Financial Planning

ELSS Vs PPF which Tax saving instrument is Better  “….. But in this world, nothing can be said certain, except death & taxes.” said by Benjamin   Franklin.  While we can’t be clever with death, we can be smart with taxes & save our hard-earned   money. One can save tax by investing in various instruments such as Equity linked saving   schemes (ELSS), Public Provident Fund (PPF), National Pension Schemes (NPS), Tax   saving Fixed Deposit etc.  Out of this tax saving options, ELSS & PPF are most popular. Investment of up to Rs. 1.5   lakhs in a financial year in these two options among others qualify for tax deductions under   Section 80C of Income Tax Act 1961.  Have you invested in PPF or ELSS? In this article, we will compare these two tax saving   instruments which will help you to figure out the right one for you. ·       Lock in Period: Bo...

It is widely recognized that Asset Allocation contributes to over 90% of investment results. From experience, we realize that Asset Allocation needs to be approached from two angles. First and foremost, the investor’s personal or  family situation  will decide what mix of assets they should achieve. The key deciding factor here is being able to divide their financial needs into Short Term, Medium Term and Long Term. One helpful analogy is that water needs can be satisfied by a bucket, a water tank or a dam.  On the same lines, investments in Liquid assets, Bonds and Stocks should be visualized. Stocks are volatile in the short run, but in periods above five years, their returns are substantially better. It is well understood that money set aside for short-term needs must not be invested in stocks. If the market is down when they need the money, a permanent capital loss is quite inevitable. Many investors, however, do not appreciate putting long-term money into s...

A volatile market can be defined as the tendency to rise or fall within a short period of time – in other words it is caused by the ups and downs of the individual investments within the market. When it comes to volatility, the general advice is to keep calm! Volatility in the market is not necessarily a bad thing. Volatility is one of the main reasons why investors sell at the wrong time and often fail to benefit from any potential recovery over the longer-term.  Whilst it can be a natural instinct to want to sell in times of uncertainty to avoid the risk of further loss, don’t forget that as the market falls this reduces the cost of additional purchases you may make.  Here are five potential options: - 1. Accumulate Cash A range bound market is not a time to panic sell. But it may be an ideal time to cut back, especially if you’re an index investor. True, the market may produce an average annual return of around 10%. It doesn’t happen every year, ...