15.12.2015
Buying a mutual fund may be the smartest decision you can ever make , however with over 12,000 mutual funds to choose from, it can also be your worst if you don’t know what your doing. Low start -You can get started for as little as $100, but 2000 – 3000 is the common minimum. Diversification- Buying a mutual fund provides instant holdings of several different companies. Liquidity- Like individual stocks, a mutual fund investment can be converted into cash upon your request, in other words, it gives you convenient access to your money.
No Control- Unlike picking your own individual stocks, a mutual fund puts you in the passenger seat of somebody else’s car. Buried Costs- Many mutual funds specialize in burying their costs and in hiring salesmen who do not make those costs clear to their clients.
The mutual fund portfolio is a pool of investments created from the fund manager’s investment decisions, which are held in trust on behalf of the individual investors.
A diverse array of mutual funds is available to investors, including money market, fixed income, balanced and equity funds.
Your advisor can help you build your portfolio, ensuring the funds you choose fit your investor profile, risk tolerance and investment objectives. These types of funds invest primarily in treasury bills and other high quality, low risk short-term investments. By investing in fixed income securities such as mortgages, bonds and preferred shares, fixed income funds offer regular cash flow while preserving capital. Mutual funds make global markets accessible to every investor, opening up the opportunity to participate in capital markets across the globe.
Mutual funds in general can hold many different investments, offering a level of diversification often only achieved with larger portfolios. Mutual funds are considered liquid investments because you can usually redeem your units as the need arises and have your money available within two business days.
The less you pay for your investments, the more you keep, making the cost of investing something you should always try to minimize.
On an initial investment of $25,000 at an assumed rate of 8% before fees for the Balanced Portfolio, a 0.27% difference results in an additional $1,133 in growth for the portfolio over 10 years.
The returns you earn as an investor reflect performance data that is reported after the fund’s MER is deducted.
A sales commission (referred to as a load) is a one-time fee sometimes paid to an advisor’s firm for selling a mutual fund to investors. When you choose a front-end load fund, you and your advisor negotiate the percentage to be charged, which generally ranges from 0% to 5% of the amount you invest.
Mutual funds that are intended for long-term investing typically charge fees if units are redeemed within a short time period (e.g.
MERs of our funds are commonly seen as among the lowest of all actively managed funds in Canada. May 13, 2015 by Nick Raquel 17 Comments You have at least P500,000.00 in your bank deposit account and are planning to invest it in an investment that would help you make your money work for you. First off, the listed options are all pooled funds managed by professionals called fund managers. Unit Investment Trust Fund, popularly referred to as UITF, are offered by banks and managed by their trust department.
Mutual Funds, on the other hand, are managed by Investment Companies and are regulated by the Securities and Exchange Commission (SEC). The truth is, there’s really not much difference between a mutual fund and UITF in terms of benefit.
Allow me to use Sun Life’s Maxilink One as a sample for Single Premium VUL, and Sun Life’s Prosperity Fund for Mutual Fund. Looking at the projected 10 year fund value, you might be concluding that it’s best to invest in mutual funds because it’s higher than Single Premium VUL by P6,885.23. This means that in the event a policyholder (investor of a Single Premium VUL) dies while the fund value of his investment is lower than P625,000, his beneficiaries will still receive the minimum death benefit of P625,000.
Say the fund value of the invested P500,000 at the time of death is P400,000 (market declined significantly), the beneficiaries will still be receiving the GUARANTEED minimum death benefit of P625,000 (as long as no withdrawal was made in the fund).
Or lets say the fund value at the time of death is P800,000 (market rises significantly), the beneficiaries will be receiving P800,000, which is higher compared to the minimum death benefit.
In case of a Mutual Fund or UITF, the people left behind will receive only the fund value, regardless if it is higher or lower the the amount invested. If you have defined an irrevocable beneficiary, your investment becomes tax exempt (tax-free).
On a more holistic financial planning perspective, I am recommending a Single Premium VUL over investing in Mutual Funds and UITF. The only barrier to entry in using a Single Pay VUL is its price point – you’ll be needing a much higher initial investment compared to a Mutual Fund wherein you could start with just P5,000.
What if the market declined at an instance I am withdrawing the whole investment is the minimum guarantee still applicable? The minimum guarantee pertains to Death Benefit – this is the unique proposition of a Single Pay VUL. When the market declines, a Single Pay VUL will behave similarly like a Mutual Fund and UITF. I think you should mention in your article that this applies ONLY to Sunlife VUL and Mutual Funds. You should be transparent as MAJORITY OF THE UITFs in the country have NO BACKEND FEES and or FRONT END FEES. They are both pooled funds, on similar prospectus (say peso equity fund) they are both invested in the local stock market, and they are both managed by fund managers. The effect of the difference in charges, I think my response to Carvi above (or below) would explain it in a more factual way. Perhaps as to MF, only Sun Life implements backend fees, but as to VUL funds, I believe Insular, Philam and other big players share the same charging scheme.
Given the illustration, everything held equal, say an index fund (just like you mentioned), fund values of a UITF (with no sales load) will closely be similar to that of a Mutual Fund (with 0% backend fee at 10th year). And they are completely different, assets under UITFs are required to be under 3rd party custody, thus they have potentially different (if not higher) fee structures than Mutual Fundss who just normally charge management fees and auditor fees.
Now, the comparison of a traditional insurance to Single Pay VUL is way out of the context. Now, for the argument whether the investor dies or not, saying they (we) won’t in any specific timeframe is not for us to say. With index investing, you invest in a mutual fund or ETF that mimics a commercial index representing a particular part of the stock or bond market.
In summary, there are many benefits to index fund investing including great diversification, low costs, tax efficiency, and the ability to better manage risk within a well diversified investment portfolio. Although better than using actively managed mutual funds, I believe the problems with index funds can outweigh the benefits in many situations.
Katherine Fonville is the President of Fonville Wealth Management, LLC., a Registered Investment Advisory firm located in Richmond, Va. This article is for informational purposes only and should not be construed as specific investment advice tailored to an investor’s unique needs, risk tolerance, and investment objectives.
Fonville Wealth Management is an independent investment advisor and fee-only financial planner in Richmond, Va.
We look forward to earning your trust and the opportunity to be your financial advisor in Richmond, Va. Parents or legal guardians of a girl child can open the account in the name of the girl anytime after her birth till she attains an age of 10 years. Investments can be made till completion of fourteen years from the date of opening of the account.
The details of the transactions in the account will be updated in a passbook given by the post office or the bank where the account is maintained.
The sukanya samriddhi yojana account will mature after 21 years from the date of opening of the account. If the girl gets married before the account is due for maturity, the account will have to be closed. So if the account is opened for a girl 9-10 years of age today, the maturity will be at her age of 30-31 years. If the account holder is suffering from life-threatening diseases for which the funds might be required. Table A shows the possible accumulation if the interest rate continues at 9.1% ( the rate when scheme was announced) Since the rate will be announced every year and might be different for the years to come, another working of the accumulation assuming the rate to be 8% from year two is shown in Table B.
It would feel strange to see equity mutual fund SIP in the comparison table because it belongs to a totally different asset class. We have already seen the kind of accumulation possible in two different interest rate scenarios in Sukanya Samriddhi yojana account. Table D shows a scenario for a similar investment in equity mutual fund assuming a rate of return of 12% per year. Tax Exemption: The biggest benefit of this scheme is that it has a tax exempt status at all stages of investment. Guarantee: Both safeties of your principal and guarantee of the interest payment is the highest level. Interest to be announced every year: (From April 2016, all small savings rates will be announced every quarter)The interest amount, though not fixed guaranteed, will be in line with the general investment scenario. Some years back, many people had invested in schemes like the Rajlaksmi Unit Scheme from UTI which had guaranteed maturity amounts with returns working out to a little more than 16%.
Illiquidity: For parents who will have to stretch their resources to make savings in this scheme this might prove to be tough if their financial situation deteriorates. Sukanya samriddhi yojana is an excellent scheme for the girl child, both socially and from an investment point of view. On the social side of things, we must encourage people in our community support structure to take benefit of this sukanya samriddhi yojana scheme. Parents with little boys would be wishing that they had this opportunity for their sons too!
Review of Sukanya Samriddhi Yojana is done by Kiran Telang, a SEBI Registered Investment adviser.


If you have any question on Sukanya samriddhi yojana account or any other investment product, please feel free to ask in the comments section below.  Would also love to you see your views about this new yojana .
Recently I have visited my nearby post office and form there I found that Post offices with savings account opening facility can open a Sukanya Samriddhi Account. Definitely a great scheme as the purpose is to accumulate money for the girl child education and marriage. Though wanted to clarify if the scheme is for total 21years or till the child is 21years of age?? Most of us know about SIP or systematic investment plan to invest in mutual funds, and other financial instruments.
Here is a solution if retail traders have invested in stocks at higher rate and who have stopped trading and waiting for price to recover and exit at cost rate or marginal profit. Your post are very interesting and thoughtful, I never knew this type of strategy to make money in trading. Under this startegy of the previous one which you mention to short put and buy good setyock more cheaper. But my question is that if we short reliance (or any other stock) put 96 at 10 and if reliance comes 900 at the end of the month then we have to buy reliance at 900 .ok.
All trades, patterns, charts, systems, etc., discussed in this website or advertisement are for illustrative purposes only and not construed as specific advisory recommendations. Data and information is provided for informational purposes only, and is not intended for trading purposes.
A mutual fund pools money from hundreds and thousands of investors to construct a portfolio of stocks, bonds, real estate or other securities, according to its charter.
Companies add on these expenses to cover their expenses and to make profit of course so watch out for these. If you find your fund to be losing a little here and there don’t be so quick to dump it. If a fund owns dividend-paying stocks, or if a fund manager sells some big winners, shareholders will owe their share of Uncle Sam’s bill. You want to have a very good understanding of how all the fees work and review their prospectus. Each fund has a defined investment objective that determines the overall management of the fund and the types of investments that can be held in it. The chart below shows money market funds are the least risky and generally have the lowest returns. Offering stability and minimal risk, money market funds deliver returns in the form of regular monthly distributions that are typically better than those of a traditional bank account. The portfolio manager adjusts the asset mix based on the objective of the fund and their view of the economy.
These companies range in size from large to small, or both, and can be located in Canada only, the United States only, other specific countries or all countries.
Rather than having to research every investment before deciding to buy or sell, you have a professional money manager there to manage it for you. With offices in Canada, the United States, Europe and Asia, our investment management teams are equipped to provide clients with the best investment opportunities available in the world. Because mutual funds invest in a variety of equities, bonds and other holdings, investors can create a balanced and diversified investment portfolio with a relatively modest amount of money. Regardless of which investment you choose, it is important to understand the costs involved and how those costs affect your investment. Over time, minimizing costs can have a significant and positive impact on the growth of your portfolio.
Mutual fund companies deduct the sales charge from the amount you invest and pay it to your dealer.
Instead, the fund company pays a commission to your advisor’s firm at the time of purchase. For more information on costs associated with mutual funds, review our fact sheet Understanding the Cost of Mutual Fund Investing or talk to your advisor.
You were brought to several options, and you have ended up choosing between a Single Premium VUL, a Mutual Fund, or a UITF.
In investing in either of the three, you will be asked whether you’ll want to invest your money in an Equity Fund, a Bond Fund, or a Balanced Fund. Both funds, Mutual Fund and Single Premium VUL, uses a backend fee system of 5%, diminishing by 1% yearly (If investment is redeemed in the first year, charge is 5%, if on second year, 4%, and so on and so forth.
Mutual Funds are very flexible that you can withdraw your investment anytime without being bounded by holding period. Thus, the minuscule difference of P6,885.23 is really very immaterial compared to the benefits it could provide to the investor (or beneficiaries of investors).
Minimum Death Benefit. The death benefit for a Single Premium VUL is then higher of 125% of Single Premium or the Fund Value.
Liquidity upon death. While all other assets (investments including Mutual Funds, Stocks, Cash Deposits, and Real Estate) will be frozen by BIR until the appropriate taxes are paid, investment in a Single Premium VUL are readily available to your loved ones.
It is a great tool to use in planning your Estate while having the ability to enjoy your investments while the investor is still alive, contrary to other insurance products wherein the benefit focuses upon death, including a Regular Pay VUL in it’s infancy years. If you have the funds and are thinking to invest in a managed fund, then go for a Single Premium VUL. There are Mutual funds (mostly TRUST managed Mutual funds)that dont charge back end fees and front end loads. The illustrated 10-year holding of MF above has no sales load (well, it’s a backend that expired on the fifth year).
On top of this, Mutual Funds invested in Bonds can hold to maturity (accruals) thus can retain principal value unlike UITFs that can only be purely marked to market.
MF and UITF, are both pooled funds, managed by a fund manager, and invested on the same market for similar prospectus. Computing the present value, that amount will be P2,654.63 using the same rate of return of 10%.
Note that i mentioned in my 2nd point that theres such a thing as over inurance and if ur looking for investments…go for investments. Saying someone will or will not die is speculation – and the safest assumption is to prepare for the worst.
While index investing is preferable to active management, and has many benefits, index funds are designed to provide the returns of a particular index, not to enhance returns. If an underlying security migrates to a different asset class (the company grows substantially bigger, for example) it won’t be removed from the index or fund until its annual review. Managers are not free to select the stocks or bonds that best represent the segment of the market. The biggest problem with index funds is that they are created to match the returns of a specific benchmark, instead of beating the benchmark return. She is a fee-only financial planner and investment advisor helping successful individuals and families with comprehensive wealth management needs. We have a legal fiduciary responsibility to provide investment advice that serves your interests before our own.
They have launched a slew of measures for the girl child under the name ‘Beti Bachao Beti Padhao’. Though this option is provided, it will be better to avoid it, to be able to have a sizeable corpus for your daughter’s higher education or marriage.
The tax-exempt status has been announced in the budget of 28 February 2015, which was later approved by both houses of the Parliament.
The girl will have to give an affidavit that she is above eighteen years of age if she is closing the account before maturity for this reason.
She can close the account if she gets married before this age or continues it for the full duration. An amount equal to 50% of the balance at the end of the preceding financial year will be allowed to be withdrawn. So we see that a good accumulation of Rs.60-80 lakhs is possible until maturity under this scheme.
The reason for putting that in this table is that equity mutual funds are a great source to build wealth for long-term goals, education, and marriage of children being amongst them. Table C below shows the possible accumulation in PPF account assuming an interest rate of 8% over the tenure (current rate is 8.7% and changes every quarter). In equity investments, there is no guarantee on the rate of return and returns do not follow a linear pattern, they tend to be lumpy.
In any investment, we have to ideally look at the expected returns post-tax to be able to comment on its suitability for our goals.
This is a safety in itself because it will ensure that sukanya samriddhi yojana scheme sustains over different interest rate scenarios. As the interest rates started tending down the scheme it was not possible to fulfil the promise of such high-interest rates. So if you want to send your daughter abroad for studies, this in itself will not be sufficient to meet the requirement.
This probably is from the social perspective where there is an attempt to protect little girls who might otherwise be married off early and will not have a chance at pursuing higher studies. Although there could be other options, I believe for them there is no motive of investment. Now if kid’s age is 10 year old then maturity period will be 31 years, but if she got married before that but after 18 years of age, account will be matured automatically.
Do you advise if someone has 2-3 lakh of saving window available every year, then one should do in these 2 accounts only. As you very well know such investment works only when the price of assets in which one has invested increases and thereafter gets profit on selling those assets like stocks, gold, etc. Divide your investment portion into blue-chip stocks and gold ETFs as gold and stocks go almost vice-versa, now as stocks are finding their bottom, gold is touching its yearly high.
Narendar’s investment experience spans over 8 years during several Bull and Bear market cycles. One important feature of a successful trader is to understand, what in the real world, it takes to earn a rupee. He has also completed NSE’s Certification in Financial Markets (Options Trading Strategies Module).


Just in case, if Reliance goes to 900 and give us an opportunity we buy that stock and at 900 and sell covered call every month at higher strike price, example 1100 call or 1200 whichever is least possible and therefore you will get the premium of those call as you are selling those calls. All ideas and materials presented herein are for information and educational purposes only. Neither marketcalls.in website nor any of its promoters shall be liable for any errors or delays in the content, or for any actions taken in reliance thereon. They don’t charge more a few percentage points a year, expenses may not sound substantial, but they create a serious drag on performance over time. Although you may be tempted to sell a losing fund, check to see its previous behaviors and see if whether it has trailed comparable funds for more than two years. Tax-efficient funds avoid rapid trading (and high short-term capital gains taxes) and match winning trades with losing trades.
When you invest in a mutual fund, you purchase units in the fund, where each unit represents a share of the fund’s value. While equity funds are usually the most risky but tend to have the highest potential returns. Investors looking to meet short-term goals or access funds in case of emergency often choose money market funds as an investment solution.
Equity funds may also focus on companies in certain sectors such as energy, gold or financials. RBC Global Asset Management has an experienced team of portfolio managers from diverse backgrounds with varying expertise and skills. However, if you redeem your mutual fund earlier than the prescribed time limit, you will pay a redemption fee to the fund company. Single Premium VULs are offered by insurance companies, thus, are regulated by the Insurance Commission (IC). You are inclined to investing in an Equity Fund, you’re just not quite sure whether to choose a Mutual Fund (or UITF) or a Single Premium VUL.
In our illustration, it is the higher of P625,000 (P500,000 x 125%) or the current Fund Value of the investment. This forces investors to leave returns on the table through inefficient trading strategies.
There are special risk considerations associated with value strategy investing, international investing (including emerging markets), and small company investing. As a fee-only financial advisor, our compensation is straightforward and easy to understand.
As a part of encouragement for the girl child, the government has launched the Sukanya Samriddhi Yojana.
The interest received is tax-free and upon maturity, you will be able to withdraw the amount tax-free. If the account is not closed on completion of 21 years from Date of account opening, it will continue to earn the rate of interest that is announced by the government every quarter till its closure. Though equity mutual funds may be perceived as risky, in reality, they are more volatile than risky and have shown to perform very well over long durations. Since PPF allows extension in a slab of 5 years, we have stopped the calculation at 20 years. A fixed deposit of 10% will mean only a yield of 7% to someone who is in the highest tax bracket. Many people are tempted to pull out amounts from investment accounts to cater to various wants which might seem very urgent at those particular points.
If the debt component of your asset allocation permits and you have the capacity to invest, full amount should be invested in this scheme for the complete duration of the scheme. And again for banks also only few special branches of every bank in a city will be facilitate in future to open this account. But a long way to go and more features need to be added to make this scheme a real success for the betterment of women-hood in our country. Some stocks are now trading below cost price, I plan to use options for MIP, kindly guide me on the same. You will repeat this every month and can earn profit every month even if price of reliance stays at 900 for several months. Risk capital is money that can be lost without jeopardizing ones financial security or lifestyle.
ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS SUCH AS LIQUIDITY. No system or trading methodology has ever been developed that can guarantee profits or prevent losses. Plus, the convenience that beneficiaries can get the money easily, without the prerequisite of paying the estate taxes first.
As the reconstitution chart shows, the end result is that the index manager must typically pay a high price due to the temporary run up in price between the announcement and when it is actually added. For example, many investors are familiar with the Russell 2000 index which represents many small companies across the United States. Consider the investment objectives, risks, and expenses of any mutual fund carefully before investing. Apart from the social benefits that this scheme aims to bring, it is an excellent scheme from an investment perspective. All girls who have turned ten, one year before notification of the scheme are also eligible to get an account under this scheme. Apart from the rate, the yearly compounding nature will help create a good corpus upon maturity.
Schemes like Sukanya Samriddhi and PPF have their own place in the creation of the portfolio for goals, but they should be looked as a part of your portfolio composition and should not be relied upon entirely to fund your goals as they have their own restriction in terms of investment amounts and tenure. You must watch out for big dips in interest rates or any negative changes on the taxation front to decide to invest further amounts in this scheme. The lock-in structure of this product will ensure that they provide for their daughters as they grow up. Volatility has become a way of life in stock market.  Even best predictions or speculation fail to work in this kind of extreme uncertain volatile market condition. Using appropriate options strategy, these investments(gold ETF and stocks) as margin one can make consistent profit every month using covered call and can get 60 to 100% return in one year by using a combination of gold ETFs, blue-chip stocks and options. Please do contact me if you still require any further clarification on the same, I will be glad to assist you.
Only consider risk capital that should be used for trading and only those with sufficient risk capital should consider trading.
SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. The testimonials and examples used herein are exceptional results which do not apply to average people and are not intended to represent or guarantee that anyone will achieve the same or similar results. There are many websites with very useful information and here are some that are updated pretty frequently. RBC Funds and PH&N Funds suitable for short-term investing (such as money market funds) are excluded from this charge.
Additionally, index funds have no flexibility to exclude or postpone a trade if the pricing is not favorable.
This means that an investor will not have pure exposure to large companies for that particular part of their investment portfolio. One may believe that by purchasing an index fund that replicates the Russell 2000, you are receiving complete exposure to US small companies. Dimensional Fund Advisors (DFA) overcomes the trading disadvantages of indexing through their asset class investing approach (See: The Advantages to Asset Class Investing).
For additional information about Dimensional Funds, please read their respective prospectuses carefully before investing. Let us evaluate the Sukanya Samriddhi Yojana scheme from an investment viewpoint- what this scheme has to offer and how it stands in comparison to other similar schemes. In such a case Sukanya Samriddhi Scheme account becomes an excellent option to invest additionally if the child is a girl. A very low-interest rate or the scheme being made taxable would mean that you should look at reducing investment in this scheme. For instance, almost all world indices went down badly after the news of Greece crisis and later upon the news of bailout indices began to bounce back, now the indices is moving down again due to financial the problem in Europe.
In case, if you do not hold any blue-chip stocks, please use options to buy them at cheap rate. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN. Trades placed on the reliance of Trend Methods systems are taken at your own risk for your own account. This information does not represent a recommendation of any particular security, strategy or investment product.
Technical analysis can predict stocks or indices direction to certain extent but they too have their own limitations, ultimately Mr.
In fact, the Russell 2000 fails to capture the returns of many small companies that are not included in the index. Fonville Wealth Management is an investment advisor registered with the the Virginia State Corporation Commission. Market is the unbeatable king, who has always throws surprise to the little retail investor. Information contained herein has been obtained from sources believed to be reliable, but is not guaranteed.
Past performance is not indicative of future results and no representation is made that stated results will be replicated.



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