Deciding the Right Balance between Risk and Returns

Sometimes, even some of the best retirement plans that you’ve worked very hard at achieving are subject to certain unforeseen risks or loss. After witnessing the 2008 financial stock market meltdown, whatever retirement savings accumulated over the years could get wiped out, high inflation rates could eat away at your hard earned savings faster than you planned, with rising life expectancy raising longevity risk, people post retirement may outlive their investments and their accumulated money may not be enough to sustain the desired lifestyle due to personal situations, health care costs which are a few of the unknown.

The one thing that is inevitable is risk – decline in value of an investment during investing. As an investor, one would need to take into consideration the different risks that one may face and how to manage it. Keeping this in mind, making wise investment choices could help diminish risk in a way that helps you reap rewards.

The aim, of course, is to decide the right balance of solutions given the risks that you may face post retirement. For some of you, reviewing and rebalancing your investment strategy may be important, for others, investing less into equities while investing more in safer instruments could be important and for the rest, investing only in safer instruments may be of utmost importance. Nonetheless, for those of you reaching your retirement life or may have already entered that phase, it is important to understand the types of risks that lie ahead and how one may overcome it by protecting their retirement kitty and letting it continue to grow.

Let us look at the different types of risks that you may come across and what solutions you can take to make sure your retirement corpus outlives you.

#1 – Inflation

Inflation can have a big impact on retirees especially those living on a fixed income. Even though various financial responsibilities such as taking care of children’s education, feeding a big family become much lesser, however, other personal duties such as food expenses, paying housing bills cannot be ignored. It is important to know that inflation can affect different commodities differently; food and fuel prices are likely to fluctuate daily, along with volatility. For example, if you have set aside Rs. 3,00,000/- per year for your retirement, you’ll still have the same amount of money – but its value will not be much due to inflation. The Rs.50 toothpaste that you buy today will cost you Rs.80 in 5 years. The value of your retirement corpus will get depleted if inflation is not taken into consideration.

#2 – Interest Rates

The interest rates of savings accounts are already touching the floor. With banks offering lower interest rates, it would be a complete dampener for those surviving on fixed-income investments. Senior citizens and retirees who depend on income from their investments are the ones who are impacted.

#3 – Unexpected Health Care Costs

Due to advances in medical science, there is a general increase in the lifespan of individuals which leads to higher medical expenses that you may not foresee well into your retirement life. The post retirement phase could be as high as 30 to 40 years. Any financial plan should assume long living phase. Unexpected health care costs are a major concern. Long-term health issues such as an accident, illness, chronic disease, cognitive impairment can drain your savings when mental or physical capabilities deteriorate. Ignoring such issues and failing to plan adequately for post-retirement phase may not allow individuals to amass sufficient funds with which one can accomplish all their dreams and enjoy a peaceful retirement life.

A Fund to select part of Asset Allocation Post Retirement

Select Multi asset – Fund of Funds scheme that invests judiciously in a mix of 3 asset classes – Equity, Debt and Gold. This unique combination brings together the volatile equity assets with other relatively less volatile asset classes in the portfolio which is called as asset allocation. Multi Asset helps those investors who are moving closer to retirement or retirees who cannot afford to take high risk investing in equities, but are ok with some amount of moderately high risk to earn an additional return over fixed income with some market risks. While investing in Multi Asset Fund, you can give maximum opportunity to your money to grow during your retirement phase as this fund invests in all 3 asset classes.

Conclusion

Post retirement, earnings come to an end. Many retirees want to follow their hobbies or travel to their dream destinations. It is important to let your regular income continue post retirement to fulfill those dreams but it is also equally important to not let that income erode due to inflation, interest rates or unexpected health costs. If you wish to grow your money and you have some amount of risk appetite, you can look at equities. Remember, asset allocation always plays an important role in the kind of returns your investments generate. Our objective of this article is to help you allocate your assets wisely by keeping risk under control and grow your investments to help you manage your post retirement financial needs. And this can be easily achieved by investing in Multi Asset Fund.

Top 5 Checks While Comparing Mutual Funds

It’s a challenge to choose a mutual fund scheme! The number of mutual fund schemes available in the market would drive any investor insane to zero down on a mutual fund of his/her choice. There is an endless list of checks necessary to be done before arriving at the one mutual fund scheme that meets your requirements and has potential to give decent returns.

Below are the various checks to keep in mind while comparing mutual funds:

Know your fund house:
Choosing a fund house in which you have sufficient faith to invest your money in is important before zeroing in on a scheme of your choice. Investors look for fund houses which can take care of their investments and can manage their money well. Objectives set by fund houses help investors to meet their goals thus securing their future. If the objectives are not met, investors lose faith in the fund house. A budding investor should ask these important questions like, “What are the fund houses’ investment objectives?”, and “How many schemes does the fund house offer to its investors?”, “Are the funds similar under different names?”, “Does the fund make sense to me?” It is equally important to know how the fund manager manages the funds under him/her. One needs to ascertain how schemes have performed during various market cycles managed by the fund manager. A good fund manager is not only important for the fund house but also for an investor.

Fund philosophy:
The next important check is to know the philosophy of the fund house. A set of guiding principles that inform and shape an individual’s investment decision-making process is termed as the philosophy of the fund. The fund house’s investment philosophy plays an important role in determining the performance of its funds in different market conditions. The selection of the funds, investment decisions are directly dependent on the fund philosophy.

Charges and fees:
An Asset Management Company (AMC) that spends on the upkeep of a mutual fund is measured as the expense ratio of a fund. The fees of the advisor, record-keeping, legal expenses, accounting, auditing fees etc. are what make up an expense ratio. Higher churning of portfolio leads to higher costs. It is an expense borne by the investor and is deducted from the investment. For example, if you have invested Rs. 100 and the expense ratio of the fund is 1.25, then your investment is Rs. 98.75. Lower expense ratio means that higher amount is available for investment.

Transparency:
In today’s world it is very important to maintain a good relationship with the customers, and to maintain a good relationship, there has to be a high level of transparency. This holds true even for mutual funds, as all mutual funds disclose the stocks they buy etc., through factsheets SEBI’s new rule, instituted October 1 2016, requires asset management companies to disclose all commissions paid to distributors in the Half-Yearly Consolidated Account Statements (CAS) they send to investors, all this in an effort to bring more transparency into the system.

It is only when SEBI brought the commission disclose rule that we have started paying trail commission to distributors in the Regular Plan effective April 1,2017 by letting you, our investor, know exactly where your money is going and that its serving your interests first.

So when it comes to long term wealth generation that puts the investor first, it may make sense to invest in a fund which focuses on transparency and controlling costs – rather than investing in a typical high-cost mutual fund that consciously uses big ads to attract your money!

Performance:
The last factor is return on investments. All the above factors are major drivers behind the performance of the funds. There are many other factors which have direct and indirect impact on performance of the funds; however, we have discussed the major factors above.

Moreover, it is important to understand that the performance of the funds can change over a period of time (positively as well as negatively), however, its philosophy, ethics, investment strategy are the main pillars. Don’t just only compare the performance of the fund in isolation.

To conclude, sound knowledge and research is very important before choosing a mutual fund to park your hard earned money. Following all the above steps might help you take right decision. However, you may consult your financial advisor before taking any investment related decision.

How to buy shares from angel broking?

It’s a human tendency that a field a person is interested in, keeps full knowledge of it. Does it happen with you too? Like, if you are that filmy person and loves Bollywood then you must have all the information of the industry. Similarly, if you keep your eye on cricket and cricket is your keen concern then you might have all the stats regarding cricket in your head only.

In the same way, an investment enthusiast keeps all the information of what’s happening in the stock market, which company is releasing their IPOs and so on. If you are one among such trading zealots then you must be knowing that recently the giant broking house Angel Broking has released its IPO, and it quite had a blast.

After the release of this IPO many traders thought to shift to or open their new demats in Angel Brokings. This discount broker has made an impressive customer base but many new customers are facing difficulties in knowing the platform. So, let us now see what is this platform and how to buy shares from this?

About Angel Broking

Angel Broking is a stockbroker firm of India that was founded back in 1987.The company, Angel Broking is a member of the Bombay Stock Exchange, National Stock Exchange of India, National Commodity & Derivatives Exchange Limited as well as multi Commodity Exchange of India Limited. It is also a depository participant (DP) with Central Depository Services Limited (CDSL). Currently, The company has more than 8500 sub-brokers, and also franchise outlets in more than 900 cities all over India.

The services of Angel Broking encompass online stock broking, depository services, commodity trading as well as investment advisory services. You can also see services like Personal loans and insurance being delivered by this company. Back in 2006, Angel Broking also started its portfolio management services, IPOs business and also, mutual funds distribution arm.

Angel Broking Review also amasses products such as Angel Eye, Angel BEE mutual fund app, Angel SpeedPro, Angel Trade as well as Angel Swift for online trading.

How to buy shares on Angel Broking?

As discussed earlier, many new users of the prominent discount broker app, angel broking have been dilemma that how to use the platform. Though it is very easy platform to handle, but there are always some new people who are not very easy with the technical terms.

So, we are here to solve your one problem of buying shares from the angel broking app. So let’s see how we can do wonder via this platform.

The straightforward process of buying stocks from angel broking is shown below:

Firstly, you are required to click on the menu in the app.
Now you will find an option named as trade. You are now required to cluck on this trade option.
Another option will appear to you ‘buy-sell’, select this option.
Now to search the stock that you are willing to buy, you will be required to click on the search. Now just select the stock you would like to or prefer to buy.
At this moment, an option must be available to you as ‘exchange’, select that option.
Now, simply click on the buy button.
Now, a window will appear to you. This window is known as the buying window.
Now, an option will appear to you as ordered by quantity. Simply click on this option.
Here, you will select the desired option and enter the quantity.
Now, it is the time to select the order type. The two options are limit order or market order.
Now, you will be required to select the product type. It includes intraday, delivery and margin trading.
Now, select the validity( day or IOC).
Finally, to buy the stock click on the submit button. Now your order will be placed.
Hope, now will be clear with the idea of how to use the app and particularly buy shares from the discount broker, angel broking.

What is ‘watchlist’?

Many wonder, what is a watchlist? What is the purpose of this and how is this used? Let’s know that!

So, the watchlist is available to you by default, when you install the app and open it. In the watchlist you could add your favorite or preferred stocks, that you feel you are interested in and feel you will trade frequently.

The benefit of adding the stocks to the watchlist is that you get information about the stock as well as it’s price rates.

Index segment

Another appreciated option in the angel broking app is the index segment. In the index segment you would see the Nifty’s top 50 stocks and sensex’s top 50 stocks. It include options like Nifty, sensex, bank senses and others.

Wrapping words

Angel Broking is nothing but just another platform that provides you with the facility of online trading. It makes the trading procedure more interesting. Over the past few years, it has been tremendously successful in expanding its customer base with a bang.

After reading the above article, you must have cleared yourself with angel broking, what is it all about? How to use the platform? And, how to buy shares from the angel broking.

To be honest, the system is damn easy and could be used by anyone, even if you are new to the game you could use it like other regular apps. Just within a few steps, you could place orders of different stocks and sell it as well. You could do this even while trading in different segments like equity, currency, derivatives, commodity etc.

Apart from having the cutting edge tools, the giant platform angel broking, allows all the traders or investors present out there to Proceed with the techniques of risk management. The platform of angel broking is a one that comes out with advanced technology in all the aspects whether it’s the financial tools or if the graphics of the app are concerned. It will suit you in each and every situation.

If you are really among those who are choosing angel broking as their trading platform then this is time.