Once bitten twice shy! This holds true for thousands of people, who start investing before acquiring proper knowledge. What should be your first Mutual Fund investment? The answer differs depending on the investor's age, risk capacity, etc. Let’s discuss some MF fund categories which are good options for first time investors.

Balanced Funds

These funds invest in equity as well as debt. These are hybrid funds. Diversification of equity and debt portions is done in order to avoid any concentration of risk. Debt provides safety from precariousness in equity markets and is very essential for people investing for the first time.

Experts say that these kinds of funds are perfect for first timers because of their pre-determined equity-debt mix.

Large Cap Funds

These funds have a very diverse portfolio, as the schemes invest most of their assets in large companies, keeping the first timers safe. Stability is a major factor here because large companies are less volatile, and that is good for novice investors. Tax-free long-term capital gains are another plus point for large cap funds.

Index Funds

The portfolio of these funds is an index and these hold stocks in exactly the same proportion as their weight in the index. No fund manager risk is entailed in these funds, as there is no call taken by them to increase or decrease holdings.

Tax Saving Funds

This is preferred by most retail investors, as this investment is eligible for tax deduction under Section 80 - C of the Income Tax Act. Because of having a three year lock-in, tax saving funds are considered advantageous. However, some financial planners consider them not so good for beginners.

Apart from this, there are other factors that need to be taken into consideration before investing for the very first time. Do consult your financial advisor before you make the decision.

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Choosing the right product, is the toughest part in any investment decision, be it Mutual Funds, stocks or commodities. The biggest mistake that investors usually make is by choosing a product simply on the basis of its past performance. There are also other considerations to ponder, such as charges, downside risk, consistency etc. Let us look at some important factors that you must consider while choosing a mutual fund.

Quality of Fund Houses

Faith is an important factor in Mutual Fund investment. In order to choose the best scheme according to your needs and requirements, you must first identify reliable fund houses. The fund houses need to have a strong history in the financial market and a decent track record and consistency. A strong base is the key to a stronger empire. Thus, consistency is the key, and a good Mutual Fund scheme is one that manages to outperform its benchmark over 3-5 years. Choose a trustworthy fund house.

May The Odds Be In Your Favour

Risks are a part of every venture in life. In the investment sector too, nothing can be achieved without taking risks. However, for every prudent man, the proportion of risk vis a vis the returns should be a big decisive factor. What would make a worthy Mutual Fund? Same level of risk, yet more returns than the others. There is no greatness in risking everything for very little return, and this should be kept in mind while choosing your fund.

PortfolioDiversification

The basic characteristic of a Mutual Fund is to facilitate diversification across assets, stocks etc. Such a portfolio tends to be at a lower risk than other portfolios concentrated in a particular area. Portfolios of various schemes of fund houses are available for a quick-glance at the websites of the fund houses, and these schemes should be carefully observed and analyzed, perhaps with the help of a financial advisor. A well-diversified portfolio history is what makes the fund worth investing in.

These are some of the factors that every investor must keep in mind while investing. Choose the best Mutual Fund for yourself, and never regret, despite the risk taken.

For more information visit- http://www.bajajcapital.com/

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Among the wide range of investment options available for investors today, Company Fixed Deposits are gaining popularity because of the high returns and other benefits. They are considered far more lucrative than Bank Deposits. However, the slate here is not clean, and Company FDs do have their set of risks involved, which need to be analyzed with utmost caution before investment.

LACK OF SECURITY

Bank FDs are more traditional and thus are a safer option. They provide security upto one lakh investment value, while on the other hand there is a major risk involved if the company you invested in suddenly goes bankrupt!

DIFFERENTIAL REGULATIONS

In case of bank deposits, they are governed by the Banking Regulation Act, 1949, while company deposits fall under the Companies Act, 1956, according to which, equity holders are given preference before FD holders, in case the company is shutting down.

PRE-MATURE CLOSURE OF DEPOSITS

Premature closure before 6 months is denied in most corporate FDs, and the investors have a penalty scare over their head. This premature closure in company FDs also requires a trail of tiresome paperwork, which proves to be another big hassle.

REPUTATION 

Not only should the interest rates be looked at and be lured by, investors should also track the records of the company they are investing in.

No matter how lucrative company FDs may seem, they are a risk in the investment business, and should be approached with proper aid and advice as well as knowledge backed planning.

For more information visit- http://www.bajajcapital.com/

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We have all heard of the adage – “Do not put all your eggs in one basket.” The same holds true in the world of investing. In traditional investment theory, this means holding a range of different products in your retirement portfolio. Too many investors lose their risk appetite as they age. But some opting for growth products is essential for retirees as well.

Beat inflation

Many investors rely on bank deposits for retirement income. They compare tax saving Fixed Deposits, and then try to choose the best annuity plans. Some think of term insurance premium calculators for retirement. But you should also take into account the impact of inflation on your expenses. The product will fall short if the income does not keep pace with inflation. And to earn inflation-adjusted returns, you should be willing to take some risk, by allocating some portion of the investments in inflation beating products. Considering the increase in life span, the retired life can be around 30 years, if a person retires at 60. 

Mix and Match

The advisable approach should be to protect your needs for the first 4 to 5 years of retirement in safe investments, so that short-term market fluctuations do not impact you. Beyond that, you should have some part of the funds invested in growth or equity assets. 

Some products bring assured income for life, but given the low returns, they should be used only to the extent required to meet necessary expenses such as health and insurance.

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A major reason of low tax compliance in India is the burden related maintaining books of account. Although in recent years steps have been taken to improve that. Moreover assesses now have facilities, and not just relating to tax. You can now avail calculators, such as online income tax calculator and online pension plan calculators among others.

But if you are a professional or run a small business, it is the Financial Act 2016 that must have brought cheers to you. It has certain amendments, one of them relating to presumptive taxation. The Finance Act has made things simpler for doctors, lawyers, chartered accountants, etc. by reducing the amount of effort needed to estimate the income for the year and also to file the returns.

Under the Presumptive Taxation Scheme (PTS), eligible businesses can file the return and pay tax on the basis of ‘presumed’ income. They can estimate their income at the rate of 8% of the total turnover. From the current financial year, professionals have been included under the umbrella.

Eligible professionals
The act includes those who are governed or regulated by an institute or body such as doctors, lawyers, architects, interior designers. Also, such professionals should have gross receipts under Rs. 50 lakh.

No advance tax payment
All professionals and businesses usually have to adhere to advance tax payment rules. However, under PTS, a professional is exempt from paying advance tax. This means that he or she does not have to estimate the income four times a year and pay advance tax accordingly. Instead, the professional has to go through the exercise just once.

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