Change in Taxation Rules for Debt Mutual Funds from 1st April 2023. What should retail investors do?

Recent changes in taxation rules for Debt Mutual Funds declared by the Government, has been a topic of discussion for the past few days. Several amendments were being made to the rules and regulations regarding it. In this blog, let’s explore the amendments made in the taxation regarding the specified Debt Mutual Funds and their impact on overall investments. Read more.....

 

What is Tax Gain Harvesting & Tax Loss Harvesting? How to calculate it? What are the benefits?

By its name, you must have got little idea that both terms Tax Gain Harvesting & Tax Loss Harvesting are related to taxation. Both strategies are related to reduction in tax liability.

Many people find taxation a very difficult or boring task. But, in this blog, we will make it simpler for you.

Let’s first talk about Tax Gain Harvesting. Read More......

Calculation : Long-Term Capital Gain Tax in Mutual Fund Investments

In Mutual Fund Investments, there are two types of gains that an investor can earn. The first one is earnings from Dividends & the second one is earnings from Capital Gain. In Capital Gain, there are two types w.r.t Income Tax Act.

1. Short-Term Capital Gain
2. Long-Term Capital Gain

In this blog, we are going to see how to measure the gain and what are the tax implications of Long-Term Capital Gain.

What is Capital Gain?

As per Wikipedia, the definition of Capital Gain is;

“Capital gain” is an economic concept defined as the profit earned on the sale of an asset that has increased in value over the holding period. An asset may include tangible property, a car, a business, or intangible property such as shares. Read More......

8 Important things you should do before 31st March 2023

 

There are just a few days left before the end of the Financial Year 2022–23. And as usual, every investor or earning member is supposed to complete a few important things before the end of FY. To avoid last-moment panic, in this blog, we are jotting down a few important points that would be helpful for you.

1. Linking your Pan Card with Aadhar Card

You must know that the last date for linking your Aadhaar with your PAN is 31st March 2023. After 31st March 2023, i.e. from 1st April 2023, your PAN number will become inoperative if it is not linked with your Aadhaar.

If you fail to do so, there are major consequences that you will face. A few of them are listed below, Read More…..

7 Things Existing Investors Should Do During Market Volatility Due To Elections

Every election in India brings about some volatility in stock markets. We have experienced this in past 5-6 elections. During the period of elections, the market swings up and down wildly. During this volatility, there are chances that the value of existing investments go down or go suddenly up or it can move both ways.
This causes a lot of anxiety among investors. During this period investors are always in a dilemma whether to continue being invested in markets or to move the investments temporarily in liquid funds (liquid funds has no effect of share market).
1. How long from here you don’t need amount out of your Investments?
In case you don’t need money from your investments for a period of more than 5 years from this point then you should continue with whatever you are currently holding. In case you need a partial amount in the next 2-3 years then you should think of parking some amount out of your investments in relatively saver funds.
2. Decide on the basis of your existing asset allocation-
In case you have a very conservative asset allocation pattern in the sense you have a very little exposure to equities and you may not need your money for next 3 years then you should continue to hold existing Investments. In case you need your money in the next one or one and a half year then you should consider shifting all the amount to debt funds.
3. Decide on the basis of your risk appetite–
In case you are aggressively invested and your risk profile has changed in the recent past due to change in your current age then you should think of revisiting your asset allocation. You may want to move some amount in a relatively safer fund.
4. It’s a good idea to continue with whatever you are holding-
Sometimes investors tend to time the markets. Investors feel that they can take the benefit of dips in market during election volatility. Believe me, it is very difficult to time the market. It may not be a great idea to try and push your money during the dips in the market as you may not be able to capture the perfect ones. there is always a high possibility that you will miss both the tips and tops. show a better idea is to continue with whatever you are holding.
5. Do not track your investments often- especially during volatility investor have a tendency to track their investments closely. If they find that their value has eroded or there are negative returns the investors get panic and in such scenario, they are likely to take wrong decisions. Better not to track the Investments closely. It would be a great idea to skip watching your investment portfolio during the period of elections.
6. Judge your requirement of emergency funds– in case you feel you do not have emergency funds set aside currently then you may want to shift amount required for contingency from equity portfolio to debt portfolio.
7. Discuss with your investment advisor–
Every investor his emotional about his own money and hence the Investments. Leaving aside the expertise your investment advisor has, he can look at your Investments from neutral perspective. That is why he is in a better position to take right decision about your investment portfolio.

Liquid Funds: A Superior Alternate to Saving Account

Liquid Fund is a category of Debt Mutual Funds. Debt Mutual Funds who invest in very short-term market instruments such as treasury bills, government securities, bank certificates of deposits and corporate bills are called as Liquid Funds. Most of these instruments contain either no risk or low risk. Liquid funds are an open-ended fund investing in Money Market Instrument having a maturity of up to 91 days.

Liquid Funds objective is to provide a high degree of liquidity and safety of capital to the investor. Because of this, fund manager invests the capital in the high credit quality debt instruments.

Benefits of Liquid Funds:

• No Lock-in Period
• Withdrawal from Liquid Funds are processed under 24hours on the business day
• Double returns than Saving Account
• No Entry and Exit Load

Returns from the Liquid Funds:

The returns from the liquid funds are double than saving accounts. Usually, the range of returns from the liquid fund is between 6-7%. Investors start earning returns from the date of investment itself thus minimizing any return leakage.

Who should invest in Liquid Funds:

Liquid funds are ideal parking grounds when you have a sudden flood of cash. Instead of keeping it in a savings bank account, you may invest that performance incentive which you received recently or some windfall gains in a liquid fund. You can exit the scheme anytime without any exit load and receive your funds the next day.

Let’s take an example if you sell a plot or house and plan to buy another house within the next 3 months then you get loads of money suddenly into your bank saving account. This temporary money can be invested for the next 3 months in the liquid funds to get more interest than savings accounts.

One more example of Liquid Funds is that you can invest your business funds (rotating funds required for running the business) into Liquid funds. As the business funds are generally kept in the current account where the interest rate is zero, this fund can be invested in the Liquid Funds. As Liquid Funds have high liquidity, you can redeem the funds within 24 Hours.

Another way to use Liquid funds is to invest your lump-sum capital in the Liquid funds and opt for the STP to invest in the Equity Funds of your choice. Generally, you will go for SIP to invest in Equity Funds if you are receiving a monthly income. But if you are getting lump-sum at one go then you can opt for liquid funds for parking the money. In this way, you would save yourself from placing large bets all of a sudden into equity funds and can get the benefit of rupee cost averaging.

5 Reasons to Invest in ELSS

Most of the people start thinking about saving tax in the month of January. As there are plenty of tax saving instruments available in the market, here we would tell you why Equity Linked Savings Scheme (ELSS) or tax saving/planning mutual fund schemes are the best tax saving option for you. Let’s Understand the top 5 reasons to invest in ELSS.
Equity-linked savings schemes, commonly known as ELSS, are mutual funds that primarily invest in equities. ELSS offer higher returns due to investments in the equity market, along with dual tax benefits under Section 80C of the Income Tax Act.

Tax Benefits:

Under Section 80C of the Income Tax Act, 1961, you can invest up to Rs. 1,50,000 in ELSS to claim deductions on Income Tax.
Apart from this, you get tax-free capital gains and dividends up to Rs1,00,000 annually (as proposed in Budget FY19) for investments held over a year. For long-term capital gains (LTCG) over Rs1-lakh, you need to pay 10% tax.
If you fall in the 20-30% tax slab, you can end up saving a good amount every year by investing in ELSS.

Lock-in Period:

All tax saving investments typically come with a mandatory lock-in period. When you compare the lock-in of instruments under Section 80C, you’ll see that the popular PPF has a lock-in of 15 years, NPS is locked-in until you’re 60, others have lock-ins of 5+ years, but ELSS has a lock-in of just 3 years!

Read: ELSS vs. PPF vs. ULIP: Which is a better tax Saving Instrument for 2019?

Returns:

ELSS or tax-saving mutual funds invest primarily in the equity markets and thus have the potential to deliver market linked returns. ELSS has proved to give returns of 14-16% annually, especially on long-term investments. This would help one achieve their financial goals and create wealth at the same time.

Minimum Investment:

You can start investing in ELSS funds with a minimum amount of Rs. 500. There is no maximum limit. This way you can invest in smaller amounts while gaining the benefits of ELSS. SIPs (Systematic Investment Plans) help invest pre-decided amounts every month with discipline. Since there’s a lock-in period of 3 years, if you start a SIP in Equity Linked Saving Schemes, the returns for your SIP amounts will be generated every month after 3 years of the first investment.

Availability of different options:

The mutual fund universe is large. There are many ELSS funds to choose from, each offering a diverse portfolio of stocks. You are not limited by just one scheme or plan.

ELSS vs. PPF vs. ULIP : Which is better tax saving investment for the year 2019?

Taxation reduces a considerable part of the income and in order to ensure maximum benefits from any investment, one must always look for tax-efficient investment instruments. Under Section 80C of the Income Tax Act, the government allows an exemption on investment in various schemes and individuals can claim tax deductions of up to Rs 1.5 lakh on such investments. Three such schemes are the Public Provident Fund (PPF), Equity Linked Savings Scheme (ELSS) and Unit Linked Insurance Policies (ULIP).
Equity-linked savings schemes (ELSS) and unit-linked insurance policies (ULIP) are long-term investment products that are aimed at providing equity returns along with tax benefits. ULIPs also offer insurance benefits along with market returns and tax advantages. PPF is more like a voluntary EPF scheme that the government started to encourage residents to save for their retirement. PPF is a debt product issued by the post office.

ELSS:

Equity Linked Savings Schemes or ELSS is another type of a Mutual Fund which offers tax exemption under section 80C of the Income Tax Act. These Schemes Invest in the majority of their corpus in Equity Market. Since the returns from such schemes are market-linked, the performance of these funds depends on the stock market and individual stock holdings in a particular ELSS.
Features:

• Three Year Lock-in Period
• Tax Exemption up to 1.5Laks under section 80c of Income Tax Act.
• Higher Risk and Higher Returns
• Growth schemes and dividend schemes
• Low Expense Ratio
• No maximum amount cap in ELSS but, contributions made up to Rs. 5 lakh only are exempted from tax
• On completion of the 3-year lock-in period, one can still continue to invest in the scheme

ULIP:

Investments in ULIPs are eligible for tax deductions u/s 80C and the maturity fund value will also be tax-free provided the sum assured (SA) of the policy is more than 10 times of the annual premium. If SA is less than 10 times of annual premium, no tax benefits will be available. However, death benefits are tax-free in the hands of a nominee, even if the death occurred before completion of five years from the date of purchase of the eligible ULIP policy.
Features:

• Five Years Lock-in Period
• Tax Exemption up to 1.5Lakhs under section 80C of Income Tax Act
• Higher charges
• Can invest in Debt or Equity, depending upon your risk appetite.
• Switch facility: Can switch from debt funds to equity funds 

PPF:

Public Provident Fund Scheme or PPF is a long-term investment instrument introduced by the government to encourage savings for providing security to people in old age. Any resident Indian citizen can open a PPF account. PPF account can be opened for minors also with either of the parents or a legal guardian jointly.
Features:

• Low Risk
• Fifteen Years Lock-in Period and can be extended indefinitely for blocks of 5 years maturity
• Minimum investment amount in a PPF account is Rs 500 per annum and the maximum amount that can be deposited in a year is Rs 1.5 lakh
• Under section 80C of the Income Tax Act, one can claim deduction up to Rs 1.5 lakh for the contribution made towards PPF
• Low Returns, as the Investments are made in Debentures.
• Only one PPF account can be opened
• Partial Withdrawal is allowed after 6^th

Conclusion: Debt yields are falling consistently and PPF rates change on a quarterly basis. Of course, PPF returns will also be revised upwards with rising in interest rates but that is a remote possibility with inflation at such low levels. The power of compounding works perfectly in case of ELSS and ULIP. In case of PPF, with 8% annual rate of return, your long-term wealth creation is restricted. Between ELSS and ULIP, ELSS is better as because of low Lock-in Period and Low Expense Ratio.

Are You Procrastinating Important Financial Decisions?

Here is the Cambridge definition of the word ‘Procrastination’ – To keep delaying something that must be done, often because it is unpleasant or boring. The definition highlights two important aspects – 1. The thing which is being procrastinated is important 2. The thing which is being procrastinated can be boring. Let’s dwell upon financial procrastination. Now the investment decisions can be boring for someone; however, they can be interesting for some other. However; I am sure you would agree that the Financial Decisions are necessarily important for all of us. The fact is; in the list of things which are highly procrastinated; Investment decisions would be among top few.

Which investment decisions are procrastinated:

The investment ‘decision’ or the ‘act’ that are neglected can be seemingly trivial or at times they can be substantially important. Whether the decision/act is important or trivial, the reason given for not deciding or not acting is definitely trivial. Here is a list of tasks / decision avoided or procrastinated. The list is representative
1. Tracking monthly expenses
2. Important investment decisions such as investing for Retirement planning
3. Postponing monthly recurring investments such as SIP
4. Avoiding preparing a ‘Will’
5. Procrastinating a Financial Plan or implementation of a Financial Plan
6. Postponement in buying Risk Cover (Health, Life etc)
7. Organizing the important financial documents
8. Repayment of dues on credit card

What can be the cost of procrastination:

Often, the cost of financial procrastination can be calculated in absolute money terms. However, sometimes it is beyond that. The losses due to avoidance of timely financial decisions can be wastage of time, mental harassment, laggard in achieving social status etc. Here is a list of some specific losses –
• Imagine you haven’t bought a Health Insurance and a family member is hospitalized due to some medical emergency. You would rather liquidate your investments and pay the hospital bills. This can eat out your savings of last 3-4 years and you may have to start saving all over again.
• Delay in regular savings can have a large impact on your assets in the long term. Here is an example of a delay in starting a SIP. Suppose you start a SIP of Rs 10000 per month, the rate of interest is 12% and the investment period is 20 years – the total amount accumulated at the end of 20 years will be 98,33,075. However, in case you delay this SIP by 8 months then the with all equations remaining same the amount accumulated will be Rs 90,10,450. This means the delay of just 8 months in starting a SIP of Rs 10000 can cost you approx. Rs 8 Lakhs.
• Not buying Term Insurance or not making a ‘Will’ can have a lot of mental trauma in case the bread earner dies. The family can be in huge financial crises. Not making a ‘Will’ can have an impact of asset distribution to the legal heirs.
• Not getting the Financial Planning done in time can have a substantial impact on the amount required at the time of the goals like education of children or your retirement.
• Simple things not keeping the important documents well organized can cause a lot of time loss.
• You may get in the vicious cycle of exorbitant interest payment in case you do not pay the Credit Card dues in time

This is what you can do to avoid procrastination in financial decisions or the Financial tasks:

• Sometimes procrastination is a habit. Sometimes it is because the decision or the tasks are not attractive enough to be performed immediately. You have to constantly train yourself that the boring decision and tasks are good in the long run. So you have to complete the boring tasks first and then the exciting ones.
• Most of the times the times required of taking these important financial decisions or completing the financial tasks is very small. However, the time spent just on thinking about completing the tasks can be substantially high. Constantly instruct yourself that by spending a small time (in taking an important financial decision or in completing the important financial task) you will get benefited in a big way.
• Celebrate after taking the financial decision or after completing the financial decisions
• Don’t wait for taking any financial decision or completing the task. Instruct yourself the deadline is ‘now’, else you will incur huge losses
• Prepare a Checklist of Important Financial Decisions and Important Financial Tasks. Share this list with your spouse. Both of you together should accomplishment of each task in the list.

Financial Planning is nothing but changing the way of living. By taking a small step you can pave a way towards a bright tomorrow. Do write your feedback in the comments below.

What is Family Office?

It is said that you need to experience certain things to understand them thoroughly. Any office is one such place where certain things are inevitable. With an office comes discipline, skills of the staff working there, equipment in an office, office ambiance, processes etc. An office works efficiently by having all the above things in place. Results of any activity are profound with the help of all the above parameters.

Our personal lives (usually) have no scope for an Office to be a part of it to handle the matters related to the family. Decisions relating to family matters are supposed to be taken by family members together. These decisions can be about the marriage of a family member, about an important thing to be purchased, about the major decisions in business, about court matters, or it can be about money and investments, or there can be some more to this list. All these major decisions are taken by the members of the family by discussing the topic with each other thoroughly.

As we are progressing, with the advent of technology, the day to day living is becoming easy. We have all modern amenities ready to serve us. But with this progressive life, has some curse with it. Most of us are not finding enough time for personal and family activities from our daily professional routine. The family members are not able to get together to discuss important family issues.

If a family or the member of that family has free time for the family matters, they lack the expertise to decide and execute important decisions. Though the internet has made all the information readily available to us, it is very difficult to separate right and wrong information. There is a lot of misleading information available on the web. So, this information may not always be useful to take the right decision. A family is not expected to be a disciplined entity like an Office. You can’t expect family members to deal professionally with each other. It also means that family members may not be able to professionally decide on family matters without being emotional about the task at hand. This probably requires someone else who is not emotionally attached to the task at hand and who is skilled enough in the matter. This brings us to one point – there may be the need of one such entity which can take care of the family matters, decisions that are professional, unbiased, without any emotions into it and involving the skills.

Here is the solution. Those families which are finding it difficult to manage their Personal Finance and related activities can look forward to a Family Office to- plan, manage and execute all such important practical tasks.

The tasks liked Financial Planning, Wealth Management, Succession planning, Insurance planning, Accounting, Debt (loan) Management are interrelated. But if the Family Office is not in place, the family has to deal with a different office (and different person) for each of the above services. It is obvious that any family would not find it convenient in dealing with all these offices separately. So basically, Family Office is an entity that provides together, the services of an Investment Advisor, Financial Planner, Accountant, Lawyer, Insurance Advisor etc.

Though the concept of Family office is relatively new in India, it is being offered in many cities, especially in Metros. However, most of these family offices serve only to Ultra HNI Families. These Family Offices working for Ultra HNI families focus prominently on Investment part of it. They usually advise families on non-traditional investment alternatives such as Private Equity, Start-Up funding, Alternate Investment Funds and so on.

When a Family Office service is provided to more than one family it is called as Multi-Family Office. If a Family Office provides service only to one (Very Wealthy) Family it is called as Single-Family Office. Single Family Office needs is affordable only to a few who’s who in the country. In some cases of Ultra HNI Families; the family themselves manage the Family Office. They recruit skilled staff for managing their Family Office.

The point is; does only Ultra HNI and HNI clients need these services which are provided by a Family Office. Or Higher middle Class and Middle Class may also need these services? The fact is; every family small or big; HNI or middle-class, needs these services. The issues is not many such service providers (Family Offices) are available today. Especially Tier 2 cities are missing these services big time.

Simple Financial Plan could change Portfolio from 4.44 L to 82 L in 3 years

About 3 years back, a well-established architect friend of mine has been avoiding getting his financial plan done at least for the last 2 years. During this period, he saw me working on plans of many of clients. Being a friend I did not want to mix friendship and profession, hence I never insisted him on getting the plan done; however, I never missed an opportunity to dwell upon the importance of planning to him and his family. Finally, the D day has come and golden words came from his mouth. During a cup of tea my friend announced ‘I want to do my financial Planning.’
He being a friend of mine, I had a fair idea of his finances. Still, we together decided to go ahead with the process as led down by my firm. So, we entered into an agreement and signed the Letter of Engagement. I handed him the Financial Planning Questionnaire. He and his wife, who by qualification was a Chartered Accountant, though not practicing. Both of them completed the questionnaire religiously and handed back to me.

When we started working on it, following were major observations-

o He had erratic Cash Flow. No discipline here.
o HIs monthly income was strong, but not put to use and properly accounted
o Most assets were in Real Estate and Chit Funds.
o He had numerous Insurance Policies, most of them were Endowment and Moneyback
o He had no Loans
o Approximately 37 Lac rupees of his consultancy fees outstanding in the market
o His Stocks and Mutual Fund portfolio of Rs 4.44 Lakhs

These were the issues identified by us-

o My friend was in dier need of developing the money discipline
o His Asset Allocation was skewed
o No planning for future goals, leave aside Retirement corpus
o His was protected with an insufficient amount
o His liquidity situation was a concern

His strong points were –

o He had a strong incoming Cash Flow and Surplus
o Conservative approach towards lifestyle expenses
o Willingness to change the habits

One important thing which we have noticed is that he mostly used to work for builders. There were instances when builders offered him a Flat/s in their schemes against his fees. The cost of flats was higher than the fees he was supposed to receive. Now, this friend of mine had outstanding to be paid to the builders.
Moreover, he had a large amount of fees to be recovered from his clients and this trend was sharply growing.
For us this was a clear case of money indiscipline. We have chalked out of definite ‘plan of action’ to change his basic habits. His wife being an accountant, things went quite smoothly.

Broadly this is what we wanted to change-

•  Stop his shopping of real estate
•  Cultivate a habit of recovering his professional fees as per the terms and not adjusting this fee against any other means
•  Clear the dues outstanding to be paid for the flats he has already booked. This was adjusted against the fees outstanding in the market.
•  Start investing the surplus income in appropriate Mutual Funds for his life goals
•  Chalked out corpus requirement for his retirement funds and provide for it
•  Work on his insurance needs and streamline his existing insurance policies

It’s been 3 years since we have worked on his Financial Plan. When we started his liquid investment portfolio was worth Rs 4.44 L. We could create an Investment portfolio consisting of 70% Mutual Fund (70% allocation to all type of Mutual Funds put together) + Stocks (10% allocation) + other (20% allocation)- Real Estate excluded. The portfolio sized to Rs 82 Lakhs without accounting for the growth in the portfolio. We had could generate total 82 lakhs now channelized to the right Assets and each investment properly assigned to a goal. He is insured properly. Most importantly he has peace of mind. He is now nicely placed in terms of his liquidity. He has started earning better returns on his investments. We kept of reviewing his financial plan and his investment portfolio for life changes during this period. This has paid off well.
Ironically, now my architect friend no more wants to invest in real estate.

Nifty breaks Head & Shoulder Neckline

After long I am writing on Nifty. There is a reason to do so - Nifty breaks medium term up-trend.
Nifty breaks below trend line as well as Head & Shoulder neckline.
As you can see in the daily chart below, the breakdown has come about with good volumes. Bears have a clear edge over bulls.
What can be done now-
Nifty is approaching the next support between 10100-10040. So it would not be wise to short at this moment. One can expect a bounce from the support. If the bounce comes about, Nifty can move up to its resistance near 10300-10350.

With this movement, we can assume that Nifty is in medium-term downtrend.
The same is also confirmed by the cycle change from 'higher top higher bottom' to a new cycle of 'lower top lower bottom'. The new cycle of lower top lower bottom is expected to continue for some time now.
If Nifty breaks below 10040, next major support is near 9750.

For more on medium-term safe investing using Technical Charts visit
www.bonvista.in

Chart curtsy- Sharekhan Trade Tiger

Bharti Airtel - Long Triangle breakout

Bharti Airtel- Long Analysis

Bharti Airtel is a second giant experiencing a similar breakout after a triangle consolidation for pretty long period. The earlier breakout was by Reliance Industries around a year back. I had written a post during the breakout phase on Dec 27, 2016, in Reliance Industries. Reliance Industries doubled since then. Below is the link of that post-
Reliance Industries Ascending Triangle

First picture below is a Quarterly Candlestick chart. I love using Monthly and quarterly charts. They give a clear picture at a larger scale. Once we get this helicopter view, we understand what is happening and what can be expected in the times to come.
You can see below that the stock has formed a long triangle beginning in Jan 2007 and since then was trading in the consolidation till Sep 2017. Since the period is too long and the chart we are considering here is a quarterly chart, the low and high of the consolidation too is large. The base of this consolidation is around 260 and the top is around 500.
The triangle went narrow during the quarter ended Sep 17. Finally the stock broke out of the consolidation in Oct 17. You can see on the chart when the quarter in ended Dec 17 formed, a huge green candle supported by increased volumes.
I have also produced a Line Chart below to understand the picture more clearly.

Current markets pressures have brought the stock back to its breakout levels of around 425, where the stock is currently trading.

The stock after breaking out has corrected to test the level of breakout, as it usually happens in most breakout examples. This is an entry opportunity.
I have produced a weekly chart below which is showing the origin of breakout and how it is currently trading near the same level after a fall of around 20%. This fall brought the stock back to its support near 424 which also the origin of the breakout.
We have experienced that this is an opportunity to accumulate the stock. 
This zone is between 424 to low of around 380. If the stock fails to sustain above 380, we may consider failure of the pattern. Remember that the patterns can fail, not usually though.

The stock has a potential to move from this level and the gains can be handsome. Though we can not predict the targets we believe that the stock can achieve first possible level of 530 and then 650 and then 840. 

Chart Credits: Sharekhan Trade Tiger


Disclaimer: The contents produced here are purely for educational purpose. They should not be construed as buy/sell recommendations. I am not a SEBI registered Analyst or Investment Advisor. Readers are advised to consult their Investment advisor before taking any decisions based on above write-up. 

Learnings of 2017 - 'Musts' being an Equity Investor

• Believe in your 'theory'

• Do simple things, simple analysis

• Do 'short term trading', if you have qualities of a 'Sky Diver'

• Method of analysis is last thing, first is approach

• Choose your investing time frame

• You are different than others, so is your investing style

• If you rely on someone else's analysis, do so wholeheartedly

• Reduce the sources of information

• Invest in business, if you are a long term investor

• Trade on price, if you are a relatively short term (may be up to one year) trader

• Fundamental analysis is good, but very few understands it

• Technical analysis is good, but very few can implement it

• If you are not making money in markets, take a break, learn

• If you are loosing money in markets, take a larger break, learn

• If you are new, don't start with intraday / Options / Futures

• It takes time to learn making money in markets, period can be upto 5 years

• Stay away from free tips

• Do not try to cross check one's recommendations with some one else, if you believe act, else leave 

Update - Intellect Design Arena - Change in Trend

We had analysed Intellect on 6th November 17. The change in trend has nicely panned out so far. The stock has moved from 147 then to 183 so far. Keep watching for further updates.

Below is the article reproduced for your reference.

Intellect Design Arena - Change in trend

Intellect Design Arena (INTELLECT)

Short Analysis-

The stock has been correcting since last about 10 months. The quantum of the fall is about 65% from its top. The stock has good support near level of 97-110. This support was created when the stock had given a breakout in July 2015.

In Aug 17 the stock reached back to the same level of around 97-100. You can see the trend line marked on daily and weekly chart. This trend line was acting as resistance and was not allowing the stock to move beyond. During the week ended 15 Sep 17 the stock broken out this resistance. That was first symptom that the stock can change its trend from down to up. During last week (Ended on 3 Nov 17) you can see increase in volumes and bullish candles formation on chart.

Expect the stock to continue this uptrend. 

Daily Time Frame

Sudarshan Chemical - Flag Breakout

Sudarshan Chemical-
This stock has seen run up from 134 to 454 during June 16 to Sep 16. This phase has formed pole of the Flag pattern. After this run up the stock went into consolidation between Sep 16 till Dec 17. This phase has formed Flag portion of the Flag pattern. You can seen on the monthly Candle chart below the Flag marked on the chart.
On 4th Jan 18 the stock has broken out of the Flag consolidation. On monthly chart the the stock is seen forming a nice bookish pattern showing a breakout of of Flag pattern. Only catch here is that the monthly candle is yet not finished as its the candle of Jan 18 and Jan 18 will be over only on 31st Jan.
The pattern gives us a target of 660. Lets hope that the stock reaches this level. Time period expected for stock to reach this level is 5-6 months.

Update - Up Flag formation- Time Technoplast

Time Technoplast had an up Flag formation on 17 March 17. I have reproduced below the article of analysis done on 17 March. The up Flag formation in Time Technoplast has made the stock move from the then price of 116.45 to 208.9 today. That's a gain of 79% from the recommended price of 116. Keep reading this blog for more such analysis. 

My analysis is based on simple thought process. As all of us know that one has to have patience in stock markets, so is the case here as well. However, my thrust is on taking minimum risk. A CAGR of 40%-50% is what I look forward to. I thrive to have stocks in my watchlist and pick them up when I feel they are ready for an up-move.

Below is the article written on 17 March 2017 on Time Technoplast

Up Flag formation- Time Technoplast

Time Technoplast is a company manufacturing plastic products like Drums, Containers, Conipails, Petsheets etc.

This analysis below is on weekly chart. You can see that the stock was in consolidation phase since Sep 2016. This consolidation was in a broad range of 88 to 100. The consolidation has come after an expansion period which took the stock price from 49 to 100 in period of approximately 9 months.
We know that the periods of expansion are followed by consolidation and so on.
We can expect that the current period of consolidation is over and stock is ready for phase of expansion.

Update - Wockhardt Pharma - Accumulation in progress?

You might recollect analysis of Wockhardt Pharma on October 9, 2017.
 The accumulation is usually followed by a sharp rise in price, as was mentioned in the analysis.

The stock is currently trading near 880. On Oct 9, at the time I wrote this analysis, the stock was trading near 635. Enjoy the gains.

Reproduced below is the article on Wockhardt Pharma written on Oct 9, 2017

Wockhardt Pharma - Accumulation in progress?

Wockhardt Pharma - Short Analysis

Wockhardt Pharma fall from its high in Apr 2015 is almost 80%. That took the stock to an attractive buying price with an 80% discount. Currently stock is trading near 635. Many would want to accumulate this share at current price. This is precisely what is seen on the chart. After a mega fall there is a consolidation on chart. This consolidation might be due to steady buying at currently levels. This buying may take the stock to higher levels.
The next hurdle is at around 830. If the stocks breaks this hurdle successfully, the next one is around 1250.  This might take couple of years.
I would trade this stock with a loss exit of around 540.

Ajanta Pharma - Bulls in action

Ajanta Pharma Ltd.

Briefly, Fundamentals about the company-
Company is in manufacturing drugs.
Company has almost zero debt.
Stock is now trading at a PE of 27.
Company has been consistently making profits and the profit growth is 49%

Technical Analysis-
The first chart below is a daily chart showing the chart area between Aug 2014 till date.
You can see a horizontal line marked on the chart. This line acts as a support. This also means that buying was expected to start near support. Rightly so the stock bounce up from the level of 1130.

The second chart below is also a daily chart showing a closer picture. We know that stock moves in repeated cycles of downtrend, sideways trend and uptrend. Once the uptrend starts it is expected to continue for some period of time.
You can see similar Cycle of LTLB (downtrend represented by Lower Top Lower Bottom) followed by a Sideways Cycle and then beginning of Cycle of HTHB (uptrend represented by Higher Top Higher Bottom).
A breakout on 20 Nov and 8 Dec are confirming the start of upward trend.
This is also confirmed by the improved volumes on chart.

Last chart below is a monthly chart. The stock has fallen from around 2120 to level of 1130. This is almost 50% fall from its top. We can assume that the correction cycle of Ajanta pharma is now over and the uptrend started may continue for substantial period to come.
When I wrote this article, the stock was trading near 1445. If one starts accumulating the stock at current  level and wait for period of 1-2 years can reap returns of 70-80% on amount invested.