Indian stock markets at your doorstep

Posted on October 30, 2019Categories General   Leave a comment on Indian stock markets at your doorstep

When it comes to investing, the options available are diverse. This is actually a great thing because the every individual is different. They are diverse in their risk taking appetite, in their financial end goals, and primarily vary in the investing abilities. A person who loves taking risks might be tempted towards equities and shares, while someone who loves playing it safe would be inclined towards a mutual fund or bond.

Let’s talk about some financial instruments that you usually come across.

  1. Mutual Funds: This is a type of investment where money is pooled together from investors to invest in different schemes. These are operated by money managers, who could be an individual or a firm. They are professionals who diversify your investments and try to get maximum gains in the speculated period. This is a safer bet for people who feel it is risky to trade on their own.
  2. Bonds: This is a fixed income instrument by which a corporate or the government lends money from investors at an agreed interest rate for a specific time period.
  3. Derivatives: A derivative is a contract between two or more parties whose value is derived from an underlying asset. It derives its price from fluctuations in the underlying asset.
  4. Equity Shares: This gives you an ownership of a company. Once you own shares of a company, you gain voting rights too.

Now that we know about the financial instruments, let’s step into the Indian share market.

How to invest in Indian Share Market?

The first step in your life as an investor, you need to open a Demat and trading account and link it with your bank account. Once you’re done with this, you need a broker who can buy and sell on your behalf. No individual is allowed to go to a stock exchange and buy shares, instead you need a broker.

My advice to you is, be familiar with stock exchanges and its functions. This stock exchange is regulated by SEBI ( Securities and Exchange Board of India ). The two major stock exchanges for Indian investors are BSE (Bombay Stock Exchange) and NSE (National Stock Exchange).

Now that you’re buckled up remember this, we as individuals have our own set of goals and targets to achieve. Be it buying a house or a car, going on an expensive tour around the world, for all these goals, we need a strong financial planning. Stock markets could give you great returns, provided you invest in the right companies and be patient.

How do we start?

  1. First of all, define your goals.
  2. Invest regularly
  3. Understand and learn more about financial assets.
  4. Choose your assets carefully
  5. Finally, learn more about your assets (do this every few months)

 

Types of stocks in equity markets

When you buy a share, you either become a common shareholder or a preferred shareholder.

Common Shareholder: Being a common shareholder, you are entitled to vote, and are eligible to receive dividends. In case of bankruptcy, you will get a share of the proceeds of the liquidation after preferred shareholders and the creditors of the company.

Preferred Shareholders: Being a preferred shareholder, you won’t have any rights to vote during a shareholder meeting, but you will be the ahead in line when receiving dividends and liquidation proceeds.

Based market capitalization, you could invest in a large cap, mid cap or a small cap stock.

  1. Large Cap Stocks: Large cap stocks, also known as blue chip stocks are that of well established brands. In India, companies like Wipro, TCS and Infosys are examples of Large Cap Stocks. These investments are less risky as they have an established record for good performance and a stable competent management.
  1. Mid Cap Stocks: These are stocks of mid-size companies that are currently growing quite fast. The company is not as experienced as a large cap, but it is performing well enough to be on the radar of risk taking investors. These companies have the potential to grow very fast in the future. The examples of mid cap stocks in India are Vinnati Organics, Cera Sanitary Wear, etc.
  1. Small Cap Stocks: These are stocks of small companies and hold a high risk factor. These companies may have debuted on the stock markets recently and are yet to prove their mettle. They are extremely risky investments as they can fold up anytime soon. On the brighter side, these companies give some of the best returns and give great dividends. Many people have become millionaires on the back of investing in small cap companies.

 

Conclusion

There’s one more important piece of advice that we would like to give you. Never invest based on a rumor or word of mouth. Always do your research before investing. You don’t want to regret investing just because someone else asked you to.

Also, be aware of your risk taking appetite and invest accordingly. Learn throughout your investment journey and keep improving yourself every day.

BSE Institute Limited’s short term Basic Program on Stock Markets is the perfect course for anyone planning to start investing. Build a strong foundation before you set the ball rolling!

Investing needs Introspection!

Posted on October 16, 2019Categories General   Leave a comment on Investing needs Introspection!

When you closely observe investors, every successful one is different. You could categorize them on the basis of age, purpose, risk taking appetite and income differences.

Let’s talk about purpose, because this is a very important aspect to focus on before investing. Before you do anything, you often think about the purpose/goal, which is normal, because in the end, we do things that benefit us.

There are a few questions that you must ask yourself before investing, just so that you have a clear idea as to why you’re investing and how the investment will help you in achieving your end goal.

  1. Growth, income or security?

This is the first question we expect you to ask yourself. Some people invest in order to grow their assets column. These investments help them grow their value in terms of money.

Similarly, some people invest so that they can have a regular income to fund certain bills. This is a very nice move if you’re looking to cover your monthly bills, without touching your regular income.

Finally, some people have their eyes on security or safety. These investments cover a person’s long term needs or post retirement needs. These plans make a projection of your income and expenses, and then checks your financial account value before coming to a conclusion as to what your need exactly is.

  1. What is the realistic amount to invest?

To follow up on the first point, you need to think of an amount that you can invest monthly without disrupting any of your regular necessities.

When it comes to mutual funds you can decide to invest a minimum amount every month, and continue doing the same on long term basis.

If you have lump sum money at your disposal, you might want to diversify your investments in bonds, equity, stocks, etc.

  1. When would you want this money back?

This has a lot to do with the first point that we mentioned. In the first point we asked you to find a purpose for investing. When your focus is retirement, you might invest a certain amount in a safer scheme, every single month. You won’t care what the value would be after 1-2 years. All that matters is the amount which will be available upon your retirement which is a long term approach.

Alternately, if you’re planning to buy a luxury item in the next 2-3 years, such as a car, you might end up investing in equity funds so that you could multiply your money quickly. This has higher risk attached with it, but with the right approach, you could produce wonders in this short period.

  1. Where should you invest?

The choices are in abundance, but which is the right investment for you? First of all, go through all the options that are available to you. Analyse the options and find out the ones that could help you reach your goals. Once you list down the options available, cut out the ones that you are not confident about.

Once you reach the final list, plan out your investments and start funding your future plans!

Conclusion

Investing is a lot about your risk taking ability and your financial knowledge. Your risk taking appetite will start increasing if you focus on increasing your financial knowledge. Ask yourself these and answer honestly – for this is what will shape your future. It is this introspection, that will give you the answer to all your investment plans.

Investment has its own risks and rewards, but if you have strong roots, you have nothing to worry about.

BSE Institute Limited’s Executive Program in Investment Management is the perfect recipe for your investment appetite. Enroll now and secure your future as an investor.

A leader for the new age

Posted on October 10, 2019Categories Entrepreneurship, MBA   Leave a comment on A leader for the new age

The year is coming to an end, and so is the decade. The past decade has seen major changes in all existing sectors and has given rise to new sectors. Social media has taken over the world, self-driving cars have arrived, and we have banking facilities at our fingertips and the list can go on and on.

The changes in the industry are crystal clear when we compare the start and the end of the decade. How these changes have been implemented in this world?

There are underrated players in the industry who facilitate these changes. The reason we call them underrated is because their efforts are not visible to our eyes, but we see the end products. A lot of changes in our lives happen, without us realizing them, as they are implemented very smoothly.

A leader is the one who holds an organization together. He is the ultimate go to person for all employees, clients and vendors. So, what makes this position so unique and demanding? In today’s ever changing world, which traits would make a leader competent?

 

  1. Eagerness to learn: Technologies impact businesses in a unique way. It is a given that a firm needs to adapt to the new tech or risk losing its share of the market. Customers love innovation and are instantly attracted towards it. This is the reason why we say, “leader must be eager to learn”. An ideal leader must be curious about new innovations and trends, so that he can implement the right ones in his company. This eagerness to learn ensures that the leader is open to his subordinates’ thoughts. It not only helps creating a positive work atmosphere but also welcomes new ideas that could benefit the organization.

 

  1. Value your workforce: This is probably one of those tips that you have been receiving throughout the past decade or more. The problem is that not everyone follows this which leads to dissatisfaction among the employees. In a world that is so closely connected, it is very important to stand out from the rest. It will help develop a sense of inclusiveness among the workforce, which will be directly visible in their work.

 

  1. Empower the workforce: Any leader will be a little skeptical of this point. A lot of us might even see it as being risky. So why empower the employees, who do not have adequate experience? Digitization has made sure that employees have quick access to resources that is needed for their work. This should kick out the process of going through different levels for getting the required data and go ahead with any particular work. Employees should feel free to make any decision that could benefit the organization. The leaders in turn must assess these decisions to increase the efficiency and quality.

 

Some of you might mention, that these are easier said than done. Let us quote an example from the Indian IT industry:-

There was a point in 2014 when Infosys, a Bangalore based multi-billion dollar company was struggling. Their results weren’t up to the mark which saw its share price fall sharply.

In came Vishal Sikka, who was appointed as the CEO of this firm and asked to change its fortunes.

In the 2 months prior to his joining, 1 in 5 employees were leaving the organization. To change this, he promoted over 5000 people in the organization, with a pay rise.

The second change he brought in was to change the company from being low cost to high quality. The idea was that people are willing to pay more for better services. Along with this, he held “design thinking workshops” for his employees who were encouraged to come up with ideas to be more efficient on projects.

In 2015, he made sure Infosys was up to date with the latest industry technology. They just couldn’t compete with their western counterparts with the existing tech forever.

He even decided to move the corporate focus to Artificial Intelligence (AI). This will again benefit the firm in the longer run, as all major MNCs are now moving towards AI.

All the decisions Mr. Sikka took started showing results. The attrition rate dropped sharply and, the business started showing green shoots of growth. Infosys witnessed the highest rate of business growth in almost 5 years. All this resulted in a motivated and confident workforce – which was highly productive as compared to the past and their industry peers.

Conclusion

Now that we have seen an Indian example, you can imagine how important it is to have a perfect role model for a leader. Ensuring there is growth, keeping staff satisfied and creating a positive atmosphere for all your employees is crucial!

We at BSE Institute and IIM Lucknow offer you a chance to follow the footsteps of great management leaders with our Advanced Management Program. Learn leadership and get the designation you deserve.

Spread your wings, with mutual funds

Posted on October 1, 2019Categories Financial Markets, Global finance, Mutual Funds, Short term programmes   Leave a comment on Spread your wings, with mutual funds

It is said that only two things in life are unavoidable – death and taxes! Both may be unpleasant, but can be comfortable if you learn to plan well.

There are many things you need to learn in life, but none can be as important as investing. No one can work forever or live off their savings forever. This is why it’s important to know what to invest in and how to profit from it.

Availability of multiple schemes can be a bit confusing, and that is why we are writing to highlight the best bets out there.

Mutual funds is a set of money pooled in by investors who could be individual investors, companies or other organizations. This fund is managed by an Asset Management Company (AMC), who go on to invest the same in stocks, bonds and other investment vehicles.

The Net Asset Value (NAV) is the price of individual mutual fund unit, and an AMC can buy or redeem these units.

 

Benefits of mutual funds

  1. Diversification: One of the golden rules of investing is to diversify. This reduces the risk that comes with investing. When you invest in mutual funds, your funds are invested in a variety of industries. So, even if one of the industry experiences a downfall, the other industries will still keep your fund flying high.
  2. Simple to understand: The world of financial products is quite complex, diverse and most of them are difficult to understand. On the other hand, mutual funds demand no prior experience or knowledge in financial markets. Simple industry knowledge is enough to invest in them.
  3. Investment expertise: Investing in stocks is not easy. You need to be really experienced to do well in the market. Mutual funds are managed by experts with decades of experience of picking the right stocks at the right time.
  4. Variety: Mutual funds offer investors a variety of schemes which suit their risk appetite. Equity funds are schemes for investors with a high risk appetite. Debt funds are suitable for investors with a medium risk appetite. Balanced or hybrid funds are best for people with a low risk appetite.
  5. Affordability: Mutual funds schemes are usually a cheaper option for diversifying your portfolio. In cases where investors opt for SIPs (Systematic Investment Program), they end up investing a very small amount every month. This makes the mutual funds scheme attractive and affordable for any person.

 

Types of Mutual funds

There are many of mutual funds available in the market. We’ll mention a few that will help you get familiar with the schemes available.

  1. Equity funds: The money that you invest in equity funds are used to buy shares/ stocks of companies. The returns are determined by how these shares perform in the market. The chances of quick growth are high.
  2. Debt Funds: These are funds that are invested in bonds, securities, etc. These are suitable for people who are looking for a long term investment plans which gives regular returns.
  3. Balanced or hybrid funds: These are funds that invest in both, equity and debt funds. Basically, its a mixture of the first two funds. It’s the AMC which decides the ratios of the funds allocated to each one.
  4. Open ended funds: These funds don’t have any limitations on the period of time or the number of units. You can enter and exit whenever you like at the current/ existing NAV.
  5. Close ended funds: The name suggests what you can expect from a close ended funds. These funds have a predetermined sum that needs to be invested and at times, a lock in period is also put in place.

 

Conclusion

Be wise with your money and invest in only those assets that match your risk taking appetite. With mutual funds the options are many and that makes it easier for you to choose a specific plan as per your needs.

Putting your money to work sounds easy, but it’s not. BSE Institute Limited gives you the opportunity to do just that with a Basic Program on Mutual Funds Fact Sheet. Understand Mutual Funds to be a master investor and let your money do the talking.