Indholdsfortegnelse for December 2023 i Outlook Money

“Most people end up oscillating between two sets of philosophies— living in the present and living for the future. What may work, however, is something between the two A friend of mine and her husband, like a lot of millennials and Gen-Zers, though they are not among them, liked to live in the present. For most of their working lives, the double-income-no-kids (DINK) family chose to live in a posh locality in Delhi, took frequent holidays, tried the best of cuisines regularly, and had a wardrobe full of the latest brands and styles. The cash flow was good, and they could afford all that they wished for, and still managed to save some money. The going seemed to be good. After about 20 years of this lifestyle, my friend happened…

Once you have made a budget and zeroed in on an international destination that fits into it, that's not all the job done. Going on a vacation abroad doesn't just involve having adequate money and ensuring timely bookings, but it is also about planning carefully and protecting yourself against risks. You wouldn't want any setback to leave you and your family in a logjam abroad. While it is mandatory to buy travel insurance if you are flying to certain countries, not all of them have that requirement. But it is crucial to buy travel insurance when you are going abroad, as it provides coverage for unforeseen events, such as trip cancellations, lost luggage, medical emergencies, and others. Some airlines and aggregators have tie-ups with various insurers to provide travel insurance.…

Investors often face a dilemma when it comes to choosing between stability and growth. Large-cap funds are known for offering stability, as they majorly invest in well-established companies with a history of consistent performance. Meanwhile, mid-cap funds are known for their growth potential, as they focus on mid-sized companies. One solution to this dilemma is to buy large-and-mid-cap funds. They combine the best of both worlds, offering investors a blend of stability and growth in a single fund. Such funds allow investors to access the stability provided by established market leaders while also tapping into the growth potential offered by dynamic mid-sized companies. This approach provides a diversified portfolio that aims to weather market fluctuations effectively. As an investor, if you want the stability of a large-cap fund and the…

WEBINAR SERIES In a recent webinar, experts said having conversations and applying innovative ways can help teach children about money concepts Planning for children's future is one of the most important goals for most parents. But what is equally important is inculcating the right financial and savings habit among children so that they can build a secure future for themselves when they are ready for it. A recent panel discussion, organized by Aditya Birla Sun Life Mutual Fund in association with Outlook Money, discussed this important aspect. The topic of the discussion ‘The ABC of Money: Guiding Children'. The panelists were K.S. Rao, head of investor education and distribution development at Aditya Birla Sunlife AMC; Amit Trivedi, an author, speaker, blogger, and trainer; and Shweta Jain, a certified financial planner…

IN FOCUS Queries Many mutual funds (MFs) are not rated. Should ratings be made compulsory for all mutual funds above a certain fund size? How do ratings help choose a fund? Ratings should not be taken as a factor to identify investment opportunity in any mutual fund scheme. There are various independent rating agencies, such as Value Research, Morningstar, and Crisil, which provide ratings for various category of funds based on quantitative and qualitative factors, such as performance, portfolio quality and fund manager track record. For instance, within performance, the ratings agencies may look at consistency of performance in near-term and long-term, or even risk-adjusted performance. While ratings can be good to get a broader understanding, one should consult a financial advisor to get a detailed analysis, including more subjective…

Education has become an expensive affair and the rising cost of higher education is making it increasingly difficult for middle-class parents to provide quality education to their children. The Cost Of A Career in the November 2023 issue highlights and gives solutions comprehensively. I am an expecting father and I found the issue very informative. The high inflation in education is an eye-opener. Thankfully, increasing awareness about scholarships have made it a bit easier for parents seeking education abroad for their children, and even in diverse fields like sports like In Their Own League (November 2023) mentions. Rajesh Nigam, email Social Bonds Social bonds serve a two-fold purpose, both for the investor and the government. The government gets to pool in money from the public to use it for welfare…

HOW TO REACH Take a direct flight from Indian metros to Bangkok. PLACES TO VISIT Bangkok: Visit Grand Palace for a tour of the palace, Grand Palace Hall, Temple of The Emerald Buddha, and Queen Sirikit Museum. Also visit Wat Arun by the Chao Phraya River, Golden Mount, and the Wat Pho temple. Ayutthaya: 75 km northwest of Bangkok, this is the site of the former capital of Thailand. A few iconic ruins here are the Chedi Wat Phra Sri Sanphet, Wat Yanasen, Wat Phra Ram, Wat Chaiwatthanaram, Wat Mahathat, and Wat Ratchaburana. Visit the Chao Sam Phraya National Museum to see the relics excavated at Ayutthaya. Chiang Mai: Old wooden temples, forests, nature parks and mountains, Chiang Mai offers a blend of all and more. Doi Inthanon National Park…

HOW TO REACH Fly to Colombo from any Indian metro. PLACES TO VISIT Colombo: Visit the National Museum, Dutch Hospital, Dutch Period Museum, Old City Hall, Wolvendaal Church, Viharamahadevi Park, Galle Face Green, and Kelaniya Raja Maha Vihara. Lord Buddha is believed to have visited the site of this temple. Don't miss the market. Buddhist Circuit: In Anuradhapura, visit the Abhaygiri Dagoda, which dates back to 1st century BC and Abhaygiri Musuem, Sri Maha Bodhi tree, Samadhi Buddha Statue, Archaeological Museum. In Dambulla, visit the cave temples and the Clock Tower. About 16 km further from Dambulla lies the iconic rock fortress of Sigiriya. In Kandy, visit the Temple of the Sacred Tooth Relic, which houses the tooth of Lord Buddha, and the Dalada Museum. Also visit the Ceylon Tea…

WHO NEEDS IT? • Those with critical health issues, such as diabetes, high blood pressure or other chronic illnesses. • Those who are undergoing treatment or have had treatment or surgery. IS IT NEEDED? • You may be susceptible to health complications if you have a PED. • Cost of medical care is usually expensive abroad. • Lack of immediate care in the absence of adequate funds or coverage can leave you vulnerable. THINGS TO KEEP IN MIND • Evaluate current health status comprehensively before buying travel insurance. • Disclose all health conditions as failure to disclose can result in claim rejection. • Coverage for PEDs varies among policies; some offer with limitations or additional premiums. • Some plans provide specific add-ons or riders for pre-existing condition coverage. • Longer…

Most portfolios are allocated using pure play equity and debt funds. The reason is the contours of pure play funds are better defined. For instance, in a large-cap fund, a minimum 80 per cent has to be in large-cap companies. In a multi-cap fund, minimum 25 per cent has to be in each of large, mid- and small-cap companies. In a corporate bond fund, minimum 80 per cent has to be in instruments rated AAA or AA+. In contrast, in hybrid funds, the definition is about allocation to equity and debt. The details, such as market cap of equity stocks, or maturity and/or credit rating of bonds, are not defined. As a consequence, when you invest in a specialised equity or debt fund, you have a better idea of what…

Investment As small- and mid-caps keep gaining momentum, resulting in the feeling that valuations are quickly getting stretched, a section of investors is keen on accumulating large-caps. Their rationale: balance the scales once again with stocks that are now being considered too tardy to add any meaningful value to portfolios. In the days to come, large-caps are expected to bolster those who have almost entirely focused on the mid-and small-cap segments. The proponents of the logic refer to recent advances recorded by smaller, medium-sized counters, irrespective of sectors. Their prices have gained handsomely, triggering a round of profit booking. This has generally eluded the larger stocks, many of which have appeared slow-paced in comparison over the same timeline. Further, a section of the market has stayed away from large-caps and,…

IN FOCUS Queries I want to invest in the stock market, but don't know how to proceed. What do I do? Investing in markets is not that complicated. What you should critically examine is whether the company, whose stock you are investing in, is in a business which will grow over the next 5-10 years or more, its pedigree, and financials. For example, if you think electric vehicles is the future, you should think of the best companies in this sector, and so on. Even simpler is to invest in the top 50 companies in India through an exchange-traded fund (ETF) or start a systematic investment plan (SIP) in a mutual fund. How can I get access to a company's financial information? What key things should I look for to…

Pune has emerged as one of India's highly sought-after residential destinations, second only to Mumbai. In Q3 2023, there were 22,490 new launches, with the highest 5,678 units in Pune East and 4,350 units in Pune West. The demand for 3BHK and above units surged in Q3, accounting for 27 per cent of online searches. The demand for 2BHK units grew by 43 per cent, whereas it declined for 1BHK units, indicating homebuyers’ preference for larger homes. The demand for residential units in the ₹60-100 lakh range was high at 38 per cent, and properties valued at ₹1 crore and above also saw a slight uptick. On the supply side, 1BHK constituted 56 per cent of the inventory, followed by 2BHK units at 28 per cent. Apartments were the preferred…

Cover Story Every once in a while, Nilanjan Biswan, 46, who is an officer in the Indian Railways by profession and a naturalist by passion, takes a solo trip. He loves those few days of solitude and wanderlust, away from the daily grind of administrative work and household responsibilities of grocery shopping and attending parent-teacher meetings at his son's school. Early this year, he took a whirlwind trip across Cambodia, Vietnam and Indonesia and came back after 21 days with lots of stories and souvenirs. A week before his trip, he saw a documentary on Lolong, the largest saltwater crocodile recorded at 6.17 metres (20.24 feet) long and weighing over a tonne, that was captured around the Bunawan Creek in the Philippines, and the reported sightings of even bigger specimens…

This year, when Moradabad-based Anil Jain and his wife Beena (both 73) visited their son Akshay (39), who works in Bengaluru, in October, the family planned a few outings nearby. The senior couple visit their son and his family once every year. On their itinerary was visiting Shravanbela Gola, a Jain pilgrimage in the Hassan district of Karnataka on the first day, UB City Mall in Bengaluru the next day, and then go to Ooty, a famous hill station in Tamil Nadu, for a week the following day. But by the time they reached Ooty, the hectic schedule took a toll and worsened Anil's persisting knee issue, which made walking difficult for him. He also fell ill and had to spend most of the time in the hotel itself. The…

As we approach the end of 2023, it's the perfect time to start preparing for a better financial future in 2024. The 30-day money-cleansing challenge in December 2023 is designed to help you end the year on a high note and set the stage for a more financially secure and prosperous year ahead. During the month of December, take the opportunity to evaluate and reset your financial habits, goals, and plans. Use this time to declutter your financial life, organize your finances, and set yourself up for success in the coming year. Day 1: Create a Detailed Financial Inventory Take stock of all your financial accounts, assets, debts, and expenses. This inventory will serve as the foundation for your money-cleansing journey. Day 2: Establish Clear Financial Goals Define short-term and…

Large-cap equity funds have regained attention, not due to underperformance, but for the stability they bring to portfolios, particularly in times of market volatility. The current market scenario is volatile owing to the current geopolitical situation, higher interest rates, and slower growth in the developed markets. In such circumstances, a careful selection of a mutual fund scheme is crucial. Canara Robeco Bluechip Equity Fund could be a good choice for investors who have just started their journey into equity mutual funds or existing investors who want to ride the current volatility in the market with some safety. The fund provides a balance between stability and growth. Portfolio The fund follows a concentrated portfolio strategy and, typically, holds 40-45 stocks, which seems right in terms of the fund size. As on…

Behavioural Finance Imet a family travelling abroad for a month, and the cost of their trip is coming to ₹9 lakh. They told me that they had sold some property and invested the money, and this was the interest on the amount they had invested (after paying tax). While it is completely their business, and I am certainly glad to see people use their money to enjoy their life, I instantly spotted the behavioural bias we refer to as mental accounting. This is when we assign subjective value to our money. We perceive it differently depending on the source and ease at which it came into our possession.Before I define it in detail, let me share a few examples. Economist Richard Thaler narrates this story to describe mental accounting. A…

National Pension System What is it? Market-linked. Allows investments till age of 60. Allows ‘Auto’ mode where asset allocation is predetermined or ‘Active’ mode, which allows flexibility. Taxability: Tax-exempt up to ₹1.5 lakh; 60% of maturity amount withdrawn as lump sum is tax-free, rest has be used for buying annuity, which is taxable. Suitability: Can be opened in the planning phase. What is it? Long-term government scheme. Comes with a 15-year lock-in and is currently offering 7.1% per annum, decided quarterly. Minimum and maximum investment allowed in a year is ₹500 and ₹1.5 lakh, respectively. Taxability: EEE category, i.e, investment, interest and maturity are tax-exempt up to overall limit of ₹1.5 lakh under Section 80C of Income-tax Act, 1961, per annum. Suitability: Offers partial withdrawals after 5 years. May not…

CAPITAL MARKETS EASE OF TRANSACTIONS Change: Sebi has simplified the norms for processing investors’ service requests by RTAs and for furnishing PAN, KYC, and nomination details. It has also decided to do away with the provisions related to the freezing of folios under the Benami Transactions (Prohibitions) Act, 1988 and the Prevention of Money Laundering Act, 2002. Impact: It will help mitigate the unintended challenges raised by the freezing of mutual fund folios and help protect investors’ interests in securities, while promoting and regulating the securities market. Change: Sebi has revamped the format of SID of mutual funds after consultations with its Mutual Fund Advisory Committee and Amfi. Impact: The move will enhance the ease of preparation of the mutual funds’ SID document and increase its readability for investors. TRANSPARENCY…