team selection matters...indian premier league or ipl is a t20 cricket league that has been gripping...

1
Cricket can help you understand one of the most important concepts of investing in one of the simplest manner possible – Asset Allocation. The success of a cricket team depends on how its players perform. Likewise, the success of an investment portfolio depends on the performance of its constituent asset classes. Thus, selection matters – in cricket as well as investing. A team cannot take the risk of depending on a single player for victory, so neither should you depend on a single asset class for meeting your goals. And, this is where asset allocation helps. *This content was created exclusively for UTI Swatantra. Visit http://www.utiswatantra.com for more information Take note of the changing game – Situational investing Just as a team adjusts its strategy as the game progresses, you must re-examine your investment strategies to check if they still match your financial situation. For example, as you age, you must consider moving your money from Equity Funds to Debt Funds. Tip: You can transfer your money from one scheme to another of the same Fund House with the help of Systematic Transfer Plans (STPs). Selecting the right mixes – Goal-based investing Players are selected based on their past performance, fitness and the pitch. Likewise, your asset classes must be selected based on factors such as your age, goals, financial state, risk appetite and investment horizon. Tip: Don’t follow the herd while choosing your mix of assets. For say, you may have the same goals but can differ on age, risk appetite, and so on. Build your team – Asset allocation While it may sound complex, asset allocation is just like building a perfect cricket team. You need batsmen to score runs, you need bowlers and fielders to take wickets. Likewise, you need different Funds in your portfolio with a different purpose. These could be to build wealth, to save Tax or realise financial goals like buying a bigger home or child’s education. Asset allocation is the process of dividing your investment amount among different asset classes. Tip: Get the right mix of assets. Too much Debt can affect your returns, too much Equity can risk your capital. TEAM SELECTION MATTERS *This content was created exclusively for UTI Swatantra. Visit http://www.utiswatantra.com for more information *This content was created exclusively for UTI Swatantra. Visit http://www.utiswatantra.com for more information For more details, follow us on Twitter @utimutualfund; Email queries or suggestions: [email protected] Please mention Swatantra in TTin subject line. For more such financial advice, head to our website: http://www.utiswatantra.com SWATANTRA KUMAR EXPLAINS: Myth: Playing safe always helps Balancing risk and rewards In the engaging game of cricket, a batsman cannot miss the opportunity of taking a big strike for the fear of getting out. It might result in a big hit. Likewise, a fielder cannot afford to drop a catch if the opportunity so presents itself. After all, catches win matches! Similarly, there are risks associated with Mutual Fund investments but they do come with rewards. Also, there are ways of diversifying this risk. While both the tools help you save Tax on investments up to ` 1.5 lakh annually, 5-Year Fixed Deposits or FDs are comparatively safer than Equity Linked Savings Schemes (ELSS). but are they rewarding enough? Let’s check: FD Particulars ELSS Low Risk High 5 years Lock-in Period 3 years No Can spread investments Yes, through Systematic Investment Plans (SIPs) 7.60% 10 years Compound Annual Growth Rate (CAGR) 13.93% Source: SBI, Ministry of Finance, MFIE Assuming that investments are made on 1st Jan of each year from Jan-09 to Jan-18 in each of the Tax savings options. Data as of 31st Dec, 2018 Bottom Line: Be it cricket or investing, assuming a little risk can get you rewards. Choose wisely! A wise man once said, “Playing it safe is the riskiest choice we can ever make”. Be it cricket or investments, there cannot be a greater truth. ` ` It is never too late to prepare for victory; start today! SIP CAN BE THE GAME CHANGER THAT COULD MAKE YOU WIN! TRIVIA Indian Premier League or IPL is a T20 cricket league that has been gripping cricket fans since 2008. It is played every year during March/April and May. Different teams representing different Indian cities contest to win the IPL trophy. A noteworthy feature of this league is that the teams comprise Indian as well as international players. In the next edition: Every mother wants to provide the best things in life for her children. In the next edition, let's look at how investing in Mutual Funds can help young mothers achieve their goals. Mutual Fund investments are subject to market risks, read all scheme related documents carefully. To know more about investment strategies for young mothers, tune in to the UTI Swatantra Facebook Live show: 'Hey young mothers, it's time to up your financial quotient' on 25th April 2019 from 5:00 PM onwards. CHASING GOALS WITH MUTUAL FUNDS They offer higher returns than a Savings Bank account. As the name suggests, such Funds are Liquid, they offer easy and instant redemptions. Thus, they are ideal for parking your surplus money for a short period and building your Emergency Fund. To be financially prepared for emergencies Liquid Mutual Funds GOAL CHASE WITH WHY They offer low-to-moderate returns, and since they have low-to-moderate risks, they can add stability to your investment portfolio. To meet short- and medium-term goals Debt and Hybrid Mutual Funds GOAL CHASE WITH WHY Equity may be a volatile asset class, but it has the potential of delivering high returns in the long run. Such Funds are ideal for beating inflation. To beat inflation and meet long-term goals Equity Mutual Funds GOAL CHASE WITH WHY You can save Tax on investments up to ` 1.5 lakh annually. You need not make a lumpsum investment. You can even invest through a Systematic Investment Plan (SIP) and save Tax. To save Tax Equity-Linked Savings Scheme (ELSS) GOAL CHASE WITH WHY This solution-oriented Mutual Fund is hybrid in nature and comes with a lock-in period of 5 years. You can, thus, save for retirement in a dedicated and relatively safe manner. Once you retire, you can opt for a Systematic Withdrawal Plan (SWP) to utilise your retirement money in a systematic manner. To save for retirement Retirement Fund GOAL CHASE WITH WHY ARE YOU READY TO CHASE YOUR GOALS? While a high run rate is desirable, a player would not aim to score 500 runs if the target to be chased is 150 – it’s not about scoring high, it’s about chasing the target. And, this is something you must keep in mind even while investing – it’s not about getting high returns, it’s about chasing your goals. Things you need to consider before investing for your goals: Our cricketers don’t play a 20-over and a 50-over match in the same manner. In investing too, different goals or targets need a different game plan. Steps to download and scan a QR code: 1) Download QR code app on your phone. 2) Run app and scan the QR code. 3) Your smartphone reads the code & navigates to the destination. Scan this QR code to calculate the amount you need to invest to achieve all the milestones you have set for yourself Scan this QR code for an interesting parallel between your favourite sport and investments WHAT NEXT? Be it cricket or investing, different targets require different plans. Let’s look at how Mutual Funds help with the latter.

Upload: others

Post on 11-Feb-2020

10 views

Category:

Documents


0 download

TRANSCRIPT

Cricket can help you understand one of the most important concepts of investing in one of the simplest manner possible – Asset Allocation.The success of a cricket team depends on how its players perform. Likewise, the success of an investment portfolio depends on the performance of its constituent asset classes. Thus, selection matters– in cricket as well as investing. A team cannot take the risk of depending on a single player for victory, so neither should you depend on a single asset class for meeting your goals. And, this is where asset allocation helps.

*This content was created exclusively for UTI Swatantra. Visit http://www.utiswatantra.com for more information

Take note of the changing game – Situational investingJust as a team adjusts its strategy as the game progresses, you must re-examine your investment strategies to check if they still match your fi nancial situation. For example, as you age, you must consider moving your money from Equity Funds to Debt Funds.Tip: You can transfer your money from one scheme to another of the same Fund House with the help of Systematic Transfer Plans (STPs).

Selecting the right mixes – Goal-based investingPlayers are selected based on their past performance, fi tness and the pitch. Likewise, your asset classes must be selected based on factors such as your age, goals, fi nancial state, risk appetite and investment horizon.Tip: Don’t follow the herd while choosing your mix of assets. For say, you may have the same goals but can differ on age, risk appetite, and so on.

Build your team – Asset allocationWhile it may sound complex, asset allocation is just like building a perfect cricket team. You need batsmen to score runs, you need bowlers and fi elders to take wickets. Likewise, you need different Funds in your portfolio with a different purpose. These could be to build wealth, to save Tax or realise fi nancial goals like buying a bigger home or child’s education. Asset allocation is the process of dividing your investment amount among different asset classes.Tip: Get the right mix of assets. Too much Debt can affect your returns, too much Equity can risk your capital.

TEAM SELECTION MATTERS

*This content was created exclusively for UTI Swatantra. Visit http://www.utiswatantra.com for more information

*This content was created exclusively for UTI Swatantra. Visit http://www.utiswatantra.com for more information

For more details, follow us on Twitter @utimutualfund; Email queries or suggestions: [email protected] Please mention ‘Swatantra in TT’ in subject line. For more such fi nancial advice, head to our website: http://www.utiswatantra.com

SWATANTRA KUMAR EXPLAINS: Myth: Playing safe always helpsBalancing risk and rewardsIn the engaging game of cricket, a batsman cannot miss the opportunity of taking a big strike for the fear of getting out. It might result in a big hit. Likewise, a fi elder cannot afford to drop a catch if the opportunity so presents itself. After all, catches win matches!Similarly, there are risks associated with Mutual Fund investments but they do come with rewards. Also, there are ways of diversifying this risk. While both the tools help you save Tax on investments up to ` 1.5 lakh annually, 5-Year Fixed Deposits or FDs are comparatively safer than Equity Linked Savings Schemes (ELSS). but are they rewarding enough?

Let’s check:

FD Particulars ELSS

Low Risk High

5 years Lock-in Period 3 years

No Can spread investments

Yes, through Systematic Investment Plans (SIPs)

7.60% 10 years Compound

Annual Growth Rate (CAGR)

13.93%

Source: SBI, Ministry of Finance, MFIE

Assuming that investments are made on 1st Jan of each year from Jan-09 to Jan-18 in each of the Tax savings options. Data as of 31st Dec, 2018

Bottom Line: Be it cricket or investing, assuming a little risk can get you rewards. Choose wisely!

A wise man once said, “Playing it safe is the riskiest choice we can ever make”. Be it cricket or investments, there cannot be a greater truth.

save Tax on investments up to 1.5 lakh annually, 5-Year

Fixed Deposits or FDs are comparatively safer than

Bottom Line:

``

It is never too late to prepare for victory; start today!

SIP CAN BE THE GAME CHANGER

THAT COULD MAKE YOU

WIN!

TRIVIAIndian Premier League or IPL is a T20 cricket league that has been gripping cricket fans since 2008. It is played every year during March/April and May. Different teams

representing different Indian cities contest to

win the IPL trophy. A noteworthy feature

of this league is that the teams comprise

Indian as well as international players.

In the next edition: Every mother wants to provide the best things in life for her children. In the next edition, let's look at how investing in Mutual Funds can help young mothers achieve their goals.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

To know more about investment strategies for young mothers, tune in to the UTI Swatantra Facebook Live show: 'Hey young mothers, it's time to up your financial quotient' on 25th April 2019 from 5:00 PM onwards.

CHASING GOALS WITH MUTUAL FUNDS

They offer higher returns than a Savings Bank account. As the name suggests, such Funds are Liquid, they offer easy and

instant redemptions. Thus, they are ideal for parking your surplus money for a short period and building your Emergency Fund.

They offer higher returns than a Savings Bank account. They offer higher returns than a Savings Bank account. They offer higher returns than a Savings Bank account.

To be fi nancially prepared for emergencies Liquid Mutual FundsGOAL CHASE WITH

WHY

They offer low-to-moderate returns, and since they have low-to-moderate risks, they can add stability to your investment portfolio.

To meet short- and medium-term goals Debt and Hybrid Mutual FundsGOAL CHASE WITH

WHY

Equity may be a volatile asset class, but it has the potential of delivering high returns in the long run. Such Funds are ideal for beating infl ation.

To beat infl ation and meet long-term goals Equity Mutual FundsGOAL CHASE WITH

WHY

You can save Tax on investments up to ` 1.5 lakh annually. You need not make a lumpsum investment. You can even invest

through a Systematic Investment Plan (SIP) and save Tax.

To save Tax Equity-Linked Savings Scheme (ELSS)GOAL CHASE WITH

WHY

This solution-oriented Mutual Fund is hybrid in nature and comes with a lock-in period of 5 years. You can, thus, save for retirement in a dedicated

and relatively safe manner. Once you retire, you can opt for a Systematic Withdrawal Plan (SWP) to utilise your retirement money in a systematic manner.

To save for retirement Retirement FundGOAL CHASE WITH

WHY

ARE YOU READY TO CHASE YOUR GOALS?While a high run rate is desirable, a player would not aim to score 500 runs if the target to be chased is 150 – it’s not about scoring high, it’s about chasing the target. And, this is something you must keep in mind even while investing – it’s not about getting high returns, it’s about chasing your goals. Things you need to consider before investing for your goals:

Our cricketers don’t play a 20-over and a 50-over match in the same manner. In investing too, different goals or targets need a different game plan.

Steps to download and scan a QR code: 1) Download QR code app on your phone. 2) Run app and scan the QR code. 3) Your smartphone reads the code & navigates to the destination.

Scan this QR code to calculate the amountyou need to invest to achieve all the milestones you have set for yourself

Scan this QR code for an interesting parallel between your favourite sportand investments

WHAT NEXT? Be it cricket or investing, different targets require different plans. Let’s look at how Mutual Funds help with the latter.