Understanding savings and investment

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Understanding Savings and Investments Target Capital Holding YOUR KEY TO WEALTH

description

A General awareness session designed to give participants a better understanding about savings and various investment options available in the Indian context.

Transcript of Understanding savings and investment

Page 1: Understanding savings and investment

Understanding Savings and Investments

Target Capital Holding

YOUR KEY TO WEALTH

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THE COMPANY- Target Capital Holding

Offers Investment Advisory Services

Managed by professionals with over 18 years of Investment and Advisory experience

Offers accurate and timely in- house research

Facilitates hassle free trading and demat account opening through tie-up with leading brokerage house- Reliance Securities

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Aim of the Presentation

A General awareness session designed to give participants a better understanding about savings and various investment options.

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Importance of SavingsDelaying Makes it Difficult

Rate of interest 10% 10 % 20 %

Monthly savings Rs. 1,000 Rs. 5,454 Rs. 2,000

Tenure 30 years 15 years 15 years

Amount accumulated

Rs. 22.79 lakh Rs. 22.79 lakh Rs. 22.68 lakh

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Rule of 72

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The number of years it will take for your investment to double at a given interest rate.

Interest Rate Years6% 128% 9

10% 712% 615% 520% 425% 330% 2

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What is Inflation

Inflation is a sustained increase in the general price level of goods and services over a period of time.

Inflation reduces the purchasing power of money.

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The gnawing effect of Inflation

Current price yearsFuture price at

8% inflationInterest

rateFuture

amount

₹ 20,000.00 12 ₹ 50,363.00 6% ₹ 40,000.00 ₹ 20,000.00 9 ₹ 39,980.00 8% ₹ 40,000.00 ₹ 20,000.00 7 ₹ 34,276.00 10% ₹ 40,000.00 ₹ 20,000.00 6 ₹ 31,737.00 12% ₹ 40,000.00 ₹ 20,000.00 5 ₹ 29,387.00 15% ₹ 40,000.00 ₹ 20,000.00 4 ₹ 27,210.00 20% ₹ 40,000.00 ₹ 20,000.00 3 ₹ 25,194.00 25% ₹ 40,000.00 ₹ 20,000.00 2.6 ₹ 23,328.00 30% ₹ 40,000.00

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Interest rate must beat Inflation rateRs 20000 takes 12 years at 6% interest to double but in the same time an item which cost Rs20000 will cost Rs 50000 in 12 years at 8% inflation.

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How To Earn Extra Money To Fight Inflation

Stock Markets

Corporate Bonds

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Stock Markets

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Unlimited Investment opportunity.

Earnings in form of Dividend and Capital appreciation.

High Liquidity

Hedging opportunity to mitigate risk.

Pros

Variable rate of return

Fear of Capital erosion

Cons

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Stock Market Returns (4years)

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30% growth

last year

Markets in uptrend since H2 2011

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How to Invest

Decide on Investment duration

Understand basic concepts of Stock market

Decide on whether to opt for self investment or to seek professional assistance

If Self investment – Do your Home work

If professional help- Study manager’s track record

Identify a good broker and obtain economical brokerage rates

Always add brokerage and taxes to obtain your cost price.

Monitor your portfolio periodically.

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Basic concepts- Stock Markets

Index-Nifty/Sensex

NSE/BSE

Blue chips

Scripts

Terminal- Buy/Sell

Price charts

Bulls/Bears

Demat Accounts

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Always Remember

Never buy/sell because an

acquaintance has done so.

Buy/Sell should be backed by

logic.

Control greed.

Be patient

Sustainable returns is more important than

immediate returns.

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Terminal

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Corporate Bonds/ NCD

Corporate bonds or non Convertible Debentures are debt instruments which pay fixed returns .

These bonds are backed by the credit worthiness or reputation of the issuer.

Can be purchased directly from the issuer during the issue period or purchased from the stock market when

the issue gets listed.

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Yields higher interest than bank deposits.

.

Fund does not get locked in during the duration of the instrument.

They are liquid. Can be bought and sold in the secondary market

Pros

Risk of default

Interest income taxable

Cons

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Slide Source:The Economic Times ,article by Prashant Mahesh

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Invest Wisely and Make

Your Money Work For You

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