My Portfolio - Stocks - Updated on Nov - 2017

My Portfolio - Stocks - Updated on Nov - 2017

I am preferring to buy the stocks through Value Investing (Fundamental Analysis).

Here-now, i wish to report my portfolio - Stocks which is updated on November, 2017

 























You can notify that, my investment goes in different sector like Banks, Pharmaceuticals, IT - Technology, Automobiles. I have been heavily invested in Technology about 40 percent with the shares - HCL and Infosys (Infy) and the lowest in Paints with Berger Paints - 1.75 % I am also looking to invest in Energy, but not now with the current valuation.

Result Session:

• As on November 30, 2017 - My Portfolio (Stocks) returns with 10.22 %  (2017-18)

• Past three years (Financial) returns are: 10.43 % (2015-16), 12.51 % (2016-17), 10.22 % (2017-18).

• Currently, 8 of 10 stocks are Advanced (Profit) and 2 stocks are declined (Loss).

• On my stock portfolio, NALCO performed with the highest returns of  (106 % ) on my investment and the lowest with TATA MOTORS (-12 %) loss.

• I believe that Tata motors are at good valuation and will make profit on a long term investing.

Kindly share your views / comments with a smile :)

Rich Investing - www.richinvesting.blogspot.com

My Investment portfolio - updated as on Oct - 2017

My Investment portfolio - updated as on Oct - 2017

I am believing the Investment Portfolio objectives is the crucial thing not only for the wealth creation, but also gives the detailed knowledge on Investment opportunity.



Here is my Investment Portfolio ( Updated as on October 31, 2017)

I am also believes that my realty side depends on my father's asset (Non-cashflow). So this is my diversification too, rather than spending my money for owning a home. It's hard to me that i am not interesting to invest in Gold, but may consider in future. I am looking for an alternative investment(s) in the upcoming days.


On the above pic, i had mentioned the debt securities splitted as 'Debt mutual Funds' and 'Bank Deposits' and you can note that my majority of investment is behind on my Retirement savings (PPF, NPS).

Thanks for the SEBI (Investment adviser) L1 course and exam, it helps me to extract the knowledge of Asset allocation and Investment strategies.


My Financial Investment objectives are like:

• My Family Retirement planning
• My Kid's Education and other goals
• My Future Business plan
• Retire Early plan (REP)

You can also share your views / comments on this post.


Rich Investing with my investment portfolio.

#myportfolio

Set your own Budget Planning

Set your own Budget Planning

Hi, welcome to - "How is my Budget Planning today ? "

We all have a Budget or may not :)  But, we have an expense and less over savings or investing. We often like to watch the Government's Union Budget and finding the pros and cons for ourselves. If someone asking you, what's your budget planning today ? Then, it seems a different for us, even we ask ourselves. How many of us have a personal budget planning today ?

A Question with triumph !

Of course, most of us don't have the plan to initiate for the Personal opinion, on Budget Planning and also we haven't experience that on results. We are always discussing or gossiping about the Government's fiscal deficit and how we can see our self debt on finance ? Self Financial analysis also an important one and it should be primary than any other, to make Financial planning and be Financially free.

Why i need Budget Planning ?

• Track our Daily Income / Expense.
• Track our Needs and Wants.
• Plan for the Emergency required and unexpected one.
• Prepare for our personal Financial Goals and Retirement savings.
• Financially, we can grade our values.

How to set your own Budget Planning:

• Buy a new Note book (or) download the Expense manager app or related one.
• Input your daily income, expenses and savings.
• Track you monthly reports on Income, Savings and Expenses.
• Do it regularly - After completion of 3 months, you have a PQFR (Personal Quarterly Financial Report).
• Now, you can have an idea on your PQFR that,  what is your income, where your money spending and how is your savings or investing.
• You can do the same PQFR analysis for Half yearly, Annually.

(Image source: unsplash.com/@stilclassics )

Post Analysis:

On our Personal Quarterly Financial Report (PQFR), we can make or set our own budget planning like how much money need for the monthly fixed expenses, and how can we increase our savings, what is the opportunity lies for our secondary income.

Use, the Super Budget 50:30:20

• 50 % Needs of our total monthly income
• 30 % Wants...
• 20 % Savings / Investment...

Let's ready for your own Budget setup :)

Rich investing !

Adjusted Returns on Investment

Adjusted Returns on Investment

If someone asking you,  What is your monthly pay check or Salary ?

Then, we are hesitated to tell or show the exact numbers on salary, even after our deduction from salary :) . We are thinking about that we are protecting our income numbers !

That's not a matter, either showing the pay slip or not. But, on our Investment info, we have to be careful about the returns on numbers we earned it. We just enjoying to show this much returns i had on my investments or I had a profit of XXXXX from my investments. But, do you know what is your real returns received on your hand ?

Returns on Investment can by type of:

1. Inflation Adjusted
2. Tax Adjusted
3. Risk Adjusted

From the previous article, we have seen that about the difference between Real Rate and Nominal Rate of Return. It clearly indicates that we must aware about the Inflation, it hurts our retirement planning and Goal based investments.

For Example, 

If our Return is 10 % from the investment amount of Rs. 100 /- then our Nominal return amount would be Rs. 10 /- but it should be Adjusted by Inflation. If inflation @ 4 %, then our real rate of return is:

(1.10 / 1.04) - 1 X 100 = 5.76 %



Tax Adjusted:


It is the return earned after taxes paid. It also hurts you on paying taxes from your earned income or returns, so reducing the return ratio that comes to your hand.

Usually, Tax Adjusted Returns are lower than the Nominal Returns due to the tax have been paid.


For Example,


If we had a return of 10 % by an investment amount of Rs. 100 /- and the Tax implication at 30 % (Higher), then

Earned Interest Rate - 10 %
Tax to pay                 - 30  % of Rs. 10 =  Rs. 3 /-  [ i.e  10 X 30 / 100 = 3]

So, our Post Tax returns would be approx. 7 %

We can go through this below formula for Tax Adjusted Returns:


Tax Adjusted Returns (TAR):   Earned Interest Rate X (1 - Tax Rate)


10 % X ( 1 - 0.30) = 7 %


Why we need to do this calculation ?

When you are going to choose an investment product, we have so many products like Bank FDs, Bonds, Stocks, Mutual Funds, Realty, Gold, etc. We should aware about our Tax Status also to get the Real rate of return.

Suppose, A Bank FD pays you 8 % per annum and the Tax Free bond gives you 7 % p.a, and the Stock pays you 10 % Dividend yield for your investment amount of Rs. 100 /-


Post Tax Returns are:

Bank FD           -   5.6 %   (After Tax bracket of 30 % at higher)

Tax Free Bonds -  7 %    (Totally Tax Free)

Stocks               -   10 % (Dividend is free on investor's hand)


Tax Adjusted Returns are depend upon the investor's Tax Status. So we can compare the different type of investments and put our money on good-self.

Risk Adjusted:

It depends on how much risk we can make on our investments. Usually, Higher Risk indicates to High risk adjusted return, so he will be able to earn a higher return. The Risk Free rate of return is also followed, where the Risk Adjusted returns have the excess return. Excess Return is used to calculate as the excess of the investment return over this risk free rate. Technically in financial markets, there are two types of Risk Adjusted Ratio (measuring) are,

• Sharpe   Ratio
• Treynor Ratio

It really helps the investors' to pick up the investments based on Performance or Rank wise

Be clear on your Adjusted Returns next time :)

Great Investing on richinvesting.blogspot.com

Investment Returns - Real Rate vs Nominate Rate ?

Investment Returns - Real Rate vs Nominate Rate ?

Which one is better for my investment, Real Rate or Nominate Rate ?

Basically, the return on an investment defined on a Nominal Rate.

So, we have to know, what is a Nominal Rate of Return:


A Bank Fixed deposit gives you a 10 % interest (per annum) for your investment. Then, the nominal rate is also 10 % as it reflects the same. So, there is no need for any deduction from the interest bank pays you.

When the Nominal rate is adjusted with the inflation rate is known as, "Real Rate of Return".

The Real Rate of return helps the investor(s) to adjust with the inflation and getting to know the exact returns on your hand. Let us see the example,

A Bank FD gives you a 10 % interest (p.a) and the inflation rate is at 4 %, then the approximate real rate is:

  Nominal rate of return (or) Interest Rate - Inflation Rate

10 % - 4 % = 6 %  (An approximate real rate on easy calculation)

Effects of Real Rate of  Return:

• Usually, the Nominal rate is a Simple rate (Interest rate), which is always a Positive Rate. But, the Real rate can be Positive or Negative, due to the inflation adjustment. If Inflation rate is higher than the Nominal (or) Interest rate, then it will gives you a Negative rate of return. So as an investor, we should aware about the inflation rate and we cannot simply go with the bank what pays.

• The time value of money reflects the real rate of return. If an investment earns a nominal rate, that is the rate at which the money is being compounded. However, if inflation reduces the actual value of investment cash flows, the value of these returns are discounted by the Rate of inflation. So, we have an idea for the Real Rate of return with a formula,

((1 + Nominal Rate) / (1 + Inflation Rate))  -  1


Lets see,

Nominal Rate:   10 % (i.e FD interest rate)

Inflation Rate:    4 %


(1.10 / 1.04) - 1   =  5.76 %  (As we seen it earlier, approx: 6 %)


The Effect of Real Rate helps in Goal Based Investments, Insurance and Retirement Planning and we can now know the exact rate of amount receive on hands.


Great Investing !

How is my Budget Planning today - April - June 2017 - PQFR

How is my Budget Planning today - April - June 2017 - PQFR

As we had discussed the 'Budget Planning' in the past two posts. Here now, i am keen to submit my PQFR (Personal Quarterly Financial Report) for the Quarter - April - June 2017.

Set your own Budget Planning

How to set a simple Budget Planning 2017

The report below created by me, is based on the Super Budget 50:30:20

On the report, my fixed expenses are vary due to Medical costs and grocery items on my relative appearance :)  kindly note that i mostly maintain the savings / investing above the Super Budget terms with 30 percent plus. I believe in savings / investing for my child and for the Retirement. So, it would insist me to Retire Early :-)

You can also do the PQFR yourself and go further with honest :)

If you interest to share any comments, i wish to listen for that

Rich Investing with PQFR !

How to Calculate Annualized Return on Investments

How to Calculate Annualized Return on Investments ?

Previously, we had discussed about the Absolute Return on Investment, to calculate how our Invested money performing and seen how it differ from in terms of rupees as Absolute. Here, we can see to calculate the Annualized Returns on our Investments.

Annualized Return can be computed as Percent (% p.a) per Annum. We can measure the returns by these method, is the better and accepted way to measuring the Investment Return. The basic purpose of Annualized Return is to standardize the investment period as though each investment was made only for One year. It helps to ease comparison of investments across Time periods.

Annualized Returns can be denoted as [ % p.a ], otherwise, it is usually an Absolute Non-annualized return. 


Annualized Return on Investment:

(Return on Investment / Original Investment) X 100 X (1 / Holding period of investment in years)

Or 

in simple terms,  ((End value - Beginning value) / Beginning value)  X 100 X (1 / Holding period of investment in years)

To annualize, the absolute rate of return is multiplied by the following factor:

• 365 / Number of days that the investment was held
• 12 / Number of months that the investment was held
• 1 / Number of years the investment was held

If Akhil invests the amount of Rs. 1 Lac in a 6 month bank FD (Fixed Deposit) that the interest rate gives 7 % p.a. Then, the annualized return,

He receives the maturity amount with the investment:   Rs. 1,03,440 /- (Invt: Rs. 1,00,000 plus interest - 3440 yearly compounded for the 6 months)

 

(If compounded half yearly,  then it will be Rs. 1,03,500 /-)

What exactly happened here...

The annualized interest rate gives 7 % p.a and the holding period is 6 months i.e. 1/2 years. So, the absolute return is 7 X 1/2 = 3.5 %

Actually, the return gives 3.44 %  but, the rate is calculated by adjusting the return for the fractional period.  In general, for an 'N' month deposit, interest earned equals to Investment amount X (rate) X (N/12).

Mostly, Annualized Returns can be viewed for the Bank Fixed Deposits, Mutual Funds to see the performance on Returns.

If you have any comments related on this post, kindly share here...


Rich Investing - An Investment Thought to create Wealth

How to Calculate Absolute Return on Investment

How to Calculate Absolute Return on Investment ?

Return on an Investment is a calculation to assess how the investment is performing. As every investment have a group of Inflows and Outflows. The Comparison of the inflows and outflows is the Return for the investor from making the investment.

Returns may be Positive (+) or Negative (-). A Positive denotes the profit on an investment and Negative gives the loss.

For eg:

• Akhil bought a Real estate property for Rs. 30 lakhs and sold it to Rs. 40 lakhs

• Suresh bought a 100 shares of XYZ Company with the amount of Rs. 20,000/- and sold all the stocks for Rs. 15,000/- 

The above example tells that Akhil had a profit of Rs. 10 lakhs i.e the return on investment is Rs. 10 lakhs. Suresh had a loss of Rs. 5,000/- from his stocks. So, it denotes the Negative Return on his investment. 

Measuring Investment Returns:

• Returns can be measured by comparing the amount of Inflows and Outflows for the investment made in Absolute Rupee Terms.
• Returns can be computing a rate of return by comparing the Inflows and Outflows.

On Absolute Rupee Terms, Akhil had a net return (Profit) of Rs. 10 lakhs, and Suresh had a Net return (Loss) of Rs. 5,000/-.  Here we are going to compute the rate of return by using the Absolute Term.

Absolute Return:

                                                             (Image Credit: licdn.com)

The Absolute Return on an investment can be computed:

(Return on Investment / Original Investment) X 100

Or 

in simple terms,  ((End value - Beginning value) / Beginning value)  X 100

So for the above example, Akhil had a profit of Rs. 10 lakhs,

Absolute Return =  ( 10,00,000 / 30,00,000 ) X 100  =  33.33 % 

Absolute Rate of Return for Akhil is:   33.33 %

Now, Suresh had a loss of Rs. 5,000/- and the absolute return is:  - 25 %

( 5,000 / 20,000) X 100  =    (25 %) i.e  net loss of     (-25 %)

If Suresh have sold his stocks for Rs. 28,000 /- with a Net return (Profit) of Rs. 8,000/- on his investment, then the Absolute Return is:

(8000 / 20,000) X 100 =  40 %

On this term, Akhil had a Rs. 10 lakhs profit on his hand with a Absolute Return: 33.33 % and Suresh had a profit of Rs. 8,000/- and the Absolute Return is: 40 %.  Comparing the two returns, it seems that Akhil had a higher amount of return in terms of Rupees, but he earns a lower rate of return(Absolute- 33.33 % ) than Suresh( Absolute - 40 %).

Absolute Rate of Return is a simple technique and formula for computing the exact returns on an investment, but it does not measure the investment on Holding period. Absolute returns can used to measure such as Sensex, Nifty about the performance of stock market for the period less than one year. For more than one year, we have to use Annualized, Holding period returns and CAGR(Compounded Annual Growth Rate).

If you have any comments related on this post, kindly share here...


Rich Investing - An Investment Thought to create Wealth