India's Stock Market: A Big Change with Local Investors

 India's stock market, known as Dalal Street, is seeing a big change. For a long time, FIIs were the main players. They had a big say in how stocks like Nifty and Sensex moved. But now, things are changing.

 

Indians Investing More in Stocks:

 

The difference in investments between foreign investors (FIIs) and local Indian investors (DIIs) has become really small. FIIs have $586 billion in Indian stocks, and DIIs are close behind with $580 billion. Just two years ago, this gap was much bigger – $140 billion more!

 

Why This Shift?

 

More Indians are investing in the stock market now. Thanks to mutual funds, pension funds, insurance schemes, and easier ways to invest like discount brokers, people in India are putting more money into stocks. In fact, the number of people in India investing in stocks has grown a lot – from 1.3% in 2011 to 3% in 2023. This is still less than countries like the USA, but it's a big jump for India.

 

Indian Investors Making a Big Impact:

In the last year and a half, Indian investors have put in $39 billion into the stock market. During the same time, foreign investors took out $24 billion. This means that Indian investors are now playing a big role in keeping the stock market stable, especially for big stocks like the Nifty 50.

 

What Does This Mean for India?

 

This change is great news for India’s stock market. It shows that more Indians are getting involved and that the market is not just depending on foreign money. This could mean a more stable market, with less ups and downs because of foreign investors. It's a sign of a stronger and more independent economy in India, where the people of India have a bigger say in the stock market.

 

Conclusion:

 

This new trend in Dalal Street is a big step for India. It shows that Indian investors are taking charge, making the market stronger with their investments. This is good for the stock market and for India's future, as it shows the growing confidence and financial power of its people.

 

 

Market Kya Lagta hai

 In the world of finance, one big question keeps popping up: "What's going on with the stock market?" It's a bit like trying to guess if it will rain next week – unpredictable. But we're here to shed some light on what we can anticipate.

 

Short-term Mystery, Long-term Confidence

First off, let's be clear: short-term market predictions are like trying to guess the lottery numbers. We can't do it. But when we look a bit further down the road, things start to make more sense.

 

In the next 1-3 years, it's a bit of a foggy crystal ball. But when we stretch our view to 3-5 years, things look brighter. During this time, it's possible that the market may not perform as spectacularly as it has in the past. Beyond 5 years, things seem to line up better.

 

Understanding Market Values

Why do we think this way? Well, right now, the market is worth more than it usually is. Surprisingly, this is a clue about what's coming next. History tells us that when the market is at a higher valuation, future returns might be a bit lower. We think this gap might get smaller in the next 3-5 years.

 

Getting Real About Returns

Now, let's talk about real numbers. Over the next few years, India's economy is expected to grow around 11%-12%, including inflation. Companies, on the other hand, might do even better, with returns of around 12%-14%. So, your investments might not shoot for the stars in the next 5 years, but they could catch up later.

 

The Valuation Challenge

Here's a tricky part. While we don't see market values skyrocketing, there's a chance they could slip a bit. Remember, predicting markets is like guessing which team will win the World Cup – not easy.

 

The Key to Success: Asset Mix

In a nutshell, stocks are still a great way to grow your money over time. But don't forget the secret sauce – the right mix of investments. It's like picking the right ingredients for a recipe – it makes all the difference.

Investing for Tomorrow: The Front-View Approach

 When it comes to investing, it's crucial to keep in mind that it's not about dwelling on the past; it's about focusing on the future. Surprisingly, many retail investors tend to make this very mistake.

Human nature has a peculiar trait - it tends to put too much weight on short-term outcomes. This tendency often leads people to rely heavily on the current performance of markets and stocks. It's akin to navigating a road while constantly looking in the rearview mirror.

Here's where the problem arises. When a particular stock or sector is on a winning streak, retail investors often rush to join the party, just as it's about to end. They arrive late, and there's only a tiny slice of the growth pie left.

Retail investors frequently flock to popular stocks and sectors because of their recent success. But here's the kicker: these overhyped, over-owned assets usually don't deliver the stellar returns you might expect.

Investing, you see, is a forward-looking endeavour. The real gems are often found in the less popular, under-owned asset classes. These hidden gems have the potential to generate superior returns, but they require a degree of mental discipline that many find challenging.

So, while investing might sound straightforward, it's often tougher to put into practice. The key takeaway here is to shift your focus from what's popular right now to what holds promise for the future. It's about discipline, patience, and the wisdom to look ahead. In the world of investment, success comes to those who dare to break away from the crowd and keep their eyes firmly fixed on the horizon.

Master Your Mindset for Financial Success

Believe it or not, how you think about money can shape your financial future. If you grew up thinking money is scarce, it's time to change that!

Studies say our money habits start when we're really young. But here's the cool part: you can change those habits. Experts suggest that even our negative thoughts can drive us to make better decisions. For example, if we've faced challenges or obstacles in the past, we can use those experiences to inspire us to work harder, be more determined, and take actions that lead to success. These negative thoughts or setbacks can serve as reminders of what we don't want to repeat, motivating us to make smarter decisions moving forward.

Start by believing you deserve good things. Making small changes, like asking for more at work, can lead to big wins. And guess what? Money can be a force for good! You can help others and make a difference.

Having a big salary isn't enough to get rich. You need to make your money work for you. Just like planting seeds, you start small with investing. Over time, your money grows and grows.

Remember, there's no one path to success. You can start a business, invest, or save smartly. The key is to stick with it and believe you can do it.

Your mindset matters – it can change your life. You might not be a millionaire right away, but you are on your way to a better future. Start focusing on abundance and carefully monitor your wealth. Stay positive, stay motivated, and witness your wealth flourish!

India's Rising Economy and Chandrayaan-3: A Bright Future Amidst Global Challenges

 India's economic journey continues to captivate the world's attention as it moves toward becoming a global powerhouse. Despite facing challenges, India's economy has demonstrated remarkable resilience, painting a promising picture for the future.

 An intriguing milestone went relatively unnoticed: In January 2023, India surpassed China to become the world's most populous country, boasting approximately 1.417 billion people. This pivotal shift brings both opportunities and challenges, underscoring the importance of effective education, health programs, skill development, and job creation to harness this demographic dividend.

 Amid the backdrop of the COVID-19 pandemic and the Ukraine-Russia conflict, India's long-term growth story stands out amidst global economic uncertainty. Foreign investments have surged, propelling FDI to a record high of nearly US$ 85 billion in the fiscal year 2021-22. India's ascent to the rank of the world's fifth-largest economy in 2022 is a testament to its resilience and potential. It's on track to secure the third-largest position by 2029, surpassing Japan and Germany.

 Numerous factors have contributed to India's economic success. The pandemic highlighted the imperative of diversifying supply chains away from overreliance on China. This trend has led to the adoption of a "China Plus One" strategy, positioning India as a favoured destination for investments looking to move away from China.

 India's strengths are multifaceted: a youthful population, cost competitiveness, strategic infrastructure investments, rapid digital adoption, English proficiency, diplomatic prowess, and evolving global partnerships. These attributes combine to make India a beacon of hope and growth in an uncertain world seeking stability and prosperity.

 Adding to this spirit of achievement, India's successful ventures in space, including the notable Chandrayaan missions, showcase the nation's scientific prowess on a global stage. Chandrayaan-3's triumph stands as a testament to India's technological capabilities, boosting national pride and contributing to the country's global reputation.

As India continues its economic journey, it not only commemorates its achievements but also embraces the immense potential that lies ahead. In a world full of uncertainties, India's economic resilience shines bright, illuminating a path toward growth and prosperity.

Navigating Volatile Markets: A Guide to Building Sustainable Wealth

In the exciting world of wealth creation, it's essential to remember Warren Buffett's timeless advice: "Never lose money" and "Never forget Rule Number 1." Especially when markets are soaring, it's easy to become enamoured by short-term gains. However, let's explore how to make sure your investments stay strong and safe over a long period of time.

 Consider this scenario: two portfolios with varying returns over four years.

Option A might look tempting at first, but let's not decide hastily based on that. If we average the returns, Option A appears to outshine Option B with 28% against 20%. However, simple averaging doesn't reflect the power of compounding, which we'll explore further.

 Imagine you invest Rs 100 in both options. When applying the magic of compounding, Option B emerges as the winner after four years. Option A will give you a maturity value of Rs179.10 while Option B will give you a maturity value of Rs206.70. The significant dip in Option A's Year 3 hampers its long-term returns.

 Understanding the impact of negative returns is crucial. If an investment drops by 25% (from Rs 100 to Rs 75), it needs a whopping 33% increase (from Rs 75 to Rs 100) to recover its original value. A 50% loss necessitates a 100% gain to break even. We've witnessed such scenarios during market booms and crashes.

 

So, what can you do to shield your investments from substantial losses?

 

1. Prioritize Capital Preservation: Try to achieve a consistent increase in your investment value over a long period of time. Very fast growth usually doesn't last.

 2. Avoid Hype and Overvaluation: Avoid buying things that cost too much. Putting your money into things that are super popular and costly at the moment could end up making you lose money later on, and that might make you feel unhappy about it.

 3. Seek Hidden Gems: Look for undervalued "funds" with solid fundamentals, even if they're temporarily out of favour. This strategy is potent when markets are surging.

 4. Beware of FOMO: Fear of Missing Out can cloud judgment. Refrain from buying into trends without thorough research. Remember, people tend to boast about wins, not losses.

 5. Optimize, Don't Maximize:

"Optimize, Don't Maximize: In the journey to lasting financial success, prioritizing risk-adjusted returns over high-risk ventures is paramount. This approach ensures sustainability, allowing investments to weather market uncertainties while maintaining capital protection. By seeking the most effective returns for the risk taken, you're fostering a strategy that aligns with long-term goals and prudent decision-making.

 Investing isn't about avoiding all losses or downturns. It's like a journey that has ups and downs, not a straight line. While some ups and downs are normal, we should focus on preventing big drops that happen now and then. These big drops can hurt the overall returns of our investments. Professionals pay close attention to managing these situations to make sure our investments stay on track.

 In essence, crafting a resilient investment strategy involves safeguarding your capital while achieving reasonable returns. The allure of immediate gains should never eclipse the importance of enduring prosperity. As your financial advisor, my aim is to guide you toward optimizing your returns while minimizing risks. Let's work together to build a portfolio that stands strong in any market climate.

 

 

 

Investing in India: A World of Opportunities

 

India, the world's second-most populous country, is poised for a promising economic future, presenting lucrative opportunities for investors looking to diversify their portfolios. Several positive factors contribute to the country's growth potential and make it an attractive investment destination.

Demographic Dividend: A young and growing population fuels productivity and consumption, driving economic growth.

 Rising Middle Class: A burgeoning middle class creates a surge in domestic consumption, fostering economic expansion.

 Tech Hub: India's booming technology sector attracts investments and offers innovative prospects.

 Entrepreneurial Ecosystem: A vibrant startup culture provides potential investment avenues across industries.

 Infrastructure Advancements: Government investments in infrastructure spur economic activity and create investment opportunities.

 Business-Friendly Reforms: Economic reforms make India an attractive destination for investors.

 Manufacturing Potential: Skilled labor and competitive costs position India as a global manufacturing hub.

 Agriculture and Food Processing: Agricultural reforms drive rural income growth and contribute to overall development.

 Thriving Services Sector: The services industry, from finance to healthcare, drives economic growth.

 Renewable Energy: Adoption of renewable energy sources opens new investment avenues. 

Global Investment Appeal: India's market size and investment policies attract foreign investors.

 Economic Resilience: India demonstrates resilience in challenging times.

As investors consider their global investment strategies, India's optimistic economic outlook should not be overlooked. The country's vast potential and growth prospects present exciting opportunities for investors seeking to capitalize on the rising tide of India's economic future.

INVEST FOR A LIMITED PERIOD AND ENJOY THE WHOLE LIFE BENEFITS

 

I am writing this article mainly for the benefits of the young generation. At the same time, I’ll request the parents of them to pay special attention on it.

The easiest way of success is to follow the pioneers on the field. All the legends in the investment field gave most importance to time frame. But now a days young people not very much keen for long term commitment. Therefore, they try to avoid it. I’ll try to solve the issue with – SHORT TERM COMMITMENT BUT LONG-TERM RESULT.

It is true that now a days young generation faces too much hurdles in the working field. Majority of them are not sure about what is going to happen next. Therefore, they should use their “PRESENT” in the right way to frame their future.

If I present a monthly SIP plan @ 20K for next twenty years to the juniors, probably majority of them will not be very much interested. Now if I change the investment time frame to only 5 years, many of them will be interested. If they invest for 5 years and wait for another 15 years, whole life they can enjoy monthly payout of Rs 57K *. In addition to that nominee will enjoy the benefits of Rs 89 lakhs(approx.).

If they invest for monthly 5K, they will receive the whole life payout of Rs 14K and nominee will get approx 22 lakhs.

The main challenge in today’s life is – LIFE STYLE EXPENSES. In case of juniors, it is much higher than the seniors. In addition to that there is no concept of PENSION (except a barring few). Young generation now following the western life style and there’s nothing wrong in it. But we should keep in mind that the social security is at decimal here compared to the west. So, they must build their future when the situation is under their control.

*investment period return is assumed @12% and distribution period return is assumed @8%

কিছু দিন টাকা জমান, আর সারা জীবন ফল উপভোগ করুন

আমার আজকের এই লেখা প্রধানত তরুণ প্রজন্মের জন্য। সকল অল্প বয়সীদের ও তাঁদের অভিভাকদের আমি অনুরোধ করবো এই ছোট্ট লেখাটা একটু মন দিয়ে পড়তে।

সাফল্যের সবচেয়ে সহজ সরল পথ হলো পূর্ববর্তী সফলদের পথ অনুসরণ করা। বিনিয়োগের ক্ষেত্রে তেমনই একটি পথ হলো  সময় । বিনিয়োগের সাফল্যের জন্য সময়ের চেয়ে বড় চাবিকাঠি আর কিছু নেই। আর সমস্যাটা ঠিক এখানেই। আজকের দিনে তরুণ প্রজন্ম কোনো দীর্ঘ সময়ের অঙ্গীকারকে ভয় পান। ফলে সহজাত কারনেই তা এড়িয়ে চলতে চান।  আমার আজকের প্রয়াস দুদিক বাঁচিয়ে এই তরুণ প্রজন্মকে আশার আলো দেখানো।

আজ আমরা দেখে নেবো অল্প কিছুদিন টাকা জমিয়ে সারা জীবন ভালো থাকার কোনো উপায় আছে কিনা! যুব সমাজকে আজকের দিনে কর্ম ক্ষেত্রে অনেক ঘাত প্রতিঘাত, প্রতিকূলতার মধ্য দিয়ে চলতে হয়। তারা নিজেরাও জানেননা আগামী দিনে ঠিক কি ঘটতে চলেছে। ফলে তাঁদের বর্তমান টাকে কিন্তু খুব সুন্দর ভাবে কাজে লাগাতে হবে।

আগামী ২০ বছর প্রতিমাসে ২০,০০০ টাকা জমাতে বললে অনেকেই হয়তো এড়িয়ে যেতে পারেন। কিন্তু আগামী ৫ বছরের জন্য এই কাজটা অনেকেই করতে পারবেন। তারা ৫ বছর টাকা দেবেন, তারপর আর বিনিয়োগ করবেননা। তার ঠিক ১৫ বছর পর ( অর্থাৎ শুরু থেকে ২০ বছর পর) থেকে তারা প্রতি মাসে পেতে পারেন প্রায় ৫৭,০০০ টাকা সারা জীবনের জন্য  *। এছাড়াও মনোনীত ব্যক্তি পাবেন আনুমানিক ৮৯ লাখ টাকা।

৫ হাজার টাকা প্রতি মাসে দিলে তিনি প্রতি মাসে ফেরৎ  পাবেন ১৪,০০০ টাকা, আর মনোনীত ব্যক্তি পাবেন প্রায় ২২ লাখ টাকা। 

আজকের দিনে লাইফ স্টাইলের জন্য খরচ সকলেরই বেড়ে চলেছে। তরুণ প্রজন্মের ক্ষেত্রে সেটা আরও বেশি। আর একটা খুব বড় সমস্যা হলো অধিকাংশ ক্ষেত্রেই আগামী দিনে পেনশন বলে কিছু থাকবেনা।তাই আজ থেকেই সতর্ক না হলে আগামী দিনে বড় সমস্যা হতে পারে। উন্নত দেশের জীবন ধারাকে অনুসরণ বা অনুকরণ করলে কোনো ক্ষতি নেই, কিন্ত একথা ভুললে চলবেনা সোশ্যাল সিকিউরিটি এখানে প্রায় নেই বললেই চলে। তাই নিজেদের ব্যবস্থা নিজেদেরই করতে হবে এবং সেটা সময় থাকতে। পরে করার কথা ভাবলে সমস্যা বাড়বে বই কমবেনা।

* রিটার্ন ধরা হয়েছে বিনিয়োগ কলে ১২%, টাকা ফেরৎ পাবার সময় ৮%

POWER OF COMPOUNDING

 Power of compounding কে বিশ্বের অষ্টম আশ্চর্য বলা হয়ে থাকে। Compounding কথাটা আমরা শুনেছি সবাই, জানিও সবাই কিন্তু কাজে লাগিয়েছেন খুব অল্প মানুষই।

টাকা বিনিয়োগ করার পরে আমরা মেয়াদ শেষে হাতে কি পাবো তা নির্ভর করে 3টি বিষয়ের উপর - 

1) কত টাকা জমা রাখছি  (P)

2) কত হারে সুদ পাচ্ছি ( R)

3) কত দিন টাকাটা জমা রাখছি (N)

আমরা অধিকাংশই প্রথম দুটিকে খুবই গুরুত্ব দিয়ে থাকি, তৃতীয়টির তুলনায়। কিন্তু গাণিতিক সূত্র অনুযয়ী এই সময় (N) থাকে সূচকে । বাকিরা থাকে ভিত্তিতে। আর ভিত্তির (base) সাথে সূচকের(exponent) কোনো লড়াই চলেনা।

Accumulated Sum = P*(1+R)^N

সুদের উপর সুদ জমা Power of compounding এর আসল মজা। সময় যত বাড়তে থাকে - এই মজাও তত বাড়ে। টাকায় টাকা আনে কথাটা আমরা অনেক শুনেছি - ঠিক তেমনি সুদও সুদ আনে।

একটু উদাহরনের মাধ্যমে বিষয়টা দেখা যাক ( টেবিল নিচে দেওয়া হলো)। 

10 লাখ টাকা 5 বছরে 11% সুদে হয় 16.85 লাখ টাকা। এই 16.85 লাখ টাকার মধ্যে মূলধন (10 লাখ)  - 59% ;  আর সুদ (6.85 লাখ) - 41% - অর্থাৎ মূলধনের প্রভাব বেশি সুদের তুলনায়।

কিন্তু ওই 10 লাখ টাকা 30 বছর পরে একই শর্তে হয় 2.29 কোটি টাকা। এর মধ্যে মূলধন আগের মতোই 10 লাখ টাকা - 4% , আর সুদ 2.19 কোটি টাকা -96% । অর্থাৎ সুদের তুলনায় আসলের প্রভাব অতি নগণ্য।

Garry Keller তাঁর বই 'One Thing' এ ব্যাখ্যা করেছেন কিভাবে একটা ছোট্ট পাথর Domino প্রভাবের মাধ্যমে Mt এভারেস্ট কেও টলিয়ে দিতে পারে। ঠিক তেমনি সাধ্যমত আমাদের আজকের সঞ্চয় আগামী দিনের অনেক চিন্তার উপশম করতে পারে।

Power of compounding আমাদের সকলের জন্যই প্রয়োজনীয় কিন্তু আমার এই লেখার মূল উদ্দেশ্য আগামী প্রজন্ম, তরুণ প্রজন্ম। ছোটরা যদি বুঝতে না চায়, আমাদের বাবা মা দের তাদেরকে বোঝানোর চেষ্টা করতে হবে। আগামী দিনে পেনশন বলে কিছু থাকবেনা। সামাজিক দায়বদ্ধতাও কতটা থাকবে যথেষ্ট সন্দেহ আছে। 10 হাজার টাকা মাসিক বিনিয়োগ 12% হারে 30 বছরে 3.08 কোটি টাকা হবে। সময়টা কমে 20 বছর হয়ে গেলে হাতে পাবেন 99 লাখ টাকা। বুঝতেই পারছেন সময়ের কি মারাত্মক প্রভাব!

Power of compounding শুধুমাত্র বিনিয়োগ নয়, জীবনের অন্যান্য ক্ষেত্রেও একই রকম উপযোগী - যা জানা এবং বোঝা বেশ সহজ কিন্তু পালন করা এত সহজ নয়। তাইতো আমাদের গুরু Warren Buffett বলেছেন - "We don't have to be smarter than the rest. We have to be more disciplined than the rest ".