Calling all tigers, time to earn your stripes!

Posted on July 31, 2019Categories Corporate Finance, Entrepreneurship, Executive Courses   Leave a comment on Calling all tigers, time to earn your stripes!

“When you are under pressure, make the bold steps faster, don’t make them slower”

– Azim Premji

 

Financial management is an important function, not only for an individual, but also for a business. CEOs and other company leaders need to manage corporate incomes and expenses in a way that lets them build successful businesses that span across continents and help them earn record profits.

There are a few famous examples of companies that rose from the ashes like a Phoenix – thanks to the smart management strategies implemented by their leaders.

Apple Computers

One of the most famous example of a company snatching victory from the jaws of defeat is the story of Apple Computers. It was in 1997, when the then Apple CEO, Gil Amelio, was ousted. This was the time, when Apple was believed to have funds enough to pay only 3-4 months of salaries. This paved the way for the homecoming of Apple’s pioneer and the mastermind behind one of the greatest corporate miracles, Steve Jobs. He was tasked with rescuing the company and what followed is the stuff of corporate legend.

Jobs built a new lean system for running the company. He undertook painful cost cutting measures, like firing the employees he deemed expendable, discontinuing the products that were failing in the market and slashing unnecessary research and development projects. By focusing only on a few key things, Apple was able to limit unnecessary expenditure.

Eventually, Apple launched one product after another, which brought in record sales for the company. The iMac and iPod were the products that brought in an era of prosperity at Apple.

Today, Apple is the most valuable company in the world with a market capitalization of $1 Trillion Dollars!

For a company that was on the verge of bankruptcy, this is quite a turnaround.

Apple is not the only company that pulled off a blockbuster comeback.

We also have a famous Indian example – 

 SpiceJet

The company’s co-founder and Chairman, Ajay Singh had sold most of his stake to Kalanithi Maran of Sun TV for Rs. 750 crore. After massive losses and increasing liabilities which touched Rs. 1500 crore, the Sun TV founder reached out to Ajay Singh for taking the reins of the company. He acquired 58 percent from Kalanithi Maran in the year 2015.

This was just the start of revival. Ajay Singh came up with some phenomenal techniques to cut costs by adding capacity in their flights. He started by chopping off unprofitable routes, which ate up capital and were a drag on the company.

This ensured profits for the next four quarters with the aggregate figure touching Rs. 356 crore!

Ajay Singh says, “The basic problem was of trust. Customers were not booking tickets with us, lessors were taking back planes, vendors had stopped services, and the government was after us for clearing tax dues. Passengers were inconvenienced and employees thought they had no future. Everything that could go wrong had gone wrong”.

In order to change this he got down to the basics. From making sure flights were operating on time, to counters at the airport functioning in full flow. He worked on every single inch of the airline and pulled off the unthinkable.

All the planning and execution saw their stocks go up by 124 percent and gave them a market value of over $1 billion! The annual revenue of Spicejet was Rs 7,795 crores in 2018, with an annual profit of Rs 430 crores. This is a remarkable achievement for a company that was in the doldrums and on the verge of bankruptcy. Another point that needs to be highlighted is that the airline has made record profits despite high fuel prices and taxes.

The highlights?

It’s the leader who makes a lot of difference in building or busting an organization. With a well-defined vision and determined leadership that’s willing to stay the course even in tough times, organizations have made stunning comebacks. The examples listed above are just some of the few success stories. Leadership is learnt on the battlefield, when leaders are placed in tough situations. However, it’s not necessary to experience every tough situation to learn a lesson. That is why we have courses which let candidates learn from the experience of others.

To learn about all the various aspects of finance, management and leadership opt for BSE Institute’s Advanced Management Program in Strategic Finance ( From IIM LUCKNOW ). Learn from the best, to stay ahead of the rest.

 

Be online, to get ahead of the line!

Posted on July 22, 2019Categories Education, Short term programmes   Leave a comment on Be online, to get ahead of the line!

The digital age has disrupted many many business models. It has changed the way we do many things such as – shopping, travel, ticketing, hotel booking, etc. And why not? There are many good reasons for it to happen! Better customer service, lower costs, more facilities, etc.

Education today continues to be a distant challenge for many people across the world. For those who do get educated, sometimes the degrees they earn don’t teach them the real world skills, necessary to bag jobs. It is because of these market mis-matches that education as an industry is ripe for disruption.

Online education is a good option for students for a variety of reasons.  The tech and the pedagogy which power online learning have gotten considerably better over the last few years.  Now it seems that online education is actually outperforming traditional education.  Evidence of student success and preference, for the online classroom is rising day by day – and this will offer widespread benefits for all of us.

A Babson/College Board study showed that 77% of academic leaders think that online education is equal to or superior to learning in a physical classroom.  Over 69% of chief academic officers believed online learning is a critical part of long-term education strategies.

A 2018 study conducted by Learning House, also showed 85% of students who had previously enrolled in both classroom and online courses felt that their online experience was either the same or better than the classroom course.  This included 37% people, who felt it was a superior experience.

Examples of online degrees outperforming traditional degrees can be found across the globe and across students of all ages.  In the U.K., University of Essex’s online degrees placed in the top 18% of all U.K. institutions with a 91 score in the National Student Survey (NSS) run by Britain’s higher education regulator.

Students are increasingly turning to online courses because it has become a better way to learn.

  1. Online courses offer students greater control over their own learning by enabling them to work at their own speed.
  2. More engaging multimedia content, greater access to their instructorsand fellow classmates via online chat, and less likelihood of outside scheduling conflicts can contribute to improved retention metrics.
  3. Online courses also opt to include more frequent assessments. They believe that – more often students are assessed, the better their instructors can track progress and intervene when needed.
  4. Higher education today gives a huge variety of options for the students. This means that no matter what the studentwants to study, they can find the courses or programs they need online. Students can earn every academic degree online, which ranges from a career certificate to a doctorate.
  5. They prove to be a more affordable option than traditional colleges. Though not all online degrees offer less expensive prices than traditional colleges, but most of them always cost less.
  6. Students can listen to their lectures,complete their assignments and send them electronically, with no need to fight traffic or leave work early for class, or miss important family time.
  7. Online courses also give students an opportunity to plan study time around the rest of their day, instead of the other way around. Students can study and work as per their convenience. Course material can always be accessible online, making it a special library – which is always available for them.

All these depict how online education helps students balance work and family along with their education.

On many occasions, many students who have taken classroom and online courses now rank their online experiences equal to or better than their traditional classroom courses.  We have reached a a fork down the road, where it’s no longer a discussion about the relative merits of online learning, but a question about best way to implement it on a wider scale.

BSE Institute Limited, a 100% subsidiary of the world’s largest stock exchange, exists to support investors and working professionals. We have launched an online portal, bsevarsity.com, which provides over 100 short-term online courses in the field of finance. These courses can be useful for all students and working professionals who wish to increase their knowledge. Visit it now to learn more.

When and where can you invest?

Posted on July 17, 2019Categories Financial Markets, General, Mutual Funds, Short term programmes   Leave a comment on When and where can you invest?

“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”   -Warren Buffet

Investment in the stock markets is believed to be one of the best ways to build a portfolio and a retirement fund. However, the challenge for most is the ability to identify the right companies/ stocks to invest in. It is this ability that sets apart the serial investors from the casual ones.

A small-cap company is one where the total market value of all it’s shares is less than Rs 5,000 crores.

A mid-cap company is one whose total market value is between Rs 5,000-20,000 crores.

A large-cap company is one which has a market value of over Rs 20,000 crores.

Many equity market watchers believe that now is the right time to take interest in the mid- and small-cap segments. The valuations in these segments have been become attractive in the last one-year. By attractive, these advisors mean that they expect the prices of these shares to increase to highs unseen before. The main role of financial advisors is to help decide whether an investor should invest in certain market segments or not.

The mid-cap universe of stocks comprises of stocks that are ranked from 101 to 250 based on their market capitalization. The small-cap segment consists of stocks that are ranked from 251 to 500. Mid and small-cap stocks are most likely to do well in a phase of economic recovery when interest rates are low and there are growth opportunities to exploit. Their smaller size makes them more responsive to changes and opportunities. At the same time, they are most vulnerable when there is a downturn in business cycles. Their revenues and profitability are likely to take a greater hit and, with lower financial muscle to withstand such slowdowns. They are more susceptible to market instability. In a market downturn, these stocks are likely to see a greater cut in stock prices. Mid-caps are in a good spot between large- and small-caps. They still have the flexibility of the small-cap and also have the relative stability of a more established business.

For you, the retail investor, mutual funds are the best way to invest in equity markets, including the mid- and small-cap segments. The categorization of mid-cap mutual fund schemes specifies mid-cap funds as those that invest not less than 65% of the assets in the mid-cap segment. Meanwhile, small-cap funds are those that invest not less than 65% of total assets in the small-cap segment of the market.

A look at the performance of these funds shows that in bullish markets they have outperformed the larger segments significantly. For example, in the bull market of 2014, the average return from the top five funds in the small-cap segment was 85% higher than that from the large-cap funds. Similarly, in 2017 also their returns were stated to be 45% higher than to the large-cap segment. The out performance of the mid-cap segment over large-caps in 2014 has been 56% while it was a more moderate 10% in 2017. On the flip side, in bear markets, they see a steeper fall in prices.

Over five-year and seven-year investment horizons, it has been observed that the mid- and small-cap funds have outperformed the large-cap segment in terms of returns, the higher volatility in returns, especially in the small-cap segment makes them a bit more risky. The Sharpe ratio, which measures the return generated for every unit of risk taken, was at just 0.56 for small-cap funds, and while mid-cap funds had a lower Sharpe ratio of 0.55. Large-cap funds, on the other hand, had a much higher Sharpe ratio of 0.85, indicating that the returns generated for the risk taken were much higher in large-cap funds, while small-cap and medium-cap funds are unable to generate higher returns commensurate with the risk they take.

Conclusion:

The slowing economic trends pose greater risks to this sector and it is important to be able to identify sectors and companies that can sustain in this scenario. If you are willing to ride out the volatility, you can consider some exposure to these segments through mid- and small-cap funds, but there are caveats to be followed.

A well-diversified mid and small-cap portfolio can reduce the risks faced, though the returns will be lower too. Some funds .

At BSEvarsity.com, we offer specialized courses on building wealth with mutual funds, in order to help individuals and professionals be masters at stock market investing.

 

Top 5 financial hacks for beginners

Posted on July 10, 2019Categories Short term programmes   Leave a comment on Top 5 financial hacks for beginners

What is good personal finance planning?

A cycle that we all are too familiar with – from having excess money at the beginning of the month to being penniless in the middle of the month. If you cannot plan for the future and manage your money well, the future will plan for days when you don’t feel so well! This blog can turn an individual’s suffering into sufficient living.

Break the recurring cycle in just five steps:

 

  1. Be honest with yourself:

A fool and his money are soon parted – Dr. John Bridges

It’s a known fact that we spend on things we don’t really need. We end up going to malls eating unhealthy expensive junk food and buying things we don’t need, what for?

It’s a must to be hard on yourself in order to save, invest and grow your net worth. Ask yourself if you really need the things you buy? There are so many clothes and other accessories which we buy, which lie unused after a few months of purchase. Ask yourself the following questions –

  1. Is it a genuine need or a self-demanding want?
  2. Post-purchase use – tomorrow or a month later?
  3. Differentiate between an egoistic purchase anda survival purchase

Identifying your emotion before a purchase helps you distinguish pressing needs from unnecessary wants. A lot of purchases are done mostly on the basis of emotions. Advertisements play with those emotions in order to market their products. A product is given human attributes to connect it to an audience. Control and identify these emotions in order to buy only those things which you truly need.

 

  1. Minimize the miser effect:

The miser will stubbornly live poorly in order to die rich!

Have you ever come across a person who spends much less than what he can actually afford? That’s exactly what hoarding is! There must be an equilibrium between over spending and over saving. Ace investors believe that having too many funds lying in your account is a waste of that money, as its not multiplying! If money doesn’t multiply, your net worth doesn’t grow.

In the words of ace investor and the best-selling author Robert Kiyosaki, “Don’t work for money, make money work for you!”. What he’s implying is the need to invest and multiply your funds.

There has to be a balance between extremism and minimalism. By living below your means, even when you can afford it, you are killing the very purpose of working hard! Never live below or beyond your means – as both can make you unhappy.

In conclusion, we can just say – “do not be a miser who saves for those who will bury him”

 

  1. Borrowers are burrowers:

Credit cards and personal loans do look tempting but they are the proverbial small leaks  that sink large ships. They suck funds out of your long-term assets. Borrowers often end up digging a grave of pending liabilities and burying assets. Borrowing money to support expensive personal expenses such as foreign trips, frequent meals at restaurants, cars, etc results in you borrowing funds from your future income. Credit cards are known to have spoilt many many futures.

Albert Einstein has said that compound interest is one of the greatest invention of mankind! The interest that accumulates on the principal, is what drains your account and can be fatal for your future.

A simple act of borrowing leads to dire unavoidable consequences such as:

  1. Discontinuation from accomplishing financial goals
  2. Stress in a marriage
  3. Undesirable stress

One of the smartest ways in which the rich spend on luxury items is by buying only what they can afford after investing. Many investors invest in real estate, stocks, securities, etc. What very few understand is that they buy a car or a foreign trip from the profits they earn from these investments.

Only when the value of their stocks appreciate do they go for luxury purchases. By doing so, they have got assets that are more valuable, which fund their luxury expenses and that too without them going into debt.

 

  1. DIY it rather than buy it:

Many people and families rationalize their expenses. Instead of ordering food from outside, you can cook the same at home. Instead of buying your clothes from a mall, you can get them stitched from a tailor. These are all personal choices which each family or individual has to make.

Many families believe in the motto of “why purchase it when you can produce it?”

Paint your own house if possible, cook your own food, maintain the car on your own, use public transport instead of a private car.”

Warren Buffet, the Oracle of stock market investing still lives in the same house he purchased decades ago. He still drives the same car and doesn’t have any extravagent expenses. The objective should never be to look rich, but to actually be rich.

 

  1. Piggy bank savings matter

 A Rupee saved is a Rupee earned! If you can save a Rupee each day of a year and invest it regularly, you can build a large portfolio in 10 short years. Saving money for investing is a valuable lesson which is not taught in school or any college.

Use the 24-hour rule. This rule helps you avoid spending on expensive and unnecessary items impulsively. Think over each non-essential purchase for at least 24 hours. This is particularly easy to do while shopping online, because you can add items to your cart or wish list and come back to them a day later.

Always budget when you plan to spend money. By having a strict limit, you do not overspend and buy only that what you need. Savings could also have short term and long-term goals and it needs appropriate consistency.

 

Conclusion:

Wisdom gives one proper restraint in the pursuit of money, however saving is truly a game of will power. Building your wealth is a long term process and it sometimes takes decades. However, building the right fundamentals at a young age ensures that your portfolio multiplies at a much faster pace.

It is always advisable to build and manage your own portfolio. Start now, by learning it online. Learn to manage your wealth by studying wealth management online on our platform BSEvarsity.com. Begin early in order to make inexpensive mistakes. As always, the early bird catches the worm!

Why choose index mutual funds over other mutual funds?

Posted on July 9, 2019Categories Mutual Funds, Short term programmes   Leave a comment on Why choose index mutual funds over other mutual funds?

“To make the most of your money, I recommend sticking with mutual funds that don’t charge a commission when you buy or sell.”

Suze Orman

 

Let’s not confuse some effort/ activity with progress!  We regularly see mutual fund advertisements, but investing in any mutual fund scheme is not a sure way to multiply your investments. You still need to pick a right investment/ mutual fund to get a desirable on investment.

For the best possible returns on investment, it is a must to read the mutual fund fact sheet, follow the industry the fund is investing in and track the record of the fund manager meticulously. Doing these three regularly is difficult for working professionals. So how can one take advantage of the market linked funds? How do we benefit if the stock market appreciates?  If you cannot track the 3 mentioned above, you can simply invest in index funds.

Index mutual funds aims to mimic returns of benchmarks, like Nifty or Sensex, and have seen their assets rise over 60 percent over the past one year. An index fund invests only in the stocks of companies which are performing very well. Ex: A BSE sensex index fund consists of investments made only in stocks which make up the BSE or NSE sensex. As an index fund, the Mutual Fund can invest only in these stocks. If any stock falls off the BSE sensex, the fund has to exit that stock and reinvest their money. There are many other funds, which invest solely in top performing stocks in certain industries.

The stocks which form a part of a stock exchange’s index are stable companies, which have given fabulous returns over a period of time. These companies have stable, reliable managements, that have a reputation for establishing and growing businesses into multi national corporations. These stocks are used for a variety of indexing and other macro-economic indicators This is because it offers better returns than schemes that invest in a broader set of stocks have drawn smart investors to them. As per data compiled by ETIG database, Index funds (excluding Exchange Traded Funds or ETFs) saw their assets jump from ₹3,773 crore in April 2018 to ₹5,275 crore in April 2019.

Index funds aims to invest in fixed set of stocks which generally comprise of key market gauges like the Sensex and the Nifty. This requires minimum skills of the fund manager. In the past one year, it has been noted that actively-managed schemes and portfolios decided by fund managers have under performed their benchmark indices like the Sensex and Nifty.

Many fund advisors and financial planners believe that index funds are likely to make their presence felt in India in the coming years. As many large-cap funds need to invest a minimum of 80% of their portfolio in the top 100 stocks by market capitalization, the category could struggle to beat the indices. Earlier, many such large-cap funds took exposure to mid- and small-cap stocks and managed to beat their benchmarks.

Financial planners believe the biggest advantage of an index fund is its low cost with passively managed funds costing as low as 20 basis points (0.2%) in regular plans — those advised by distributors. In contrast, actively-managed equity funds could charge 150-225 (1.5-2.25%) basis points in the regular plan. ETFs, are a substitute for index funds and are cheaper than index funds. However, you need to maintain a demat account and pay brokerage when buying or selling these units.

Fund houses have increased passive investment products over the past couple of years. Recently, Indiabulls launched the Nifty 50 ETF, while DSP Mutual Fund has launched the DSP Nifty 50 Index Fund, DSP Nifty Next 50 Index Fund ; a mix of active and passive management funds.

As these funds have outperformed most fund managers in the market, it can be safely said that exchange traded funds and index funds are safe investments that give you great returns.

BSE Institute is a 100% subsidiary of BSE India, the world’s largest stock exchange. We offer multiple courses that help students, investors and working professionals move up the corporate ladder and invest better. Our short term course on Building Wealth with Mutual Funds helps you invest better in mutual funds. It is available online on bsevarsity.com, and can be learnt via live sessions. Use BSE’s experience of the stock markets to build a bigger and a better portfolio.

Study online- build a career in half the time!

Posted on July 3, 2019Categories Short term programmes   Leave a comment on Study online- build a career in half the time!

“Think out of the box and create a learning experience where the learner can interact with the content, and their brains.”

– Rosalie Ledda Valdez

When was the last time you were eagerly wanting to learn something new? A lot of us can vouch – we yearn to learn, once we truly start understanding what we are passionate about! For a lot of late bloomers, passion kicks in when they start working, but by then it’s too late to join any college or university to learn anything new as your job and other personal commitments don’t allow you to do it. Also, higher education is quite expensive and sometimes the promotions you stand to get, don’t justify the costs involved in studying.

This is a major challenge which many Indians and global citizens face today. Education is too expensive and sometimes the job on offer post education, doesn’t justify the expenditure. The education system has remained the same but with a steep increase in costs.

This is where online learning has disrupted the industry.

  1. In a diverse country like India, it’s nearly impossible to have great teachers in every areaand field of study. Similarly, the best teachers are only restricted to a fewmajor universities. Online learning solves all these challenges. Students residing in rural areas with limited access to many facilities can learn any course they wish to online. Students can learn at their own pace and in the comfort of their homes. This lets them study a lecture twice or thrice in case they need more clarity on certain topics.
  2. Online learning material can be distributed easily. It is much easier to design courses with the latest reference material. It is easier to keep all content in a soft copy as compared topublishing lakhs of books, which also have to be distributed across the country.

People don’t need to travel to the book stores or to the schools to pick up books or other materials, which can now be obtained and saved online, quite easily. This can easily be shared by people studying the course with other individuals.

  1. With aremarkable increase in internetpenetration usage and a drop in the prices of smart phones/ devices in India, access to online learning has become cost effective and easy.

For instance, we can learn any topic, any concept or subject online via a blog or a course.

E-learning allows the Government to strengthen the overall educational infrastructure without spending heavily on actually building classrooms, tables and distributing books – all of which require an enormous amount of funds, time and effort. Thus, students can get access to great teachers from their homes, taking their learning to the next level.

  1. The e-learning space has also witnessed new developments with respect to unconventional methods of learning. Availability of unique courses across different categories will encourage students to expand the breadth of the content they consume.

Online learning is more interactive and fulfilling. With this, students can set goals, measure their progress and celebrate their learning achievements. Live online interactions between students and the educators can offer personalized learning that will benefit students in remote areas and also the ones who are studying in overcrowded schools ( a common feature in India).

The role of emerging technologies like AI will be massive in this movement. AI bots can act as study assistants, which will accompany you along on your learning journey. It will understand your strengths and weaknesses and can even recommend you the subjects that you should take up/ brush up.

The future of online learning in India looks very promising. With multiple players operating and achieving scale in the market, it’s only a short period of time before e-learning is the normal way of learning. Location, language and financial resources will no longer be a barrier to getting  a great education due to online learning.

BSE Institute Limited, a 100% subsidiary of BSE India has promoted its own online portal to support investors, working professionals and students to learn more and improve their financial knowledge. The online portal is known as bsevarsity.com. It provides over 100 short-term online courses in the field of finance. Thousands of individuals have been trained via this platform. Check out all our courses here.

With debt mutual funds, you always win!

Posted on July 3, 2019Categories General, Mutual Funds   Leave a comment on With debt mutual funds, you always win!

“Mutual funds were created to make investing easy, so consumers wouldn’t be burdened with picking individual stocks”

– Scott Cook

With the BSE Sensex crossing the 40,000 mark – the Indian stock market has witnessed and created wealth for millions of retail investors in India. A big bull run which has been in progress for the past few years is now bound to continue for the next few years due to the positive economic fundamentals of our country.

 

For a majority of Indians who find stock picking and investing difficult, mutual funds have been the vehicle of choice for value creation and maximization. Having said that, choosing a certain mutual fund, out of the few hundred schemes that are available is again tough. For those unsure about equities, investments in debt mutual funds has been a favored path for mutual fund investments.

 

Then again, the field is far too wide and understanding a mutual fund fact sheet is tough! However, there are simple ways to track and multiply your debt mutual fund investments. Here are a few important points which a debt investor should always remember:

  • Know your categories well

To start with, one must have proper information about the different investment categories and the risks involved with each of them. Always plan to avoid credit-risk funds if you don’t want risk in your portfolio. If you want to bet on corporate securities, with good returns, bet on corporate bond funds.

 

  • Check the mutual fund fact sheet regularly

Top mutual fund advisers think that retail investors, must keep a proper check on the investments your schemes make. Large fund houses usually send a fact sheet on your registered e-mail id every month. You must always track the changes in the fact sheet. Which debt instruments have been added to the scheme? Which have been dropped? Has there been any change in investing strategy?

Mutual fund fact sheets may take time to read and understand, but once you are clear, it is quite easy to read and track it. Plan and educate yourself properly if you are investing by yourself.

 

  • Quality of the portfolio:

It is a fact that high rated instruments have lower chances of defaults. So always check if your scheme portfolio is betting on low rated securities to earn better returns. The allocation changes and the ratings of the instruments added in the portfolio should always be monitored.

AAA-rated securities have a negligible chance of default. An IL&FS type of default is very rare and unexpected. However, one must always stay vigilant.

 

  • Background of the mutual fund house and portfolio manager:

Many mutual fund advisers believe that new investors and self-taught investors should always choose bigger fund houses. Those fund houses which are already established and have a good track record have low chances of taking risky bets. For larger fund houses, the cost of taking a wrong or a risky call is too expensive as they stand to lose thousands of crores.

It affects their reputation, which takes years to build. Hence, it is always a good choice to invest in an established fund house with a good track record.

BSE Institute is a 100% subsidiary of BSE India, the world’s largest and the fastest stock exchange. BSE Institute offers a variety of classroom and online courses which help investors to gain more knowledge, working professionals to move up the corporate ladder and students to launch their careers.

Our short-term online course on Building wealth with Mutual Funds is best suited for individuals who wish to learn about and invest in mutual funds. All course lectures are taught live, online and can help you learn fast in a matter of few weeks.