Portfolio structuring can help you be profitable even in a bear market!

Posted on August 31, 2017Categories Short term programmes   Leave a comment on Portfolio structuring can help you be profitable even in a bear market!

In the words of the great investment guru Benjamin Graham, investing is more about emotional discipline and less about intelligence. Good investing is all about identifying the good stocks by knowing and locating their strong fundamentals. A good stock will be good in a bull and a bear market as its fundamentals are strong. When a company’s fundamentals are not strong, it points to the company losing money and not doing well overall.

However, the reasons for the entire stock market to go up or down can be many and are usually not related to the performance of a company. People usually start selling their stocks when the prices fall in order to cut their losses and buy when it starts gaining value in order to make a profit. However, a good investor will always focus on the fundamentals and buy a stock considering that. This is why restructuring your portfolio matters during times of great market swings.

Your financial advisor may have set a certain target for acquiring certain stocks at certain prices, but please note that you must make decisions on the strength of the performance of the company and its underlying principles. Thus, the right price to buy may change every year, quarter, month or even on any given day due to a certain event.

The fundamentals of a company depend a lot on many internal factors such as technology, management, human resources, products, etc., but they also depend largely on external factors like climate conditions, availability of raw materials, political conditions, war etc. These external factors can change at any time and at any moment and these will impact the fundamentals of a company very very easily.

Every time the market fluctuates, you need to take note of which stock has become too expensive or too cheap. Assess accordingly and you may pick up stocks at a cheaper rate and see their value zoom up. Ideally, bull and bear runs are all about emotions and enthusiasm of investors. When they feel that the market is sliding, they start exiting in the hope of making quick money and that is when an intelligent investor must enter and pick up these cheap stocks.

By having fluidity in your portfolio and buying stocks when the markets are down, you are ensuring the best return on investment on your money. This is a good strategy that is possible only when you are in touch with the equity markets on a daily basis. You need to study the markets, industries and companies on a daily basis in order to understand the nitty gritty and the fundamentals.

BSE Institute Ltd (BIL) offers a short term course on managing portfolios and day trading for businesses, company executives, housewives and students.

Other important aspects to keep in mind is the general health of the economy, global scenarios, international trade, climatic conditions, other investment options that may give better returns, etc. As a thumb rule, one should have a few indicators that they track on a daily basis in order to be sure of the returns that they will get. Despite doing all this, investors still go wrong and you may make losses. However, your focus should always be on developing a system that gives you a sustinable and a respectable rate of return.

 

Why are Mutual Funds better for financial planning?

Posted on August 30, 2017Categories Short term programmes   Leave a comment on Why are Mutual Funds better for financial planning?

The only thing that anyone thinks about when earning money is to save it. This is to ensure that he has enough when he retires, enough for his children to study and get married, etc. However, what most don’t realize is that the money that they save earns a paltry 4-5% and it loses value every single day. What a Rs 100 will buy today, will surely be less than what it was a year ago. Thus, the value of your money reduces every day. The rate of inflation keeps increasing day by day and hence, it is not enough that you save money – you need to multiply your money.

There are many ways to do so. The stock market, debt markets, bonds, insurance, etc. However, Mutual fund schemes are the ones which offer the best returns. This is because you are betting on not one company to do well, but on a host of companies. When you invest in a mutual fund, you are investing in companies that have a certain common background. This could be their industry, according to their customers, their target market, etc. You are basically betting on this common factor to do well and help these companies to perform better.

This is considered a good investment strategy as you are betting on a host of companies and not just one company. The shares of some companies may give you a lot of returns, over 100% in some cases, but that is due to the high amount of risk that is taken by you as an investor. The same share may also be devalued by a 100%. Therefore, in the event of one company not performing well, you can still be assured of your money multiplying in the stipulated period of time. Mutual funds are known to give investors a return of over 30 – 40% over a long period of time.

So, in a sense, Mutual Fund investments are as good as stock market investments, but safer. Mutual funds are a safe bet when investors have a low risk appetite. Mutual Funds are known to give consistent returns over a period of time. Mutual Fund houses have Fund Managers who manage the total amount of funds that investors have lent them. The Fund Managers are the ones who do the industry research, do a deep dive analysis of all the companies and their board of directors that they invest in. The Fund Manager’s compensation is directly related to the fund’s performance. The major component of the Fund Manager’s salary is the bonus that is dependent on the growth of the Mutual Fund. It may be based on the percentage growth achieved or on the value of each asset or unit.

Learning about Mutual Funds is somewhat like the equity market. One has to first be comfortable with the multiple industries & companies in order to invest and multiply their funds. Networking is very useful and critical in this industry. Doing a professional course is very very useful! BSE Institute Ltd (BIL) offers a detailed course for salaried professionals and other investors to understand the intricate details of this industry.

Mutual Funds are also subject to bull and bear markets, but a clear understanding of the industry and its influencing factors is sure to keep your money safe and strong.

Here’s how GST can help you increase your sales

Posted on August 29, 2017Categories Short term programmes   Leave a comment on Here’s how GST can help you increase your sales

The Goods and Service Tax promises to be the one most discussed topic for the next 12 months. This is because we all have been hearing about its implementation, but few of us knew what it meant for us and for the country’s economy. The GST act was meant to reform the country’s tax regime and it is doing so in a major way. It is making it difficult for tax evaders and illegal business operators and smugglers to operate.

Before the implementation of GST, every business entity had to pay a tax depending on the kind of product/ service that they were selling/ offering and the state that they are operating out of. An organization may have to pay VAT, Sales Tax, Central Sales Tax, Luxury Tax, Service Tax, Entertainment Tax, etc depending on the business activity that they do. Now, all these taxes have been abolished and it’s only a GST tax that has to be paid by the business. All the taxes levied are indirect in nature, .i.e. they are levied at every level in the business chain, but they are finally paid by the end consumer. Due to the long and cumbersome process, a lot of goods were becoming extremely expensive and some traders and businessmen would avoid paying these taxes and this would result in a revenue loss for the Govt and their products would be cheaper than other tax paid goods.

This would result in many honest tax paying businesses losing out to other businessmen who would not pay their taxes. This was a double whammy for the Govt as they would be cheated out of their taxes and honest businesses would be less likely to pay their taxes. Now the GST tax is based on the principle of destination, i.e. it shall be collected at the point of sale. The tax is levied on wholesale agent when he buys from a manufacturer, on the retailer when he buys from the wholesale agent & paid by the consumer when he buys from the retailer. Each and every transaction that a business has, has to be explained to the authorities. Each and every transaction thus will be scrutinized and thus, if anything is amiss, these businesses will be penalized. The penalty is significant and thus it has currently put a stop to the activities of all such businessmen.

BSE Institute Ltd (BIL) is a subsidiary of the Bombay Stock Exchange that offers multiple short term and long term courses that help entrepreneurs and executives excel at their organizations. BIL takes full advantage of being at the centre of India’s financial district and was one of the first institute to offer a GST training course that certifies participants and helps any business transition smoothly from the old tax regime to GST.

Before registering your business under the new GST regime, questions are asked about the previous business dealings of the business dealings. Tax evading businesses are now afraid to approach the authorities as they will be penalized for their illegal activities. This has put a temporary stop to all the business that they used to do. Thus, this has resulted in all their customers moving to all the people who have a clean honest business.

Thus, by aligning your business as per the rules of the country, you only have to gain. Another advantage of the GST is that there will be no double taxation, thus reducing the prices of products which may be overpriced due to the taxes. Also, an individual or a business cannot claim tax credits currently, but the GST bill makes a provision for this in order to avoid double taxation.

GST is still in its early days and many say that it may be difficult to implement in a large country like India. However, its benefits outweigh its negatives by a wide margin and any policy that makes business easy and lowers the prices of goods and services is bound to be a smashing hit.

 

The Australian down under is perfect to help your career do wonders!!

Posted on August 27, 2017Categories Short term programmes   Leave a comment on The Australian down under is perfect to help your career do wonders!!

With the advent of globalization, global markets are becoming closer by the day. Every major economy is in a fight on a daily basis to come out on top of the others and earn the maximum amount of foreign exchange. The fight is on attracting the maximum amount of foreign investment, attracting more businesses to open factories and corporate offices and to become major global trading and export hub. The bigger fight is about attracting the best talent in the world and being recognized as a major global education hub. A business can build its offices in a country only when they are confident about getting the best talent that can compete with the global talent. A lot of time and money is thus invested by a country in making it a major educational hub.

Australia is poised for tremendous growth. It has offices of all the major global MNCs from all industries like Banking, Finance, Insurance, FMCG, Hospitality, etc. It is well connected to all the major economies of the World and its capital markets are in sync with all the major financial hubs of the World, thus making it an attractive destination for investing in the local economy. However, Australia faces a problem of having insufficient numbers of talented individuals and professionals. This is true especially for the Finance stream where majority of the MNCs prefer to hire MBAs who are conversant in reading financial reports, balance sheets and any other document that helps them to make a sound financial decision and earn great dividends.

Australia has many advantages. It is positioned strategically in the southern hemisphere. It is close to major markets like India, China and all of South East Asia. It has the Americas to its east, thus making it aptly positioned for being a major manufacturing hub. it can easily send its shipments to any part of the world from here. It has a lot of land that allows them to focus exclusively on manufacturing. This and the availability of major natural resources and a mechanized economy makes it a sought after destination for manufacturers hoping to cut down on manufacturing costs.

This makes Australia need a huge number of skilled professionals who can manage various aspects of the businesses that operate there. This is true specifically for MNCs that have their divisions based there and have to be compliant with all the policies of the various OECD countries that it operates in. This makes highly skilled Finance professionals with an MBA indispensable.

BSE Institute Ltd (BIL) and the University of Western Sydney jointly offer one of the most sought after financial course’s of Australia. It is a 2 year course that is recognized not just by Universities across the World, but also by industry bodies such as the Australian Stock Brokers Association. Students completing the course have a track record of bagging a job where the average salary of each professional is AUD $50,000 per annum. Students who are not placed immediately get a 2 year work search visa that allows them to look for a job for 2 years. This is considered to be the best solution for all students who aim to migrate to Australia.

Another advantage of working in Australia is that its economy is at par with any developed economy like the US, UK or the EU and the experience earned here is considered to be as good as working in any of these developed economies. The educational qualifications earned here are well respected and accepted all over the globe. The major advantage for anyone living and working in Australia is the great foreign exchange advantage. The Australian Dollar is almost as strong as the USD and this helps us when remitting money back home. Another advantage is that it is very very close to India, thus not making moving to & fro from there is not a very expensive affair like going to the US or the EU.

Australia is considered to be one of the best places to emigrate and build a career and raise your family. However, be sure to get all the details and choose the right course that gets you a job to fulfill your dreams.

 

 

Failing to plan is planning to fail!

Posted on August 26, 2017Categories Short term programmes   Leave a comment on Failing to plan is planning to fail!

In all walks of life – failing to plan is planning to fail! When it comes to your finances, a failure to plan may result in you running out of money even before you achieve the targets that you have set for yourself and your family. These could be for your children (education, wedding, etc), for your spouse (vacations), for your business, for your personal satisfaction (car, house, etc.) or for your retirement. Failing to allocate appropriate resources for all of them may result in you having to borrow heavily or may result in you shelving that plan altogether. However, this cannot be done in case of important things like your home, child’s education/ wedding or your retirement. Thus, allocating adequate funds for all of them is very very important. By allocation, we mean that you must invest your funds in the right places to ensure that the money keeps multiplying, while you keep investing at regular intervals.

Financial planning is all about investing in the right places. This includes the equity markets, bond markets, debt markets, insurance schemes, mutual funds, fixed deposits, gold and a host of other investments that people usually invest in. However, the most important aspect in all of these is to be able to understand and identify the best investments for yourself, to identify the investments that will multiply your money the most. How does one do this activity in order to benefit the most?

Another aspect that any investor has to be careful about is the capital gains tax. Most investments are subject to a capital gains tax, .i.e. a tax on the earned value of the investment. This tax on shares is at 20%!! That is a lot of money. Hence, it is important to seek out an appropriate investment that can help you save taxes, as there are several investments that are tax free.

It is hence, very important to take an expert professional’s view on wealth management and financial planning. The advantage is simple – they do this job day in and day out and thus, it allows them to have insights that we don’t have. Networking is also important. Being connected to the right people to know the right investments that allow us to multiply our funds the fastest and paying as little tax as possible is critical. BSE Institute Ltd (BIL) offers multiple short term courses on wealth and financial management. It is a great chance to network and gain a lot of knowledge from industry professionals who conduct the course.

Another important aspect that very few people talk about is estate planning. Estate planning is very very important for every individual. Planning and dividing all your financial assets amongst your children is one thing which must be done effectively in order to avoid any conflict after your death. This is very important mainly for rich people with a high networth (HNIs). HNIs are individuals who have a huge networth and are big business owners. They have significant amounts of investments and are board of directors on several company boards. Any confusion about who inherits those shares and seats on the boards of those companies may put the operations of the company into jeopardy.

Estate planning is very important as sometimes, it is impossible for some assets to be transferred to another person without paying a tax. Knowing how one should plan for this and transfer his wealth is of utmost importance. Sometimes, the Government introduces laws that make it difficult for someone to gift away his/ her wealth to anyone. A person may not be able to take possession of the assets without paying the Govt a wealth tax.

Wealth management can be defined as a service that combines financial and investment advice, accounting and tax services, retirement planning and legal or estate planning. Clients work with a single wealth manager who coordinates input from financial experts and can include coordinating advice from the client’s own attorney, accountants and insurance agent. Some wealth managers also provide banking services and even advice on philanthropic activities.

Wealth management is more than just investment advice, as it can encompass all parts of a person’s financial life. The idea is that rather than trying to integrate pieces of advice and various products from a series of professionals, high net worth individuals benefit from a holistic approach in which a single manager coordinates all the services needed to manage their money and plan for their own or their family’s current and future needs.  A client may receive services from a single designated wealth manager or may have access to members of a specified wealth management team.

Wealth managers are extremely well networked individuals as they are usually employees of a major global bank which gives them an insight into the best deals of the financial world. They are usually highly successful individuals as investors and are some of the smartest investors of the world. Having said this, it is still of utmost importance for an individual to check each and every investment on his own and try and look for good deals. This ensures that you are completely in control of your funds and future.

 

 

Financial Statement Analysis lets you build the foundation of a strong financial empire

Posted on August 25, 2017Categories General   Leave a comment on Financial Statement Analysis lets you build the foundation of a strong financial empire

The one thing that every individual dreads is calculating his finances. We spend our entire lives studying to qualify for a job so that we can earn enough money to lead a comfortable life. However, we don’t spend even a single year trying to earn how we should be investing or planning to invest this money to make ourselves financially secure. Financial statement analysis is considered to be the most basic form of financial education/ knowledge.  Financial statement analysis is a must for any form of investing like equity markets, debentures, bond markets, etc.

Financial Statement Analysis (or money related investigation) is the path of exploring and breaking down an organization’s budgetary explanations to settle on better financial choices. These announcements incorporate the salary statement, balance sheet, cash flow statements, and an announcement of changes in equity. It is a strategy or process including particular methods for assessing performance, financial conditions, performance and evaluation of risk related to future prospects of the organization. It is mainly used to check the health of a business before investing in a company so that one may assess whether his/her investment will be successful or not. It is a technique for deciding the past, present and anticipated operations of an organization. There are a few techniques that are mostly used often for analyzing a company’s future.

It helps investors to find a comparison of different types of financial ratios for a particular time frame, when comparing the company to the company’s competitors and the industry as a whole. These ratios enable investors to quantify liquidity, profitability, cash inflow, outflow and over all income etc. This accounting report is a preview of the organization’s advantages, liabilities and the value of the investors investments. Investors utilize the accounting report to identify patterns in assets and liabilities. It additionally helps investors with net benefit and working benefit. Each of these is partitioned by deals to decide gross profit margin, net profit margin and operating profit. The income statement gives an outline of the organization’s money streams from various activities like operations, investing and financing activities.

It also helps analysts make a report for a certain period of time by comparing different financial ratios. This helps them to find whether the investment will be profitable or not? The balance sheet is a depiction of the organization’s liability, sales and equity of shareholders. Analysts utilize the accounting report to break down patterns in resources and obligations. The salary proclamation starts with deals and finishes with net wage. It likewise furnishes experts with net benefit, working benefit and net benefit. Each of these is isolated by deals to decide net revenue, working overall revenue and net revenue. The income statement gives an outline of the organization’s money streams from working capital, financial and investment activities.

BSE Institute Ltd (BIL) offers a short term course on understanding financial statements for businesses, company executives and accountants.

There are various strategies you can use to perform money related analyses for your businesses, contingent upon what you are keen to understand. Here, are some procedures to use to break down your budgetary articulations:

Trendy analysis enables a company’s financial manager to decide how the firm is probably going to perform after some time. A financial statement analysis helps the financial manager to utilize the balance sheet and income method using percentage to find the whether the investment is going to be profitable or not. Percentage change financial statement analysis helps to figure out development rates for all income statement and balance sheet with respect to a base year. Benchmarking is likewise called industry examination that includes comparing an organization with different organizations of a similar industry to perceive how one organization is getting along as compared with other businesses.

The only way to be successful is to do what you love and love what you do! Passion is an important aspect for being successful at what you do, however, being good at handling your personal finances is now as important as succeeding at a job. Financial analysis ensures that you are a successful investor whether it is with your personal finances or as an investment banker.

Being anti-money laundering compliant is necessary for any Global Business/ Job seeker

Posted on August 24, 2017Categories Short term programmes   Leave a comment on Being anti-money laundering compliant is necessary for any Global Business/ Job seeker

Money laundering is a problem that we have been facing right from the time democracy was invented. It primarily involves the money that is in circulation in an economy without the knowledge of the Government. Any money that is obtained by completing a business transaction that involves cheating the Govt out of its taxes is illicit money. The Government levies different taxes on various activities carried out. Some activities are illegal and hence cannot be carried out with the knowledge of the Govt. Money laundering then it is a major issue with which our country is suffering as there are many people who don’t pay their taxes. Black money came into limelight after cancellation of big currency notes of India like Rs 500 and Rs 1000 notes. These formed over 86% of the country’s cash!

In order to circumvent the Govt’s checks and balances, money launderers use the Hawala system which relies exclusively on cash. You pay cash in Mumbai and depending on which country your account is in, you get the money deposited in that account for a certain percentage of commission, which is paid to the hawala operator. To prevent such activities, the Government has passed a legislation called the Anti Money Laundering Act.

Anti Money Laundering (AML) is a number of procedures & activities which are undertaken to prevent such illegal transfer of money outside the country. In some cases, tax criminals hide their activities through a series of steps that are covered under other legitimate businesses.

Understanding the AML has become important as each and every country across the World is now implementing strict financial controls to prevent any such activity. Due to the global nature of business, every business is now able to sell globally and is able to attract funding from a host of investors based abroad. Any deviation from the set process can result in the business landing in trouble.

BSE Institute Ltd offers a short term course n understanding various financial and accounting procedures involved in being AML compliant.

For instance, AML controls require establishments issuing credit or permitting clients to open records to finish due-constancy techniques to guarantee that these foundations are not supporting illegal tax avoidance exercises. The onus to play out these systems is on the organizations, not on the culprits or the legislature.

To prevent this government has made certain changes in the system. The nation has made certain strict trade laws. The Know Your Customer (KYC) policy makes it troublesome for crooks to utilize banks or other monetary organizations to launder cash.

Under the hawala framework, people exchange cash regularly without the real movement of cash. Key components of the hawala framework are that it exchanges cash without really moving assets. The hawala framework gives security to the law breakers.

The Government of India (GOI) neither directs hawala merchants nor expects them to enroll. The Reserve Bank of India (RBI), the nation’s Central Bank, contends that the broad hawala merchants work illicitly and in this manner, they can’t be enlisted. Apparently, the RBI intends to build its direction of non-bank cash exchange operations by substances, for example, money trade booths and wire exchange administrations in order to break the Hawala system.

Thus, in general Tax evasion is a genuine danger to the worldwide financial framework. Governments of different nations today have thought of various policies to manage this threat. However more should be done in such manner. In India, the black economy is estimated to be around 40% of India’s GDP and this also means that the Govt is not getting a lot of the taxes that they should be getting!! Building a compliance system internally to support the Govt in its efforts and ensuring that we do not lose out on any business is the need of the day. A robust system is the only thing that can support trade and ensure

Understanding a mutual fund fact sheet is as important as reading an MNC’s annual report!

Posted on August 23, 2017Categories Short term programmes   Leave a comment on Understanding a mutual fund fact sheet is as important as reading an MNC’s annual report!

There are a lot of us who are drawn to the fantastic returns that a mutual fund offers. We are sometimes blown away by the 10 time returns that a mutual fund offers you. That’s a return that even Private Equity investors get very rarely. Understanding a mutual fund is very tough as it is a host of companies with a certain unifying factor that makes a fund manager invest in them. Being able to understand and analyze each one of them is difficult and hence you need one report or a fact sheet to help you understand the performance or the prospects of a mutual fund.

A mutual fund fact sheet is defined as an essential three-page record that gives an outline of a common reserve. For potential financial specialists, this is an important and simple answer to understand before going into more detail. The reality sheet gives you data like charges, risk appraisal and return. Let’s have a look at a few details that every investor must know.

Before you invest in a fund, you have to examine what expenses it accompanies, including the charge paid to the Fund manager. So, try to avoid high charges as it will decrease your return. You also need to check risk associated with the fund. The reality sheet will demonstrate the fund’s outcomes throughout the most recent 10 years which is essential to know before you purchase a fund, as it gives a depiction of the fund’s history and helps you to find current its direction. Let’s move on to reading a mutual fund fact sheet. You should keep the following 5 points in your mind about the fund fact sheet.

Fund Managers help you to find the best investment for you and then invest your money accordingly. They decide on the basis of their experience and ability. It is important to know who makes the choices of handling with your cash. Understand their abilities of your fund manager and try to know more about them & their reputation which encourages you stress less over your ventures. Research is the way to long haul riches creation in any form of investing.

Expense Ratio is a compulsory fact that has to be mentioned in the factsheet as it can altogether influence returns. It is the cost of running and dealing with a fund which is charged to the investor. Add up to cost proportion on the factsheet talks about the immediate and consistent plans for every one of the plans given by the mutual fund house. While cost proportion is essential, it ought not to be the main model while choosing reserve.

The first step should be to find the rate of return for the last 3 years. We know that the past experience cannot be used to find the future of any business but yes it helps you to get a rough idea about the possible things. For example, if the plan is for 3 years, then they need to show returns for the past 3 years. Other than this, all plans are additionally ordered to give benchmark lists returns. Check the execution of the plans as for its benchmark much of the time with a specific end goal is a must for any investor.         

BSE Institute Ltd (BIL) is a 100% subsidiary of the Bombay Stock Exchange (BSE). It offers multiple courses for students and professionals to grow and excel in their careers in the BFSI industry. Its courses are taught by senior industry professionals and thus are a great way to gain industry insights and knowledge.

You also need to check whether your investment is in right place or not? For this you need to check your investment time to time so that if in case you find any problems you can rectify it. You need to represent the asset allocation in graphical manner and sector allocation in tabular or graphical, whichever suits you. This will help you to know the breakup of your fund investment.

Standard deviation and portfolio turnover proportion are topics that one must understand correctly in order to understand a fund house’s plans. Every one of the plans is portioned by the risk included. Do check the items marked as risks. Check leave stacks, as it influences your profits on leaves, which implies, the higher returns higher sum gets deducted on exit.

Investing in a Mutual Fund without reading the fact sheet is live driving a car with your eyes closed. Mutual Fund investments are some of the toughest ones to analyze and hence any attempt to invest without reading the mutual fund fact sheet is pointless. Understanding new terms and concepts may take time, but like every other investment, knowledge can help you multiply your funds infinitely, if done well.

Develop the midas touch, know which stocks to pick!

Posted on August 22, 2017Categories Short term programmes   Leave a comment on Develop the midas touch, know which stocks to pick!

Shares are the single smallest units of a company that make anyone an owner of that organization. Purchase and sales of shares happens at the prices that are valid at a given point of time on a certain stock market. Share valuation is a method of deciding the present net worth of an organization by considering the value of each individual share. An investor/ banker deciding the valuation of an organization must have a 360 degree view of the organization and its administration, the arrangement of its capital structure, the possibility of future income and other market factors.

Despite having all the books of accounts and financial reports that are needed to analyze and evaluate a company, many accountants and investors still spar over the methods that are to be used for valuing a company as each method has unique advantages and sometimes give varied valuations.

Let us take a look at the four most popular techniques which are commonly used for valuation of shares, – Asset Backing Method, Yield-Basis Method, Fair Value Method and the Profit for Capital Employed Method. Let us discuss each one of them.     

In the Asset Backing Method, the valuation is made on the premise of the benefits of the organization & hence is known as Asset-Basis or Asset-Backing Method. The shares are valued on the premise of genuine understanding of the advantages that an organization has over its competitors in that industry. This method is also known as Intrinsic Value Method or Real Value Basis Method. Investors try to estimate the value on the basis of the value that of the assets of the company.

The Yield-Basis technique is the viable rate of profit for ventures which is contributed by financial specialists. It is constantly communicated in terms of a rate. Since the valuation of offers is made on the basis of the yields expected, it is called Yield-Basis Method. For instance, a person may buy one a share of Rs. 100 at Rs. 150 from a Stock Exchange on which he may expect a profit of 20%.  Under Yield-Basis technique, valuation of shares is made on the basis of profits or dividends that are earned or expected to be earned by the company.

The next is the Fair Value Method. There are a few investors who don’t like to utilize Intrinsic Value or Yield Value for determining the value of shares. In this case, the mean of Intrinsic Value Method and the Yield Value Method is taken to come to a valuation.

Under the Profit for Capital Employed Method, valuation is done on the basis of rate of profits earned on capital utilized. Rates of profit are taken for the earned/ expected rates of return which a business owner/ investor may expect.

BSE Institute Ltd is a subsidiary of BSE Ltd that offers multiple short term and long term courses for strengthening ones financial knowledge. It is located at the heart of India’s financial district, in Mumbai and takes full advantage of its location to train, skill & support people wanting to build a career in the BFSI sector. It is a great place to learn from all those who are practicing the very skills that are taught in the institute.

The methods listed here may sound a little difficult, but in reality they are not! You will be surprised to know how commonly they are used. They are used frequently by day traders and investment banks. All this may sound a little difficult as these may be new concepts for a new investor, but most of them rely on simple maths and not complex stats.

Well begun is half done. Calculating the true value of a share is what will tell you, if you should or should not invest in it. It is these skills that distinguish you from an average investor and this is what will make you a Millionaire. It is your ability to distinguish a good apple from a bad one is what sets you apart in this rat race!!

 

Minimizing Foreign Exchange risks is as important Financial Analysis of a company

Posted on August 21, 2017Categories Short term programmes   Leave a comment on Minimizing Foreign Exchange risks is as important Financial Analysis of a company

99% of the people reading this may feel that they need not worry about foreign exchange as they are not involved in Forex markets, import-export or any kind of global transaction that involves the use of foreign currency. This is not entirely true. Foreign exchange is something that affects us all on a daily basis. As a nation that imports Oil & Natural Gas and makes payments in Dollars, we always have to be aware of the movement of major Forex prices. Any spike in the value of Dollars means that oil, from which we manufacture petrol & diesel, becomes more expensive, thus increasing the cost of transportation and in effect the cost of any goods and services that depend on logistics. There are very few goods that cannot depend on it and hence any fluctuation in the price of a Dollar, Euro or Pound, one can expect a fluctuation in the prices of most goods, services & commodities.

As a business, it is important to keep a buffer for the price of any raw material that depends heavily on the price of FOREX. The people who are finely tuned to this system are manufacturers, traders, retailers, importers and exporters.

Taking the example of an exporter, an exporter will always quote a certain price to his client abroad on the basis of a Dollar value that he assumes will be prevalent when he receives payments. This value will always be significantly lower than the prevailing Dollar value, thus allowing him to hedge his bets, .i.e. he will not make a loss unless the price of a Dollar falls drastically lower than what he has anticipated. Any increase in the price of a Dollar, will only result in a major windfall for him.

The exact opposite is true for an importer. A manufacturer will have to take a decision on the basis of the product that he is manufacturing and the industry that he is operating in. This is important as one gets a lot of Government subsidies and thus, the cost of the final product and the selling price of the final product may be impacted by this. Subsidies are offered by Governments to exporters and importers also, thus allowing them to make price their products competitively. Most subsidies offered in international trade are commonly referred to as drawbacks, which are a percentage of the final invoice value.

BSE Institute Ltd (BIL), a 100% subsidiary of the BSE, that offers multiple short term courses to professionals, students and housewives for building a career in the banking, finance and insurance industries. You can click here to learn more.

A lot of retailers like Walmart, Tesco, etc. who operate globally may focus on a few countries to get their products sourced from. This makes intricate FOREX details very very important for them. Having a team that can procure at a lower price and sell in a country where it earns them a profit is of utmost importance. If one is not an expert at understanding the global dynamics of this market, it is very easy to slide into a valley of losses.

A lot of Investment Banks and Hedge Funds operate in the FOREX markets. Their main objective is to buy currencies cheap and sell them when their price appreciates. Knowing the dynamics of the global currency markets is very very important for any banker as they trade in Millions of Dollars at a time and one wrong trade can result in huge losses. This is why the knowledge of FOREX markets is so important.

Foreign exchange rates are as unpredictable as the weather. There may be very few ways to actually predict or monitor its price movements. However, this market is like any other market, as in – it gives up its secrets when one persistently studies and follows it. Just like any other market, you can multiply your investments once you master it. So, lets get cracking!!