What is a Mutual Fund

Mutual funds are investment strategies that allow you to put your money together with other investors to buy a collection of shares, bonds or other securities that can be difficult to recreate on your own.

Mutual funds are investment vehicles that pool money from multiple investors to purchase a collection of securities managed by a portfolio manager. Portfolio Manager creates portfolios for investment with a pool of money and often have different types of investment goals.

Shares in a mutual fund are usually purchased at the current Net Asset Value (NAV) of the fund per share. Investors buy shares in the mutual fund, which in turn gives them a claim to the fund's assets (the mutual fund profits). As soon as investors buy in a mutual fund, their money is used by the fund manager to invest in different securities with certain risk and return goals - such as long-term growth or fixed income.

Investors buy shares in the fund and the mutual fund companies get that money to invest on their behalf. One mutual fund may contain hundreds of shares - reducing the risk of loss for investors, if any of the individual funds are poorly managed.
 

Most mutual funds are divided into one of the 6 main categories -

1. Equity Funds
2. Debt Funds
3. Hybrid Funds
4. ELSS Funds
5. Money Market Fund
6. Index Fund

Mutual funds provide investors with the opportunity to purchase professionally managed and diversified securities that can be industry-specific. Mutual funds may charge a fee if investors transfer their shares to another fund within the same fund group. In addition, since you own a portion of the mutual fund, you also pay ongoing expenses to cover the cost of operating the fund, which includes investment advisory fees (payment of the fund manager and research staff), as well as transaction costs associated with the purchase and sale of securities in the fund.

10 Stocks which tanked the most in September

This September turned out to be the most tough time of this year for the stock market investors with multiple stocks experiencing price correction along with many stocks plummeting over news surfacing the media creating a negative speculation and sentiments among the investors.

I have compiled a list of 10 Stocks which lost most of its market value in September in terms of Percentage. Below is the list:

Price as on Today (29-Sep-2018)

Among these list of companies, 2 companies tanked the most with Infibeam losing market value by 75% and Dewan Housing Finance Corporation losing 59% of its market value.

Apart from these two, many Banking & Financial Sector firms were also affected including Yes Bank, Reliance Capital, Central Bank of India, SREI Infrastructure Finance.

If you are planning to buy those stocks thinking that it is now undervalued, Do make sure to do full risk analysis. It is not sure as to how much more the stocks might fall further. 

Buying a falling stock is like catching a falling knife. 

You will get hurt!

Before buying any of the stocks which have fallen a lot, do make sure to perform all kind of fundamental analysis on the stock and assess its current valuation with short and long term projections.

MCA to probe Vakrangee Accounts

Amid the rising speculation among stock market investors of possible mishappening in Vakrangee post the resignation of Price Water House as their statutory auditors, Ministry of Corporate Affairs has initiated a probe on the accounts of Vakrangee.

In Last one year, Vakrangee's share had crashed by over 90% from Rs. 515 in the early 2018 to Rs. 28.75 as on Friday.

The probe would cover the accounts of the company from last 3 years including the analysis of the number of Vakrangee's center or "Kendra" present in India. It would also look into the share holding structure of the company. Vakrangee' Management has gracefully welcomed the decision of Ministry of Corporate Affairs in order to Clear out the false speculation in the market invoving the company.

One Whatsapp Message destroyed 71% of Infibeam Market Value

On Friday, Infibeam's market value was eroded by 71% within a single day. The impact was so huge that the stock crashed by upto 73% and closed at 71% lower at Rs. 58.45.

All this happened over a rumoured message creating havoc among investors which was circulating over WhatsApp just ahead of the company's investor meeting.

The message circulated over the messaging platform alleged that Infibeam had given interest free and unsecured loans of Rs. 135 crore to related firms as on March 31 as mentioned in its Annual Reports.

The weekness in the stock took further hit since the stock was closely held among investors without any institutional ownership thus creating an even more selling pressure crashing it upto Rs. 58.45.

The company had to do a voluntary clarification later to the exchanges saying that there is no pending announcement or disclosure to be made which might impact its stock prices. It further clarified that it gave interest free unsecured loan to its subsidiary NSI Infinium Global Pvt. Ltd. NSI is actually a part of Infibeam. This entity operates the flagship portal of Infibeam by providing a market place for merchants.

Key Factors impacting Indian Stock market currently

Today, Benchmark equity indices BSE Sensex and NSE Nifty plunged down by 1%. While Sensex plunged down by 420 points at around 12noon trade, Nifty plunged by 130 points at the time.

There are several factors driving this behavior. 3 Major drivers include:

1. Falling Rupee

Rupee value against Dollar has reached 72.65 and is expected to get devalued even further. This is causing turbulence in the stock market driving bearish sentiments.

2. Widening Current Account Deficit

Current Account Deficit is hovering around $15.8 Billion against $15 Billion last year April-June quarter. This is majorly due to the increasing trade deficit. This is again driving bearish sentiment in the market.

3. Increasing Crude Oil Prices

Crude oil prices are at all time high. India imports two third of its crude oil requirement. Currently Brent Crude price is hovering around $77 a Barrell as of now. Further increase in prices would severely cause further inflation in the economy thus giving a bearish sentiment to the investors.

Investing in Balanced Fund could help you negate market correction

As per the current market situation. It is expected that market correction might happen after a long period of sustained bullish behavior in the market. As correction is a cycle, it might be coming very soon now.

Correction might be a possibility due to the current market news which includes falling ruppee, increasing crude oil prices and possibility of trade wars due to possible imposition of tarriff barriers by US on Chinese imports coupled by China's possible retaliation measures on this.

If you are investing in equity mutual funds, then possibly equity stocks might take a dip in the short term due to possible stock market correction. In the mean time, in order to preserve your capital you may look forward for balanced or hybrid funds which have at least 65% of debt components under it's asset.

Even though Equity funds give a higher return, but they are equally risky. And at the time when market is experiencing possibilities of correction. It would be wise to balance out your investment portfolio with debt funds to average out any possible implications of downtrend in equity market.

(Disclaimer: Investments in Stock Market is subject to risk. Please exercise your options carefully before investing. )

Rupee at all time Low of 72 a dollar

Indian Rupee has fallen to an all time low of 72 against the USD on Thursday 6th September 2018.

Market has speculations concerning that US President Donald Trump could order additional tariffs on China due to which Rupee has fallen to its all time low of 72.

The speculations are around the possibility of Trump administration imposing another $200 Billion on tariffs on Chinese import probably this week. This could give rise to a significant trade dispute among the two countries. Earlier, in the past 3 months, Yuan has lost more than 6% against the Dollar which is expected to fall further thus intensifying the economic situation.

To know how Falling rupee can impact us, Stay tuned for my next post.

Hello Investors - Welcome to Power Investment Blog

Hi Everyone,

This is my first post on this blog & I have mentioned "Hello Investors" in the title of this post for some reason.

I have created this blog for the audience who are either investors or are planning to be one of them.

Being an investor does not mean you should be one among the rich but a conscious person who dare to become one by doing sound financial planning.

I am an MBA graduate with interest in Finance. I used to hear a lot about finance & stock market since my childhood, but my real interest towards finance grew up in my final trimester of MBA course when I studied a Personal Financial Planning course.

This led me to explore more on this topic and I felt, there are many individuals who are not aware of this important area. Due to this reason, I started this blog to share my knowledge.

I hope you would like this blog & would find it interesting. Do share your feedback in the comments.