Indholdsfortegnelse for January 2024 i Outlook Money

“What can help investors navigate the stock market at any point would be to steer clear of optimism bias and look at their investing decision from a practical lens that is based on research, and their own needs Hope is the thing with feathers - That perches in the soul - And sings the tune without the words - And never stop - at all - The power of hope that humanity can harness is fabled and is something that has been much talked about by philosophers, litterateurs and revolutionaries. The hope for a better tomorrow, the hope for freedom and rights, the hope for a favourable look from the beloved, the hope that we will succeed professionally, personally, financially, the hope that the New Year will bring happiness and…

COMPANY NAME LEMON TREE CURRENT MARKET PRICE ₹ 119 CALENDAR YEAR RETURN 42.09% Lemon Tree Hotels is India's largest hotel chain in the mid-priced hotel sector. It operates in the upscale segment and in the midmarket sector, consisting of the upper-midscale, midscale and economy segments. INVESTING RATIONALE Demand Surge: Factors, such as the rise of revenge tourism, an improved economic environment encouraging corporate travel, and the revival of mega weddings and cultural events have contributed to an upward trend. The demand surge is surpassing the current supply, which is not expected to catch up in the next 2-3 years. The present trend mirrors the sector's last upcycle from 2004 to 2008, which was characterised by enhanced margins. This bodes well for domestic hotel players with robust pipelines and healthy balance…

Mr Sharma recently turned 75 and received many wishes for a long and healthy life including some wishing him to live beyond 100. However, Mr Sharma was concerned about his expenses as his income from assured returns products was declining. When he retired 15 years ago, he was confident that the interest income from his corpus (provident fund and other investments) would suffice over his retirement, but he had never imagined that interest rates would decline so quickly. While we imagine retirement as living without any strings attached, it is not as easy as we think. How we manage our finances during our active life, decides how we can lead our golden years. The higher the retirement corpus accumulated over our earning years, the easier our retired life can be.…

Investment This is the last hurrah for tax savings through a medium that seems to have been dealt a body blow, thanks to the growing acceptance of the new tax regime in which it can play a limited role. Equity-linked savings schemes (ELSS) is a genre that is clearly relegated to the deep end of our mental pool till the year-end signals for tax savings hit our subconscious mind. Yet, despite the very lonely furrow it is currently ploughing, the latest numbers delivered by ELSS, on average, are quite impressive. Their marginalised status notwithstanding, investors need to do a full-scale rethink on their utility. The concept of ELSS packs an unputdownable medley—the shortest lock-in period (‘shortest’ vis-a-vis other competing taxsaving options), the potential of its all-equity portfolio, and the fact…

Life expectancy in India is likely to rise from the current 70 to 75 by 2050 and 82 by the end of this century, according to UN estimates in 2022. This means that most people would have to provide for at least 15-20 years after they retire, given that the retirement age is around 60 in most professions. This shows that delaying retirement planning is not an option. Even so, fewer people take retirement planning seriously, especially when they are younger. Goals like going on a holiday, children's education and others take precedence as retirement seems to be too far into the future. “Often, individuals plan retirement later in life because they prioritise their family and children's financial security over their own retirement. They may start building the corpus in…

The markets were volatile throughout 2023, though they ended the year on a positive note. Usually, the markets are also volatile in the election season. How do you see the markets behaving during the 2024 elections? Generally, in the run-up to the elections, multiplier effects come into the economy as you find that government spending is quite robust. All that leads to consumption, which tends to be on the higher side. But this time around, we are coming on the back of a slightly inflationary environment. So, the consumption pattern is slightly different from what we have seen in the past. We are seeing a K-shaped recovery on demand. That is something that is expected to continue. Typically, it's the fast-moving consumer goods (FMCG) sector, which gets impacted positively. This…

SEKHAR CHETLURU & SARATH KUMAR KETHEPALLI, Partners, Srija Stock Broking Co. Do you put all your money in just one asset class, such as the stock market? Or do you only book Fixed Deposits, invest in bonds or keep your savings in your bank account? If you fall in either one of the two categories, you need to know about asset allocation and its multiple benefits. Asset allocation is a fundamental investment strategy where you invest in different asset classes such as equities, debt, commodities etc. Each of these asset classes have a unique role to play in one's investment journey. For instance, equity brings in the element of wealth creation but carries the highest risk. But, if an investor stays invested over the long term, equity has the potential…

VIKASH BAID, Managing Partner, Trust Capital You might have started your long-term investment journey using the mutual fund route or, perhaps, direct equity. However, if you are in the growth stage of your career, it is quite possible that your wealth has substantially increased. As a result, it will not be surprising if your relationship manager or wealth manager may be recommending a PMS at this stage. What is PMS? PMS stands for Portfolio Management Service, which is an investment service offered by a portfolio manager (brokers and mutual funds). Investors here have the flexibility to tailor a portfolio as per one's personal preferences and financial goals. However, the point to note here is that the minimum investment ticket size is Rs 50 lakh. There are three types of PMS…

The exuberance that gripped the stock market after the lows of Covid seems to be continuing even three years on, albeit with small blips in the middle. While 2021 saw the Sensex touching the 60,000 mark for the first time in its history, it breached the 70,000 mark towards the end of 2023. The two broad indices, Sensex and Nifty, are hovering around record levels of 71,000 and 21,000, respectively, and investors are rejoiced to see gains in their portfolios. Despite the surge, those who have been in the market long enough know how mercurial the markets can be. The year 2023 proved to be a good year from the investors’ point of view as they made decent returns. However, the journey of BSE Sensex from around 60,000 in January…

COMPANY NAME INDIAMART CURRENT MARKET PRICE ₹2,795 CALENDAR YEAR RETURN 29.11% IndiaMART stands as India's premier online business-to-business (B2B) marketplace. INVESTING RATIONALE Market Leader: The company has a 60 per cent market share in the domestic online B2B sector, catering to the small and medium enterprises (SMEs), large enterprises, as well as individuals. New Subscribers: It has a growing and engaged subscriber pool (210,000) and steady upgrades to higher packages. We anticipate a positive trend in net additions. The management is also exploring strategies, such as recalibrating client acquisition strategy, while simultaenously reducing exposure to non-performing cities. However, we believe that progress on this front would be more visible only after a few quarters. A continual, gradual enhancement in gold and/or platinum average revenue per user (ARPU) is expected to…

COMPANY NAME MARUTI SUZUKI CURRENT MARKET PRICE ₹10,273 CALENDAR YEAR RETURN 22.20% Incorporated in 1981, Maruti Suzuki India (MSIL) is India's leading passenger car maker with exports to more than 90 countries. It recently launched two new models in the SUV segment, Fronx and Jimny. INVESTING RATIONALE Market Leader: MSIL has a cumulative installed capacity of 2.25 million units with a 42 per cent market share in the domestic passenger vehicle (PV) segment. It is adding another million unit capacity at Kharkhoda in Haryana. MSIL plans to have a total capacity of over 4 million units and a 50 per cent market share by FY30 and has recently acquired the Sanand plant from Suzuki Motors. Wide Portfolio: MSIL has a wide product range across prices from ₹5-8 lakh to ₹20…

When Kolkata-based Aranya Sen, 72, booked a fixed deposit (FD) with his bank in 2022, he had no idea he was buying a unit-linked insurance plan (Ulip). It was only later that he realised that he was mis-sold a Ulip in the guise of an FD. “It was my bank's relationship manager (RM) who lured me into investing in this FD, convincing me about its high, assured return. Only when I had put in the money, I found it was a Ulip. I do not need this. I have been mis-sold,” says Sen. He opted to invest in an FD for regular income and guaranteed returns. Mis-selling means selling someone something that is not the right fit for his/her needs. For instance, if you are going to Canada in winter…

You recently talked about making life insurance simpler. Why is that so? Our interaction with customers shows that they are anxious about buying insurance, mainly because of the complexity. The anxiety stems from the fact that they are not confident about what they are buying. I have seen it across BFSI that customers shy away from complex products, even if they are good, and flock towards simpler products. Since these are long-term products, they are not liquid and there are costs attached to exiting them midway, the decisioning becomes that much deliberate. But certain jargons are intrinsic to insurance. For example, you cannot think of insurance without understanding the concept of pre-existing diseases. What is the solution then? The solution is explaining patiently and asking the right questions. As an…

ARUN SINGHAL, Director, Bachatwala.com Retirement—the golden phase of life when individuals bid adieu to the daily grind and embark on a journey of relaxation and self-discovery. However, the tranquility of these years depends significantly on the foresight and planning invested in one's financial future. Retirement planning is not merely a financial exercise; it's a strategic roadmap to ensure a comfortable and stress-free life post-employment. In this journey toward financial freedom, mutual funds emerge as a potent tool, offering a diversified and growth-oriented approach to building a robust retirement portfolio. Understanding Retirement Planning Retirement planning involves a comprehensive assessment of an individual's financial goals, lifestyle aspirations, and the steps needed to achieve them after exiting the workforce. It's a meticulous process that considers factors such as the desired retirement age, estimated…

AKSHAY MUNIM, Partner, Greenedge Capital Advisors Private Limited Legendary investor Warren Buffett once remarked, “Diversification is protection against ignorance. It makes little sense if you do not know what you are doing.” This encapsulates the essence of asset allocation, a strategy that transcends mere investment diversification. For retail investors navigating the intricate terrain of financial markets, understanding the nuances of asset allocation is akin to wielding a powerful tool. Let us do a deep dive. The Significance of Asset Allocation Asset allocation is not merely about spreading investments; it is a finely tailored approach to constructing a robust and diversified portfolio. This journey commences with a thorough understanding of one's financial goals, risk tolerance, and investment horizon. Whether aiming for sustained long-term growth, vigilant capital preservation, or a judicious blend…

COMPANY NAME HARSHA ENGINEERS CURRENT MARKET PRICE ₹392 CALENDAR YEAR RETURN 2.03% Harsha Engineers is the largest manufacturer of ball bearing cases in India, supplying to each of the top six global manufactures of bearings. INVESTING RATIONALE Market Leader: Harsha has four manufacturing facilities with warehouses located close to clients, and two subsidiaries in China and Romania, supplying products to over 25 countries across five continents. They have a 6.5 per cent market share in the global organised bearing cages segment and derive 65 per cent of their revenue from overseas. Expertise: Harsha has the expertise to design and develop advance tooling inhouse which enables them to manufacture precision products, right from the design to the manufacturing stage. The advent of electric vehicles (EVs) will increase the demand for specialised…

COMPANY NAME INFY CURRENT MARKET PRICE ₹ 1,563 CALENDAR YEAR RETURN 2.54% In the IT sector, we are focusing on businesses which have healthy growth characteristics, with an ability to cater to both discretionary spending and cost takeout programs and trade at reasonable valuations. Notably, Infosys meets the bill on all counts. INVESTING RATIONALE Large Deals: In H1FY24, Infosys won a fair share of large deals to provide some visibility for FY25 growth, though the sector faced a tough situation in 2023. The IT services firms faced a tough demand environment in the year due to several factors. Primarily among them were reluctance to commit to new programs given high economic uncertainty, reprioritisation of spending away from Covid-era priorities toward efficiencies and optimisation, excess inhouse hiring, and longer sales and…

Investment It is a generally accepted notion that unit-linked insurance plans (Ulips) are not investorfriendly due to their relatively higher charges and lack of flexibility in exiting from a policy, apart from shifting from one sub-fund to another. It is usually recommended that investments should be executed through mutual funds (MFs), and for matters of insurance coverage, you should buy term insurance. This view is correct. However, today we will look at certain other aspects of Ulips. If you are approached to buy a Ulip, or if you are considering one and want to compare it with mutual funds, then here are the things you should be looking at. Factors For Comparison The most important element for comparison, is the charges on the product. You may say performance is most…

K S RAO, Head - Investor Education & Distribution Development, Aditya Birla Sun Life Asset Management Company Ltd As we approach the end of another year, it's a great time to reflect on our personal finances and set resolutions for the upcoming year. Whether you had financial successes or challenges in 2023, taking some time to review your progress and plan for the future can set you up for a successful 2024. Reflections for 2023: Reflect on Your Progress & Challenges: Start by looking back on the past year. Consider your financial goals and whether you were able to achieve them. Start by reflecting on the specific financial goals you were able to achieve in 2023. Whether it was paying off a credit card, building an emergency fund, or sticking…

MONTHLY BUDGET The figures are indicative for a 21-year-old male who has just started working. Expenses on home loan, and child education have not been taken into account. It's been assumed that he has not taken any health or life insurance, nor is he saving towards emergency corpus. PROBLEM AREAS Your mandatory expenses will increase if you have a student loan or use credit card. Rent and other fixed expenses will vary as per the city's location you choose. SOLUTIONS 1 Scout for schemes that can reduce your bills. Look for different living and commuting options and choose that fit in your budget. 2 Avoid taking too many liabilities as that will add to your EMI outgo. If you are unable to balance these with your other expenses and investments,…

BALKAR SINGH, Founder & Owner, AGS Fin. Corps. Imagine a garden with only one variety of plant. It blooms in the season while withers otherwise. Investing in a single asset class works in a similar manner. The most common choice for investors is equity despite their volatile nature. Many retail investors believe that equity investing is the only way to create wealth given the historic high returns of this asset class. Some investors get influenced by broader market sentiments (known as herding behaviour) without knowing the potential risk associated with investing only in equity. Other set of Indian investors believe that investing in gold is the most reliable method given the misconception that gold prices never decline. The fact is, in years like 2021, gold yielded negative returns. That being…