6 Investment Lessons From Chanakya To Achieve Financial Success
6 Investment Lessons From Chanakya To Achieve Financial Success
Whether you are an investor or not, it is pretty certain that you must have heard about the famous Chanakya or his Nitis.
"Before you start any important work, ask yourself three questions: why am I doing it? What the results might be, and will I be successful? Only when you think deeply and find satisfactory answers to these questions, go ahead"

It's always advisable to outline a comprehensive plan before embarking on any endeavor, and this principle holds true for investment as well. Establishing a clear plan is paramount to success in investments. Without defined objectives, navigating questions such as where to invest, how much to invest, and for how long can be daunting.

However, when you align your investments with specific needs, the entire investment process becomes more streamlined. By understanding your objectives, you gain clarity on the duration of your investment horizon. This, in turn, enables you to determine the required investment amount and the most suitable investment vehicles to attain your target. If you don't know where you are heading, it doesn't matter how quickly you run!

Furthermore, syncing your investment with your needs encourages you to remain committed to your investment strategy. It serves as a deterrent against impulsiveness, which can be your greatest enemy in financial endeavors.
"Save your wealth against future calamity...when riches begin to forsake one, even the accumulated stock dwindles away".

This advice from Chanakya underscores the significance of establishing an emergency fund, which is vital for ensuring financial security and stability. An emergency fund serves as a financial safety net, enabling individuals to address unexpected financial challenges such as adverse market movements, medical expenses, significant home or vehicle repairs, job loss, and more. Financial experts typically recommend maintaining an emergency fund to cover at least six months' worth of expenses. In adverse situations, an emergency fund meets your daily needs so that you don't have to tap into your long-term investments. Emergency funds help you stay afloat without relying on loans or credit cards, thus, prevent you from falling into a debt trap.
"Once you start working on something, don't be afraid of failure and don't abandon it. People who work sincerely are the happiest."

Over the past few decades, stock markets have experienced several corrections triggered by various factors such as pandemics, scams, and economic downturns. However, regardless of the cause or the severity of the decline, equity markets have always bounced back in the subsequent years.

During periods of market corrections, many investors panic and sell off their investments at a loss. This behavior often converts potential paper losses into real ones. However, investors who demonstrate patience and remain invested typically emerge as the most satisfied in the long run.
"Learn from the mistakes of others…You can't live long enough to make them all yourselves."

Observations can be a powerful teacher. Not all lessons require personal experience. Astute investors glean insights from others' missteps, safeguarding their own finances by avoiding similar errors. For instance, if a pattern emerges of consistent losses in penny stocks among peers, why expose oneself to that risk? Both in management and investments, lessons often come at a high cost and are best absorbed through observations. Many renowned investors have candidly shared their mistakes in books or autobiographies. Only after a thorough comprehension of market mechanisms should one venture into investment.
"Too much of anything is bad. One should refrain from too much."

The principle of not going overboard applies to investments too. Putting too much into any single asset class can backfire. That's why diversification is a cardinal rule of investing. Diversifying across various asset classes like stocks, bonds, and gold offers better downside protection, ensuring a more stable investment journey, as not all investments perform well simultaneously.
"Give your wealth only to the worthy and never to others. The water of the sea received by the clouds is always sweet."

The growth or decline of your investments hinges on how effectively you manage your money. Investing in well-regulated products like Mutual Funds or NPS, where qualified professionals manage your money, can make your wealth work for you. Conversely, taking the DIY route might seem like a money-saving option initially, but it can be risky as you could encounter mistakes that would ultimately result in greater expenses down the line.
Embracing the Chanakya's simple yet profound lessons can lay the foundation for a rewarding investment journey. By incorporating his teachings, investors can navigate the uncertainties of the market with greater confidence and resilience, ultimately achieving their financial needs and aspirations. It's all about blending India's traditional wisdom with modern financial techniques. Investors can leverage the strengths of both worlds to optimize their investment strategies and achieve sustainable growth and prosperity.
NJ E-wealth
Indian Mutual Fund Industry: The Year Gone By
Indian Mutual Fund Industry: The Year Gone By
Mutual funds are financial intermediaries that enable millions of small and big investors across the country to engage in and benefit from the capital market. Since its inception in 1963, the mutual fund industry in India has seen tremendous growth and development, reflecting the evolving dynamics of the country's financial landscape. Mutual funds have today become one of the most popular financial instruments used by both retail and institutional investors to meet various financial needs. This industry has expanded enormously in all aspects, including assets under management (AUM), number of schemes, mutual funds, fund houses, etc.
The recent milestone of crossing Rs. 50 lakh crore in AUM for the first time in history, demonstrates the resilience of the industry and its key role in building long-term wealth. AUM witnessed a remarkable surge by nearly Rs. 14 lakh crore, reaching a record high of Rs. 53.40 lakh crore as of March 2024 compared to Rs. 39.42 lakh crore as of March 2023.

This astounding growth rate of over 35% marks the highest since fiscal 2021, driven by robust market performance, increased participation of individual investors and evolving investment strategies.
Along with the jump in AUM, the industry experienced a huge growth in mutual fund investors. The investor base grew to over 4.46 crore, with women accounting for approximately 23% and men around 77%, indicating a diversified and inclusive participation in mutual funds. Out of 4.46 crore investors, nearly 16% (i.e. 70 lakh investors) were added in the last one year and around 47% (2.10 crore investors) in the last 5 years, demonstrating the growing awareness of mutual funds in India.
Equity-oriented mutual fund categories witnessed an outstanding growth of 55% during the fiscal year 2024, reaching Rs. 23.50 lakh crore in assets. This growth was driven by strong inflows and mark-to-market gains, with multi cap funds reporting a highest growth rate of 85% followed by small cap funds at 82%.

The category saw net inflows of Rs. 1.84 lakh crore in the FY 2024, as compared to an inflow of over Rs 1.47 lakh crore in the last fiscal year.

Equity markets represented by Nifty 50 total return index (TRI) and Nifty 500 TRI increased by around 33% and 44% respectively, during the fiscal year.
Hybrid funds surpassed the Rs. 7 lakh crore mark in FY2024 with asset gains of more than 50%, closing at Rs 7.22 lakh crore as of March 2024 compared to a flat growth in the previous fiscal year. Growth was driven by investors following the asset allocation strategy and investing in market arbitrage opportunities. Arbitrage funds saw the highest inflows in the category of more than Rs. 90,000 crore during the fiscal year.

In terms of AUM growth, multi asset allocation funds emerged as the highest category within the hybrid funds marking the growth of 153%, followed by Arbitrage funds with the growth of 127%. However, in terms of assets, dynamic asset allocation / balanced advantage funds emerged as the largest category with assets of nearly Rs 2.50 lakh crore as of March 2024.
Passive funds saw another year of asset growth; the segment continues to benefit from institutional inflows into ETFs having assets of Rs. 6.64 lakh crore as of March 2024. Thiscategory saw inflows of Rs. 42,000 crore in the fiscal year, compared to inflows of around Rs. 61,000 crore for the overall passive funds category.
Debt funds saw a moderate growth of roughly 7% during the fiscal year, with an asset base of Rs. 12.62 lakh crore, following contractions in the preceding two fiscal years. The category also gained in folios, but only slightly, to over 5,000 in fiscal 2024.

Money market and liquid funds saw the largest absolute asset gains among debt mutual fund categories, totaling Rs 40,000 crore and Rs 31,000 crore respectively. Money market funds also saw the second-highest percentage rise in the fiscal year, at 37%.
Investors continued to pour money into mutual funds through Systematic Investment Plans (SIPs) as monthly inflows reached Rs. 19,300 crore in March 2024 from Rs. 13,700 crore in April 2023, reflecting a jump of 40% in one financial year.

The total inflow into all the mutual fund schemes through SIPs stood at nearly Rs 2 lakh crore, 28% higher than Rs. 1.55 lakh crore recorded in the previous financial year. This shows increasing investor confidence and commitment to disciplined investing.

SIP assets stood at Rs 10.71 lakh crore as of March 2024, accounting for more than 20% of the industry assets. Further, the number of SIP accounts reached nearly 8.4 crore with approx 17 lakh new accounts added per month.
The Indian mutual fund industry has a strong foundation for continued growth driven by favorable demographics, rising financial literacy, technological advancements, increasing investor confidence, and diverse fund offerings.

Investment in mutual funds will become even more accessible as a result of the ongoing digital adoption, attracting new participants from smaller towns and cities. Regulatory reforms and investor education programs can further boost investor participation and trust in the industry. India's rising millennial and youth demographic presents a vast opportunity for the mutual fund industry. This dynamic and tech-savvy generation can become the industry's driving force in the coming days.

However, it is important to consider economic factors, regulatory changes, and investor sentiment for navigating the journey ahead.
NJ E-wealth
Secure A Worry Free Retirement with Immediate Annuity
Secure A Worry Free Retirement with Immediate Annuity
Retirement is considered to be the golden phase in your life. It is that time in your life when you engage in activities you enjoy or have always dreamed of pursuing. At this age, no one wants to worry about the income & expenses.

Retirement is also a crucial period of your life because your regular income stops. Will your lifestyle & medical expenses reduce after retirement? No, it continues & may increase due to age. Without comprehensive & mindful financial planning, even your golden years can suffer. So the need of the hour is to arrange for a source of regular & guaranteed income to fund your retirement goals & expenses. This is where retirement oriented life insurance plans come to the rescue. Immediate Annuity Plans are one such investment option that provides a guaranteed income for life.
In an immediate annuity plan, you will start receiving the annuity (regular income) immediately after you invest the lumpsum amount. This income is fixed and guaranteed for the term opted / rest of your life. You can ask for a monthly, quarterly, half-yearly or yearly annuity payment.
Single Life with return of purchase price (ROPP): You will get regular income till you are alive. Upon your death, the annuity stops and the purchase price is returned to the nominee.

Joint Life Annuity with return of purchase price (ROPP) : You will get regular income till you are alive. Upon your or spouse's death, the annuity continues to the survivor. Upon death of the last survivor, the annuity stops and the purchase price is returned to the nominee.
The tax implications are as follows:
a) On the premium paid: The premium paid is allowed as a deduction under Section 80CCC. This is including the maximum allowed limit of deduction of INR 1.5 lakhs under Section 80C..
b) On annuity received: Annuity payments qualify as income in your hands. They are added to your total income and are taxed at your current & relevant income tax slab rates.
Rahul, a 60-year-old businessman, purchases an immediate annuity with return of purchase price. He paid a lump sum amount of ₹100 lakh. He will get ₹50,000 fixed every month till he is alive.

Rahul starts getting regular income of ₹50,000 from the next month onwards. He does not have any other income source, so his income is below taxable limits. Therefore, he does not have to pay tax on this Immediate Annuity Income.

If Rahul unfortunately passes away at age 70, his nominee would receive the guaranteed ₹100 lakh as death benefit. This amount helps him to secure his family's financial future in his absence.

In all Rahul paid ₹100 Lakh,
Enjoyed ₹60 Lakh in his retirement years.
Plus the family gets back ₹100 Lakh upon his death.
Being a retired person, as your regular income stops, you don't invest to spend later. You start using your investments or savings for all your needs.

Immediate Annuity plan is a perfect solution as they help you create a regular, guaranteed & fixed income from the wealth that you have accumulated during your earning years.
If you do not have an income, you have to depend on others. With a regular income from immediate annuity, you live life on your terms.
The average lifespan has increased from 60 years to over age 74 in the last few decades. With better healthcare facilities & improving quality of life, it is expected to increase further. Hence, you need a regular income source as long as you live.
Health problems & health care expenses increase with age. A guaranteed regular income will help to manage them efficiently.
This plan shields you from stock market fluctuations and investment risks. In contrast to mutual funds, equities, bonds, your income from an immediate annuity plan is not impacted by the market volatility or changes in interest rates.
This plan helps you to pass on your legacy to your loved ones. With return of purchase price (death benefit), your nominee gets back the premium paid. This is a very attractive feature to secure your family's future after your demise.
Immediate annuity is a simple plan to understand & decide upon. Once you purchase, you don't need to make further decisions or monitor performance.
Annuities provide a guaranteed regular income for as long as you live.
In your retirement years, you want an investment that offers a stable, regular income and more importantly safety on your investment amount. Retirement is not an age where you take risks on your hard earned life's savings. With Immediate Annuity, your money is safe & secure.
Retirement planning is crucial to ensure a comfortable and financially secured future.

Immediate Annuity could be the best investment decision to enjoy the second innings with your loved ones. The right decision today will make sure you do not have to depend on others in your old age.

So, if you are nearing retirement and you have a retirement corpus available, invest in an immediate annuity plan and get assured income for your lifetime. A Plan that frees you from the worry of income post-retirement.
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Fund Manager INTERVIEW
patner Interview
Mr. Shridatta Bhandwaldar
Head - Equities, Canara Robeco

Yash Shantaram Khanolkar (ARN-250374)

Yash Khanolkar

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"We have taken due care and caution in compilation of this E Newsletter. The information has been obtained from various reliable sources. However it does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions of the results obtained from the use of such information. Investors should seek proper financial advise regarding the appropriateness of investing in any of the schemes stated, discussed or recommended in this newsletter and should realise that the statements regarding future prospects may or may not realise. Mutual fund investments are subject to market risks. Please read the offer document carefully before investing. Past performance is for indicative purpose only and is not necessarily a guide to the future performance."

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