Intermediate

Question: How do you define value? Which are your preferred metrics of value?

I was told I could address any of the following four questions in my article. But why stop at one if you can go for all four?  Especially if all four are linked inexorably in some form.

The questions and the corresponding answers are below -

As the parent of two teens I have seen them evolve over time. From the joys of the new born who holds you tight it is quite an eventful journey till they get to adulthood and spread their wings. Having just been to my elder child’s graduation (12th standard) and with adulthood now just a few days away it has been quite a satisfying journey.

UTI Equity fund has a strong predilection towards investing into businesses that have strong and steady profile of free cashflow generation, high RoCEs through the cycle and a high visibility of long term growth.

Here is a simple quiz question. “What do you need to meet life’s major financial goals like children’s higher education and retirement?” You have got it right if your answer is ample savings. But that was the easier part. Here’s the challenging question, “How do you create ample savings for these needs that require substantial sums?” For an individual investor, getting the right answer involves quite some doing as this involves making the right investments over long periods.

What comes to your mind when you think of making investments for future needs?

When it comes to different investment options in India, fixed deposits (FD) top the popularity charts. It is not unusual to find people having invested in them for all kinds of needs, be it those for the longer-term or to meet imminent needs. Unfortunately, this often means ignoring four potent dangers faced by FDs.

Four Limitations Of Fixed Deposits

It is a fine balance every investor needs to achieve. We need to pay the taxes due from us. Yet, we need to plan our taxes especially on our investments. The idea is to make more money available for growth so that we save ample amounts for future needs. But how does one do that?

“Change is the only constant” is an adage which applies perfectly to not just the macroeconomic environment but also to the equity markets in general. Behind every ‘fall in the market’ there will always be some events just as behind every ‘rally in the market’ there will be other events.  It is the circle of life for markets. At some point the markets will get over-valued, events seen as negative will happen; resulting in markets getting “de-rated” and dropping into the “cheap” zone.

Asset allocation: The on-going equity market drop once again highlights the need for investors to follow a prudent asset allocation strategy. Every asset class goes through cycles. Equities are a volatile asset class with attractive long term returns. Similarly fixed income returns can be attractive over shorter time periods though over the longer term it typically lags equities. This reinforces the need for asset allocation in order to manage risk and optimize returns.