#finance

• Learn about Financial planning, Stock-Market, Mutual Funds
• Financial-Planning
  • Rules of compounding
  • Taxation Planning
  • Insurance
• Mutual-Funds
• Basic of Stock Market
• Fundamental-Analysis

Investment in stock market(SM)

Myth

• SM is Gambling
• SM is too Risky

Truth

• Major investment scheme returns from 2000 to 2019 in CAGR

  * GOLD  : 11% - 12%% CAGR
  * NIFTY : 14% - 15%  CAGR (Divident included)
  * FD    : 5%  - 6%   CAGR (Post Tax)

Terms Used in Stock Market(SM)

Stock Opening

• Gap up opening
  • Shares opened higher than prev days closing
• Gap down opening
  • Shares opened lower than prev days closing
• Unch (Unchanged)
  • Share price remains unchange

Taxation on shares

Short term capital gain (STCG)

• Holds for less than 1 year
• Rate of flat @15% tax on profit

Long term capital gain (LTCG)

• Holds for more than 1 year
• Upto 1L tax-free, But above 1L @10% in FY
• The Union Budget 2018 proposed to levy long-term capital gains tax (LTCG) of 10 percent on gains exceeding Rs 100,000 from the sale of equity shares.

Start Buy/Sell(Trading)

Trading System

1. Open Outcry
   • Traders gather physically and bid
2. Online Trading
   • Trade Electronically, physical present not required

Sub-Prime Crisis(2007–2008)

• Movie: The Big Short
• Prime borrower –> Borrower who is capable to repay loan
• Subprime borrowers –> those with poor or no credit history

Mistake in Stock Market(SM)

1. Impatience
2. Trading
3. Following the Crowd
   • Be fearful when others are Greedy and be Greedy when others are Fearful
4. Not putting Effort
   • Successful investor = Effort + Discipline approach

Offerings of Shares

• IPO –> Initial Public offering
• OFS –> Offer for sale
• FPO –> Follow on(Further) Public Offer
• Fresh issue
• Right issue

Mutual Funds (MF)

• Mutual funds give small or individual investors access to professionally managed portfolios of equities, bonds, and other securities
• Governed by Indian Trust Act 1882
• MFs are registered as Trust but not as Company

Types of Mutual Funds

• Mutual funds are of different types based on:
  • Fund Schemes
  • Managements of Funds
  • Assets invested in
  • Investment Objective
  • Mode of investment
  • ELSS
  • International funds