to keep in mind that these strategies are not guaranteed to be successful, and that the performance of algos can be influenced by a variety of factors such as market conditions, the quality of data, and the design of the algorithm. Additionally, it's important to keep in mind that beating algos is not the only goal, it's important to focus on creating a profitable strategy.

Limitations of Trading Algos: Trading algorithms are designed to automatically execute trades based on a set of pre-determined rules and conditions. While algos can provide many benefits, such as executing trades faster and more efficiently than humans, they also have certain limitations. Here are a few examples:

Lack of human judgement: Algos do not have the ability to exercise human judgement or interpret market conditions in the same way that a human trader might. This can lead to missed opportunities or mistakes.

Complexity: Some algos can be very complex, and require a high level of expertise to design, test, and implement. This can limit their accessibility to traders and investors.

Data dependency: Algos rely on accurate and up-to-date data to function properly, so if the data is inaccurate or not current, the algorithm may make incorrect decisions.

Lack of flexibility: Algos are based on a set of pre-determined rules and conditions, so they may not be able to adapt to unexpected market conditions or changes.

Limited decision making: Algos can only make decisions based on the information and rules programmed into them, so it may not take into account other important factors such as emotions, politics and other market nuances.

Risk of over-fitting: Algos can be over-fitted to the historical data, which means they may not work well in real-world situations and may lead to poor performance.

Lack of transparency: Some algos can be proprietary and not transparent, which makes it difficult to understand how they make decisions and evaluate their performance.

Common Algo Trading Strategies: There are many different types of algorithmic trading strategies, but some of the most common ones include:

Market making: This strategy involves using algorithms to automatically buy and sell securities to create liquidity in the market.

Statistical Arbitrage: This strategy involves using algorithms to identify and take advantage of statistical anomalies in the market.

High-Frequency Trading (HFT): This strategy uses algorithms to execute a high volume of trades in a very short time period, typically taking advantage of small price discrepancies.

Trend Following: This strategy involves using algorithms to identify and follow trends in the market.

Mean Reversion: This strategy involves using algorithms to identify and take advantage of securities that are under- or over-valued.

Event-Driven: This strategy involves using algorithms to identify and take advantage of market-moving events such as earnings announcements, mergers and acquisitions.

Pair trading: This strategy involves using algorithms to identify pairs of securities that are highly correlated and buying and selling them to profit from their relative performance.

Risk Management: This strategy involves using algorithms to monitor and manage risk in a portfolio.

It's important to keep in mind that these strategies are not mutually exclusive, and many algorithmic trading strategies involve elements of multiple strategies. Additionally, new strategies are constantly being developed, and the effectiveness of a strategy can change over time depending on market conditions, competition, and other factors.

Oil and Gas is not dead yet

Elon Musk says the world still needs oil. “Realistically I think we need to use oil and gas in the short term, because otherwise civilization will crumble," Musk said on the sidelines of an energy conference in the southern city of Stavanger.

In my view India will need another 10-20 years after the world transition to clean energy as the technology has to be affordable for India to adopt it fully. Many ideas can be executed on that theme as the stocks are severely battered in Oil & Gas sector. Unfortunately there is not much direct play on this space in private sector. I am averse to PSU companies so ONGC, OIL, GAIL, Coal India etc are out of investing universe for me.

But there is a drilling company named Jindal drilling which can be looked at. A small oil exploration company Selan Exploration which underwent management change recently can be looked at as well. 

Adding > 10% of model portfolio to Selan exploration and ~ 3% to Jindal Drilling.

Model Portfolio: https://www.investorzclub.com/2013/03/amit-agarwals-model-portfolio.html

TV Today Network Analysis april 2022

 # The company is expected to report better revenue and earnings compared to March 2021 quarter primarily due to up elections and economy opening up. 

# I am expecting the company to do a revenue of at least 250 crores and 75 crores of operating profit.

# Based on this assumption TVTN is expected to close the year with the following financial performance:

        Revenue: 938 crores (ATH)

        OP: 272 crores (ATH)

        PBT: 270 crores (ATH)

        Tax @ 26% = 70 crores (ATH)

        NP: 200 crores (ATH)

        EPS @ 6 crores equity shares = 33.3, (ATH)

        ROE: 20%

        EPS growth: 50%, 5 yr CAGR of 15%

        10 year CAGR profit growth = 35%, 

        Market price in april 2012 ~ 60. 

# Valuation: @ cmp of ~ 410, the stock is valued at 12.3 times current year earnings and a pre tax yield of roughly 11%

# if the earnings are valued at modest 15 times and cash equiv per share of 100 added, the target that can be aimed at is 500 + 100 = 600 /-

# So a conservative target of 600 can be aimed for in next 3 months if there is no major geopolitical shock.

# Ideally a company which does 50% growth in earnings in a year can also get valued @ 30 times earnings in buoyant market conditions. If such ideal scenario plays out the stock can even reach levels of ~1000 in next 1 year time frame.

# Also ideally the stock price performs inline with profit growth over long term. Hence a 35% cagr in stock price from 60 levels ( april 2012) gives a target price of 1200.

Downside: Considering the kind of performance the company is doing, it is highly unlikely that the stock will fall below 10 times earnings. Hence there seems a max  possible downside of 330.so for 80/- kind of risk, there is a potential to make 2.5 times risk in modest case and even 8 times in case of blue sky scenario.

On chart also the stock recently bottomed out @ 357 and the structure appears bullish:

https://www.tradingview.com/x/O65VW2EF/

All time high of the stock = 557.95 (16th mar 2018)

The Casino Market - Will this madness ever end?

Having spent 15 years in Indian Stock market, there has never been a time when it felt like absolute chaos and gambling den. Across the globe people are buying and selling stocks not for investment but for story and for speculation.

I come from old school of buying / investing in assets at reasonable prices whether its real estate, share in companies (equities), websites/blogs etc which has at least one of the two essential characteristics:  

1. It gives me cash flow 

2. Holds its value without much fluctuation.

Of all the assets I own, equities have clearly become a non-investable asset class. Its neither giving me even a bare minimum cash flow due to absurd valuations nor holding its value stable. The price fluctuations are so monstrously large that its beyond anybody’s capacity to comprehend. We are adding and losings trillions of dollars in market value in a year based on perception and story. This is extremely unhealthy for equities as an asset class as subconsciously investors lose confidence on ownership in companies and they refuse to buy at any price when prices start to fall.

Compare it with an asset class such as Real Estate or Gold. When real estate prices in your neighborhood corrects people won’t hesitate to commit money and there is floor to the prices. They know they can use to for shelter, shop or rent depending on the nature of the property. Similar is the situation with Gold. When prices correct even 10% people rush to purchase gold jewelry for wedding or investment. Stocks on the other hand are losing and gaining 10, 20 or even 50% in a day. This makes it very hard for people to stay invested which is a very dangerous situation for capitalism and stock market where companies sell ownership.

Individual companies are valued at trillions of dollars these days. Apple + Google + Microsoft is valued at over 5.5 trillion dollar which is 2 times the UK economy.  Companies are no longer being valued on earnings and sales and value investing is claimed to be dead. People are valuing stories. I asked myself yesterday, will I invest in a real estate property with excellent story but no cash flow for next 10 years and the answer was absolute ‘NO’. So how Can I invest in stocks with 100 pe multiples where theoretically it will take 100 years to get back my money.

All the money printing in the world has already created massive Inflation is paper assets which will eventually flow into good and services creating massive consumer inflation which will force the madness of Central banks worldwide to end this mindless money printing. It might happen in next 3 months or it might take another 3 years who knows, but valuation have always been my guiding torch and I won’t be leaving its company specially in this time of madness even if the pundits across the world says it’s dead. Common sense can never be dead. It’s the greed at that moment that is trying to make us all believe that common sense is for fools. But those who have developed grey hairs like me while being in the market will resonate with my thoughts that the protection of capital is far, far, far more important than appreciation of capital.

Sometimes writing your thoughts makes the big picture even more clear and helps you in taking good decision. I have written this post during market hour today as I felt tired watching the madness in the market and thought of spending some quality time penning my thoughts. This post will also help me in future to go back in time and read what I used to think back then.

 

Equity Portfolio Update - 20th Jan 2021

 # Exiting all the stock positions to go 100% cash.

# Primary reason being the market on steroid which is exactly the opposite of what was happening in march 2020. At 40 time pe multiple based on FY-20 EPS the market is extremely overvalued and stretched. Even if we assume FY-23 Nifty EPS of 700 (almost double of FY-20), it is still trading at 20 times forward multiple.

# At mid sized bank the deposit is yielding 8% or 12.5 pe multiple while the stock market is trading at 40 times on TTM basis and 20 times on an optimistic eps assumption for FY-23 FY. I would rather keep my money in debt rather take risk on stock at current levels. Hence the cash call.

Please check the updated portfolio on what was sold and where has the cash been parked.

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

Equity Portfolio Update: 7th Jan 2021

Model  Equity Portfolio Update after 1.5 years. Encashed most of the stocks barring one. Please check the updated portfolio for more details:

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

Buy Cancer Cover and Secure your Finances

 The risk of cancer has become real and is beginning to threaten most of the population in India. According to the Indian Council of Medical Research (ICMR), this life-threatening disease is expected to affect more than 17 lakh people and resulting in over 8.8 lakhs in the country by the end of 2020. Some other reports specify how cancer is set to engulf even the youngest of the population and will be a major health concern by the end of 2035. 

What is even more burdening is the cost of treatment for cancer. If not diagnosed and treated properly, cancer can cause death most certainly. In such a case, buying a term insurance plan or a health insurance is not enough, it is always wiser to invest in stand-alone cancer insurance to financially protect you and your loved ones from the dreadful disease.

Importance and need of a cancer cover

Cancer is a deadly and financially burdening disease. Moreover, with the recent advancements in the treatment of cancer, newer technologies have become more out-of-reach for the common man. Hence, a specialized cover like cancer insurance provides your financial support in dire times.

Best Way to Invest In Gold

If you have been thinking of buying gold for your portfolio either to protect your hard earned wealth from the perils of fiat currency printing by central banks or to simply boost your portfolio return, then there are many different ways to have an exposure to the shiny metal beside the age old way of buying gold jewelry. 

Following are 3 different ways to invest in gold with their respective pros and cons. We will also tell you the best among the three, that we prefer, if you have long term bullish outlook on the metal.

History of Gold Price in India in Rupees per bhari since 1964

History of gold price trend in India since 1964. Prices in both bhari* (Indian metric system) and per 10 grams.

This chart contains the average annual price for gold from 1964 in gms

How Mutual Fund Investing is becoming simpler and hassle free

Mutual fund investments used to be a tedious process few years back.  It involved numerous visits to the adviser's office, lengthy paperwork & payment formalities. Financial service providers eventually invested heavily in technology to make investment easier and reduce the monotony of the process. However, one thing digitization and technological advancement cannot solve is the dilemma of choosing the right scheme to fulfill your investment goal. To deal with this everlasting problem, ICICIdirect, has introduced “One Click Investment” a one stop solution for all your mutual funds investing needs. With One Click, investors can choose from 6 thoughtfully researched baskets of Mutual Fund schemes, which are carefully curated to help you power your investments.

There are several categories of portfolios depending on mix of equity and debt exposure to choose from, ranging from 100% debt to 100% equity.

The investment baskets offered under One click are described below. The investor can choose the best basket as per his/her financial goal.

Portfolio Update Sep 2019

The broader markets have witnessed humongous damage to stock prices in India specially midcap and small cap stocks since past 1 year or so. The economic slowdown, crisis in PSU and NBFC space and series of corporate defaults and frauds has lead to loss of confidence in Indian Stock Markets which has resulted in heavy FII selling.

The crisis seems to be deepening further and Individuals seems to be coming under financial pressure from loss of jobs, poor confidence in Indian economy and fall in savings rate. According to me there is little that govt. can do to reverse this immediately and it appears that it will play out on its own. If things carry on like this for some more time, the SIP flows will take an impact which might lead to further selling pressure.

The India domestic story doesn't appear that rosy anymore and hence a major churn is done in the  portfolio. Please check the updated portfolio for further details.

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

Amateur vs Professional Traders

Home Insurance – Basics You Must Know

Unlike car and life insurance, home insurance in India is a relatively new concept among majority of people in India especially Tier 2 and Tier 3 cities. But with majority of homes now being purchased on a mortgaged loan from banks, the buyers are increasingly being made aware about the benefits of taking house insurance and home appliance insurance (household articles) along with the loan. In some cases banks are refusing to offer loans without a home insurance policy to safeguard their interest in worst circumstances.

2 Ways You Can Ensure That Your Family's Financial Goals Are Fulfilled

A Goal Without A Plan Is Just A Wish”- Antoine de Saint-Exupéry

We set goals all the time. For instance: losing 10 kilos, eating healthy, running a marathon, writing a book and so forth. But financial goals, which are the most life-changing goals of all, are often put on the back burner.  

Accumulating funds for children’s education, building a multi million-dollar investment portfolio or starting a business can all seem a bit too hard. But it doesn’t have to be that way. With the right financial instruments, plans can be put into place, and everlasting happiness can be attained!

Market Share of Luxury Car Companies in India - 2018

• Luxury Car segment performance stayed flat in 2018.
• Mercedes retained the no.1 position with 38% market share.
• Jaguar Land Rover the biggest gainer in terms of YoY Sales increase

Automotive Industry in India at a glance - 2018

Sales and growth numbers for cars, commercial vehicles, two / three wheeler and farm tractors in india*. 

* Extract from M&M Annual Report 2018

7 Important Things to Avoid Regarding Personal Loan

Personal Loans are a great a way to tide over your short term financial need as it requires relatively less documentation, quickly disbursed and doesn’t require any collateral. The interest rates these days offered by banks and financial institutions are also very competitive especially for borrowers with high credit score.  But there are certain vital things that one should keep in mind regarding personal loans:

1. Avoid Applying for loans with too many banks: This is a very important point as not many people are aware of this fact. You need money urgently and you might be tempted to apply with multiple banks in case your desired bank doesn’t approve your application. With advent of online banking, it has become very easy to apply for personal loan online with several banks. This is a bad strategy in this case. Every time you apply for a loan with a bank or any financial institution, it will check your Credit Score on CIBIL. Now with each credit score check your overall credit score comes down a little bit. Now if some four - five banks check your Credit Score at the same time it’ll hamper your score in a meaningful way, which in turn will pose a problem in getting your loan sanctioned. Also lower credit score result in higher personal loan interest rates.  
2. Avoid taking large loan amount: Just because personal loans are structured in such a way that you don’t have to discuss the reasons for taking one, it doesn’t mean you try to get as much as you can. Take only as much as you can afford to repay. Taking a loan amount more than you can afford to repay on time will put you in a debt trap. 

Bull vs Bear Markets

How to improve your credit score through simple snowball effect?

If you are reading this you are definitely looking for improving your CIBIL score (the most widely used credit score referred by lenders to hand out the loans) and this article will certainly help you in achieving this objective specially if you haven’t taken a loan before.

Since you don’t have a credit history the lending institutions will hesitate to approve your loan application especially medium to large ticket sized loans for items like Cars, Home etc. Let’s first understand the range of scores assigned by credit rating agencies and their grades:

Credit Score Ranges
Range	Grade
0 or -1	No Credit History
550 - 300	Bad
551-649	Poor
650-699	Fair
700-749	Good
750 and above	Excellent

If you fall into the first three categories of the above table, not only there is higher chance of application rejection but also the cost of loan is going to be higher, which is the interest rate you pay on the loan amount. The only way to improve your credit score is to make timely payment on your dues and in short term that can be done either by having a credit card and paying all its dues timely every month or you can improve yourCredit Score with Personal Loans.

Kya Lena Chahiye?

My reply to everyone asking me "Kya Lena Chahiye" after this brutal market fall.

Equity Portfolio Update

Significant panic witnessed in our markets due to IL&FS issue which lead to very sharp corrections in some of our stocks we hold in our portfolio. This was largely expected and we were more than 40% invested in liquid bees. Deployed all the cash today to bring down the cost of some of our holdings and also added a new name which I feel could be a potential turn around candidate as the sector itself is at the cusp of turnaround.

You can check the latest portfolio from the following link: InvestorZclub Equity Portfolio

Go Cashless with Debit Cards

Debit cards make daily money management easy and fuss-free, and they also offer many benefits that save your money. 

The country took to the Digital India initiative in a big way when de-demonetization was announced in November 2016, bringing the nation to a standstill. With ready cash not available, people were forced to transact using their debit and credit cards for all their needs. However, this was a positive development as far as spending electronically goes – debit cards offer tremendous mobility to all users since you don’t need to dispense with cash at all. Whether swiping the card at a payment terminal, or withdrawing money using the ATM card, or using the card number while completing an online purchase, a debit card makes money management really simple.

Leading banks in India offer customers debit cards online, with frequent cashback offers and discounts on using the card. Apart from the convenience of using the card, the debit card offers result in good savings and unique experiences for the card holder.

The argument for using debit cards…

Earlier, most people preferred using credit cards instead of debit cards, because the former added a lot of reward points on most purchases. However, banks have excellent debit card offers that offer customers a range of experiences, discounts and cashback on using the card at select merchants. These days, airlines, five-star hotels and high end retailers also accept payment using debit cards, while some e-commerce giants offer EMI schemes against debit cards as well. Moreover, debit cards are always a better option than credit cards, for the following reasons: 

5 Things You Should Know about Credit Monitoring

Imagine you going through a lot of pain to maintain that perfect credit score. You make all your payments on time, no defaults and there is no chance of you being in bad books of credit. All of a sudden you encounter an emergency and decide on applying for a personal loan. When applied for the same, you are rest assured that your loan will be sanctioned within no time; all of a sudden you receive a bad news stating your loan has been rejected! Now you are in a confused state on how this happened and how is it possible on the first place, because you used to make all your payments on time.

After a brief inquiry, you happen to know that you are a victim of identity theft and your information is used for making various financial purchases. Your banker understands the same and suggests you opt for a credit monitoring plan. But what is a credit monitoring plan? Is that necessary for me? How is it going to be beneficial for me? If you have been a victim of identity theft, the answers to such questions are mentioned below:

Credit Monitoring

Let us first understand what is credit monitoring. A credit monitoring service is offered by various third party companies who can keep a track on your credit related transactions and maintain your credit score for future transactions. Customers usually use this service to guard them from identity theft and also to improve cibil score.A credit monitoring service keeps a close eye on your credit activity and notifies you of any credit transactions happening towards your account. The transactions can include any hard inquiry, purchase of a new loan, etc. Some monitoring services also give you a comprehensive tracking of the cibil scores.

Major Crypto currency bubble burst

Major cryptos that saw more than 80% correction from high

Modiji please provide msp for midcap stock also

How to Plan for Retirement When You're Already in Your 40's?

We are always told to start saving for retirement right from the time when we are young. However, what are you to do if you weren’t able to save much and have entered your 40s now? Is it still possible to plan for your twilight years now? The answer is “yes”!

The following are some tips on how you can plan for your retirement even if you started late:

1. Pick a Number

The first thing you need to do is determine your retirement amount. Many experts believe that you need around 10 times your ending income to survive through the retirement years.  However, since you are beginning to save money quite late, you may not be able to achieve that target by the time you retire. So, what you can do is crunch some numbers and get a “conservative” figure that works for you.

2. Start Saving

Now, not only you need to start saving as soon as possible, you must increase the saving amount every month. The rule of thumb is that you should put 10% of your income in the retirement fund, but in this case, it might not be enough. This is because you have to achieve your target in less time as opposed to those who start saving for retirement early. Thus, you should go for 20% savings instead.

You should also try to increase the percentage over time as you see fit. Just be sure you have enough room for the payment of EMIs and credit card bills as you don’t want to hurt your CIBIL score. After all, it’s not easy to get a loan with bad credit score.

Phases of an Asset Price Bubble

Phases of an asset Price bubble

From South Sea bubbles or tulip mania of 16th century to dot com crash of 2000 and housing bubble of 2008, a typical asset price bubble consists of 4 major phases:

5 Trading Advise From The Best

"Most people approach trading to make a lot of money, and that is one of the primary reasons they lose." -  Van Tharp (Trading Coach)

"There is no need to rush into any position, wait for your signal. Rushing into a position and chasing a stock is one of the main reasons that traders lose money. Follow your trading plan not your emotions and impulses." -  Marty Schwartz

"Trading offensively is trying to grow you capital while defense is protecting what you have. Winning trades are how many points you score and losing trades is how many points you give up to the other team. While offense is great for a show defense wins championships." - Paul Tudor Jones

Easing into retirement by reducing liabilities

Make your retirement the happiest phase of your life with systematic planning and a few decisive moves today.

Every person who works hard all their lives does so with the expectation of retiring in style. They wish to ease into the last years of their lives in comfort and peace, secure in the knowledge that they’ve done everything they could for the good of their loved ones.

But wishing for a peaceful retirement and actually getting it are two different things. It takes a lot of planning and hard work to be able to retire with grace and dignity. And the time to put in the work is now, while you are still employed and have a regular income. You can follow this simple guide for retiring with complete fiscal security.

Think of retirement as a journey, not a destination.

Many people think of retirement as a phase where one’s active life ceases and one of rest and relaxation begins. But you can fashion your retirement the way you want – you can be as active or as laid back as you wish! It can be a phase of true contentment, as you rediscover and explore the things that matter the most to you. You did not have the time to indulge your hobbies the way you would have liked for several years – retirement gives you the opportunity to travel, make new acquaintances, take up a sport or hobby, be by yourself… the world is your oyster, and it’s time to make it yours!

5 pitfalls to avoid in the home loan application

Following are the common areas of error that you are likely to make when applying for a home loan – and how to avoid them.

As if buying a house in an escalating property market wasn’t difficult enough, you also need to navigate the home loan process carefully. Though home loans have been suitably simplified by leading housing finance companies, some parts of the process can prove to be veritable landmines. These errors can prove costly in the long run, and even result in the loan application being rejected. We list these areas of potential trouble and enumerate how you can avoid them:

1. Not having enough money at your disposal for a range of payments.

Most first-time home buyers are aware that they require some amount of money to make a down payment on the house. The down payment is normally split into two components: The token or booking amount, and the first installment on the house. But you also need to have sufficient money at your disposal to pay the following costs, which will not be paid from your home loan:

• Stamp duty costs 
• Registration fees
• Lawyers’ and broker fees
• Money to pay towards placing an advertisement in the paper asking for claimants to the property to come forward (this cost is split between the seller and buyer)
• Home loan application fees
• Lender’s evaluation and processing fees
• Stamp duty on the loan agreement
• Pre-EMI money (before the first EMI is deducted)
• Society/developer transfer fees
• Society membership fees

Find out all these costs and set aside the money accordingly – or you may come up short!

How to plan early for a relaxed life post working years?

Benjamin Franklin once said "Failing to plan is planning to fail" and it sounds so obvious for one of the most important part of our lives - RETIREMENT. Proper retirement planning considering your current standard of living, your assets and liabilities and the impact of inflation on them, will help you enjoy a relaxed life post your working years.

Use a retirement calculator to estimate the amount you would need to invest now to lead a comfortable life post-retirement. Once this amount is known you can buy a retirement policy from an established insurance provider. Today more than a dozen insurance companies offer retirement &  pension plans with several benefits / flexibility ranging from single premium pension plans to regular annual premiums, lump sum payment to annuity payouts or a combination of both and many others.

3 Margin Types that every derivative trader must understand

If you are a derivative trader in Indian stock Markets specially an Option writer (Call and put sellers) or futures trader, you must understand various types of margin imposed by your broker. Failing to maintain adequate margin can lead to very high penalty beside ad hoc squaring-off existing positions to trim the size of your overall positions.

SPAN margin

The initial margin required for the positions is computed online and on an intraday basis, using a software called SPAN (Standard Portfolio Analysis of Risk). Sellers of options (both call and put) and holders of futures (both long and short), where the potential losses could be high, are required to have sufficient margin in their accounts. The SPAN system uses strike prices, risk-free interest rates, changes in prices of the underlying securities, changes in volatility and time-value to calculate the worst possible move in the security. For the exchanges, SPAN margin covers almost the entire risk for the day, minimizing the systemic risk due to margin pressures.

Kotak Free Intraday Trading – What you should know?

In this age of disruptions companies are differentiating themselves by offering products and service to creates sticky customers. Across customer facing industries there are companies which are taking on competition by offering more value for the buck. As a consumer, online retail & telecom comes at the top of the mind where disruption has brought bonanza for customers.

There are disruptions happening across financial services industry as well. Brokerage industry, for instance, is facing disruptions from discount brokers and off course full service brokers are responding with innovative offerings. One such recent offering is FreeIntraday Trading (FIT) from Kotak Securities which has waived off brokerage on non-delivery based trades for retail clients.

So how significant is this?

Considering the fact that an average intraday self-trader spends 220 rupees on brokerage per day and approx. 5000 per month only on cash segment, the savings are significant if you add-up the total intraday brokerage paid in all segments put together (cash, futures, options).

6 Important Things to Know About Fixed Deposits

Fixed deposits at banks are one of most convenient, safe and hassle-free investment instruments that also provide reasonable returns. With the advent of online banking these days, you can open FD online within few seconds and clicks.  The tenures in fixed deposits are fixed and usually provide higher return on higher duration. For example, a one-year deposit might fetch 6% per annum return while a 5-year deposit might fetch 7% per annum return depending upon the financial institution. Following are some of the key things to know about fixed deposits:

1.  The rate of return on fixed deposits is fixed. Unlike other high-risk investments like stocks, mutual funds, and debt funds, FD Interest rates aren’t dependent on fluctuating market rates.

2.   All banks provide flexible tenures to choose from. You can open an FD account for as low as 6 months to a maximum of 5 years.

3.   You can avail loan against your Fixed Deposits. Some banks provide up to 90% of the total FD value as personal loan. Unlike other unsecured personal loans, you get lower interest rates when you secure your loan with your FD as collateral.

4.   You can choose between cumulative and non-cumulative options. In cumulative fixed deposit option, interest is accumulated over the tenure of the FD and is paid only at the time of maturity. This helps you in getting a lump-sum amount on maturity. You can use a simple FD Calculator to know the amount you will receive on maturity. A non-cumulative FD works on the opposite principle. In these fixed deposits, the interest payments are made to the investor in a periodical, steady, and timely fashion. This makes it the most sought-after investment option by retired investors, or those who seek frequent cash flow.