7 habits to achieve financial success

While these habits definitely apply to the general areas of life they can be actively used in our financial life to achieve success.

Habit 1: Be proactive

Financial success is not a matter of chance. It has to be planned out and acted upon. Being proactive means taking control of your life and responsibility for everything that goes right... or wrong. Be prepared for any emergency by having an emergency fund in place.

Research an investment before putting in any money; do not depend on "hot tips" from neighbours and friends.

Habit 2: Begin with end in mind

Financial goal setting is one of the pillars of financial success. Any financial advisor worth his name will start with helping the investor set short term and long term goals. With the goals in sight the path is easier and smoother.

Habit 3: Put first things first

Prioritise. Be it expenses or investment, it is essential to prioritise. All resources are limited and prioritising helps in optimising the use of your income and investing smartly. It is a natural progression to goal setting. Once the goals are clear then it is easy to allot resources. For instance, if saving up for a holiday is a short term goal, you may prioritise your spending and avoid some non-essential spending for next few months.

The author is a credit expert with 10 years of experience in personal finance and consumer banking industry and another 7 years in credit bureau sector. Rajiv was instrumental in setting up India's first credit bureau, Credit Information Bureau (India) Limited (CIBIL). He has also worked with Citibank, Canara Bank, HDFC Bank, IDBI Bank and Experian in various capacities.

Read, then invest:: Business Line

Fund Basics

Before making an investment, investors are urged to read the details available in the Scheme Information Document and Statement of Additional Information.

These details are presented in a summarised manner in the Key Information Memorandum (KIM), which comes along with the application form.

It is an abridged version of the Scheme Documents and contains several important facts which an investor should know before investing.

SCHEME-SPECIFIC INFORMATION

KIM gives information on the asset allocation pattern and investment strategy, i.e. the types of instruments, such as equity, etc. and the percentage allocation to each type. Investors should know how their funds will be invested.

COMPARISON BENCHMARK

The benchmark may be the Sensex or the Nifty and the performance of the scheme will be measured against the benchmark.

PLANS AND OPTIONS

Under Dividend, options to reinvest or payout may be available. Default scheme options are also mentioned. Special options, such as a Dividend Sweep or Trigger facilities, if available, are explained.

Along with this, the minimum application amounts under each Plan and Option are mentioned separately. Sometimes, investors’ applications may not be processed due to an error in filling up the basic minimum amount.

LOAD STRUCTURE

The charges made by the fund managers to the investors to cover certain expenses are called ‘load’.

These can be charged at the time of purchase or exit. ‘Entry load’, which is currently not charged by funds, is the load charged when you invest in a scheme.

‘Exit load’ is the load charged when investors redeem units. Investors would know if any exit load would be charged for redemption within a particular time period.

RECURRING EXPENSES

This is very important information for investors. Each mutual fund scheme reports an ‘expense ratio’. This signifies the proportion of recurring expenses that a fund charges to its schemes’ assets under management (AUM) year after year.

This includes fund management fee, administrative costs, marketing and distribution costs incurred by the fund house.

The expense ratio varies across fund houses and schemes. However, the Regulator has capped the expense ratio and this cap decreases as the AUM increases in slabs.

As and when new regulations and guidelines are issued in this regard, investors can get details of how much the fund would charge.

This is also known as the Total Expenses Ratio.

PERFORMANCE

The KIM gives a snapshot of the actual performance of the scheme over various periods and the same would be compared with the benchmark.

COMMON INFORMATION

Along with scheme-specific information, the KIM contains general information for investors — risk factors associated with investments, detailing risks associated with equity, fixed income instruments and derivatives. Scheme-specific risks are also mentioned.

NAV APPLICABILITY

Rules regarding the applicability of NAV are explained along with cut-off timings for transactions.

Contact details for investor enquiries, grievances, details of Official Points of Acceptance of forms are also detailed in the KIM and common application form.

FILLING THE FORM

Exhaustive and detailed instructions are given to ensure correct filling of the application form.

These are especially useful for first-time investors. Explanation is given regarding mandatory requirements and even for the actual filling of the mandatory fields in the application form as well as attachments to be provided with the application.

(Contributed by CAMS Viveka, an Investor Education Initiative from CAMS. Views expressed are general practices in the MF industry and may vary on a case-to-case basis.)

Technicals: Coromandel, Bharti Airtel, Hyderabad Ind, GSPL, Wipro, Voltas :: Business Line

 

29th Sept: technicals- Reliance Industries, SBI, Infosys, Tata Steel :: Business Line

Sizzling Stocks - Allcargo, ABG Shipyard:: Business Line

Gold (Rs 30,726) :: Business Line

After trading in a narrow range for most part of the week, the MCX Gold contract saw a sharp 2.8 per cent rally on Friday to close at Rs 30,726, up by 2.7 per cent for the week. The contract has been consolidating sideways between Rs 29,270 and Rs 30,850 since its sharp fall from the September high of Rs 34,549. If the contract holds above Rs 29,500 there are good chances to see a corrective rally to Rs 32,500 in the near-term. The 21-day moving average is at Rs 30,770 and Rs 31,500 are the immediate resistances ahead. On the downside Rs 28,500 is a significant support below Rs 29,500.

For the medium-term, we can expect the contract to be broadly ranged between its crucial support at Rs 28,500 and resistance at Rs 32,500. The bias could turn bearish if the contract falls below Rs 28,500 and it can further decline to Rs 25,000-24,500 in the medium-term.

Silver (Rs 49,680)

The MCX Silver contract was ranged between Rs 48,190 and Rs 50,215 and closed higher by 2.1 per cent for the week. Immediate resistance is at Rs 50,000 and then the 21-day moving average resistance is at Rs 51,369. But since the support at Rs 48,500 is holding very well and is limiting the downside over the last couple of weeks, the near-term outlook is positive. Therefore, the contract can break the above mentioned resistances and rise to Rs 51,500-52,000.

However, the medium-term outlook is bearish for the silver contract with strong resistances at Rs 52,000 and then the 21-month moving average resistance near Rs 53,500. These resistances can cap the upside and the contract can fall to Rs 45,500-44,500 initially. An eventual break below Rs 44,500 can drag it further lower to Rs 41,500.

Copper (Rs 470)

The MCX Copper contract has been trading range-bound between Rs 450 and Rs 470 for the second consecutive week. A breakout on either side of this range will decide the contract’s near-term direction. A decisive break above the neckline resistance at Rs 470 will negate the double-top formed on the daily candle sticks chart and will take the contract higher to Rs 490-500. On the other hand, if the contract fails to break decisively above Rs 470, it can come down again to Rs 450. An eventual break below Rs 450 can take it further lower to Rs 430, the target of double-top pattern.

For the medium-term, Rs 510 is a strong resistance and rallies to this resistance can attract fresh sellers coming into the contract. As such, the medium-term outlook will be bearish for a fall to Rs 420-400 while the contract remains below Rs 510.

Crude Oil (Rs 6,533)

As mentioned in the previous column, the MCX Crude Oil contract has bounced back from its Rs 6,400-6,300 support zone, registering an intra-week low at Rs 6,370. However, immediate resistance is at Rs 6,650-6,700 band which needs to be broken for the contract to rise higher to Rs 6,900. Failure to rise above Rs 6,700 in the coming week will then leave room for one more leg of down move in the near-term that can target Rs 6,300. Medium-term outlook is bullish for the Crude Oil contract as Rs 6,300 is a very strong trend-line support which might not be broken easily. As such, the rise from this support at Rs 6,300 will have the potential to take the contract upwards to Rs 7,000 and even Rs 7,500 levels in the coming months.

Investment Focus - Tata Motors DVR: Buy :: Business Line

29 Sept: Investment Alerts :: Business Line

The RBI is asking banks to stop offering zero-interest EMI schemes on outstanding amounts on credit cards.

E-Series redemption

Do you hold units in NSEL’s E-Series gold and silver units, and despair of receiving the underlying asset? Investors can now redeem their units for cash instead of physical delivery. This redemption can be taken up from October 3 to 9 or on extinction of units, if that falls earlier. The price at which the settlement will be done depends, of course, on the prevailing price that day. The prices will be put up on the exchange’s web site. Surrender requests already put in, but not processed, would be cancelled. Settlement in cash can then be opted for. Redemption requests which have been processed will receive physical gold or silver.

Tweaking consumer financing

Financing schemes for consumer durables have come under the Reserve Bank’s scanner. In this regard, there have been several changes made. For one, say there are promotional schemes on products — a discount, a moratorium on payment and so on — banks have to pass on these benefits directly, instead of lowering the applicable interest rate to reflect the benefit.

Another key development is the RBI asking banks to stop offering zero-interest EMI schemes on outstanding amounts on credit cards. That could make you think twice about buying that shiny new plasma television!

The RBI has also disallowed shops or other establishments from charging an additional fee — usually a percentage of the transaction value — for payments made through debit cards. And finally, zero-interest EMI schemes on outstanding amounts on credit cards cannot be allowed.

All at one go

Running multiple systemic investment plans in L&T Mutual Fund? The fund house just made it a little easier for you to make these investments. It now allows combining monthly SIPs for three funds, making a single payment instead of three separate ones. This will certainly come in useful for those making payments through cheques — they can issue one cheque for all three SIPs. For new applications too, SIPs for three schemes can be done in a single form, and not separate ones for each SIP. This facility is allowed for all open-ended schemes offered by the fund house except for its Tax Saver Fund.

Not mandatory

If you haven’t got your Aadhaar card yet, there is some comfort in recent developments. Securing Aadhaar cards is optional, and not mandatory for citizens. The clarification came from the issuing agency, following pleas against decisions of some States to make the card compulsory for purposes such as registration of marriages.

Stock market happenings

SEBI last week approved a promoter group of Gillette India to reclassify their holding as non-promoter to comply with minimum shareholding norms. With this, the promoter holding drops to 75.09 per cent, which will be brought down to the requisite 75 per cent. Shares of the company shot up 10 per cent in the wake of the approval, but ended the week up 6 per cent.

Another important development unfolded in Financial Technologies. Auditors Deloitte Haskins and Sells have said that the financial statements for 2013 that they have already signed, cannot be ‘relied upon’. The stock has lost 13 per cent for the week.

The General Anti-Avoidance rules were also notified last week, which could cheer up the FII contingent. FIIs who haven’t taken benefits from tax treaties entered into by India, and investments in participatory notes will not be covered by the GAAR rules. Officials also have to give a show-cause notice to invoke the provisions. The rules will come into effect from April 2016.