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Should You Invest in SIPs when the Market Is Rising?

As a new investor if you wish to invest in mutual funds or make new investments to achieve your financial goals, then you would have wondered if this was the right time to invest in SIPs.

Investors generally believe that if they invest in rising markets, they will earn lower returns because further growth may be limited.

The meaning of SIP in mutual fund is that you invest a certain amount at regular intervals on a weekly, monthly, quarterly or bi-annual basis.

Any time is a good time to start investing through an SIP in mutual fund meaning as long as you invest regularly despite the market conditions. Timing the market can be a meaningless activity as it is challenging to predict market behaviour.

Investing via SIP in mutual fund means timing the market becomes futile and you can focus on ‘time in the market’. When you invest in SIP meaning investment, you acquire more mutual fund units when prices are low so when the market rises, it results in higher returns. When prices are high you acquire fewer mutual units when prices are high. This lowers your average investment cost over a period. However, one should note that investing in SIP are subject to market risk and do not assure a profit or returns or protection against a loss in a downturn market.

It is important to consider the following factors to get the best out of your investment:

1) Select worthy schemes

Different mutual fund schemes have different investment strategies, objectives, risk profile, etc. Select schemes that meet your financial goals, risk profile, and investment objective. Also consider qualitative parameters like the efficiency of the mutual fund house’ systems and processes, the fund management team, and portfolio characteristics. Once you have determined your requirements, select the mutual fund scheme by examining risk-reward parameters. Do not be fixated on the fund’s past performers because past performance is no indicator of future returns.

2) Invest the right amount

Though the mutual fund scheme is good, you could fall short of reaching your goal, if you do not invest a sufficient amount. The amount to be invested regularly will depend on your desired corpus as well as the investment goal. Use an SIP calculator to calculate returns to be earned on the investment amount meant to receive from SIPs. You should adjust the investment amount for inflation.

3) Ignore the market noise

Erratic market conditions can make investors nervous about investing further. You may decide to stop or redeem your SIP investment whenever the market turns volatile. However, you can partake of the benefits of SIP investment meaningfully only if you invest regularly despite the market conditions.

If you stop SIP or miss instalments, you might forgo the advantage of compounding and thus miss your investment target. Therefore, it is important to continue investing till you meet your goal.

To conclude

Keep in mind that equity investments take time to grow. In case of SIP, give each instalment sufficient time to grow and generate long term risk adjusted returns. As you start approaching your goal, gradually reduce your equity exposure to invest in a more stable and less risky investment avenue, such as debt mutual funds and bank deposits.

Advantages of ELSS Investments

ELSS (Equity linked Savings scheme) investments is a tax-saving investment option under Section 80C of the Income Tax Act, 1961 that invest a scheme corpus in equity or equity-related instruments. They have the following features:

80% of the total corpus (minimum requirement) is invested in equity and equity-related instruments
The fund invests in equity in a diversified manner across different sectors.
There is a lock-in period of three years with no maximum tenure of investment.
Income is taxed as LTCG under the prevalent tax rules due to 3 years lock in period
ELSS investments are handled by professional fund managers and are available with almost all the mutual fund houses in India.

ELSS funds are tax saving schemes as the ELSS investment limit in term of tax benefit stands at Rs 1.5 lakhs a year i.e. a tax exemption up to Rs. 150,000 from one’s taxable income under Section 80 C of the Income Tax Act. You can however exceed the ELSS investment limit and there is no cap on the investible amount.

An investor can decide on an ELSS investment plan keeping these factors in mind.

Given that ELSS funds are predominantly invested in the equity instruments, has potential to provide long term risk adjusted returns. An ELSS investment plan is good option for an individual who is willing to invest for a medium to long duration.

ELSS investment option can be in the form of:

SIP: You invest a certain amount at regular intervals on a weekly, monthly, quarterly or bi-annual basis. For a first time investor, SIPs are a great method of capital protection.
Lump sum investment: These are best suited for self-employed individuals, as well as investors who do not have a consistent source of income.
SIPs have a 3-year lock-in period that matures in stages, but lump sum investments are unlocked at once after 3 years.

With the help of an ELSS calculator an investor can calculate the returns from a potential ELSS investment option i.e. SIP or Lump sum investment. By using the ELSS calculator, one can align one’s ELSS investment and requirements together and decide the best ELSS investment option.

ELSS investments is one of the best way for new investors to enter the stock market. The lock-in period of three years in these schemes will prepare investors to weather the volatility that may come with investing in stock markets.

However, investing in ELSS investment means that one must have a long term investment plan.

Investing in the equity market through ELSS investments has potential to generate long term risk adjusted returns. That is why invest in equity mutual funds such as ELSS can be linked to the long-term financial goals such as retirement, buying a house, etc.

Disclaimer: The views expressed here in this Article / Video are for general information and reading purpose only and do not constitute any guidelines and recommendations on any course of action to be followed by the reader. Quantum AMC / Quantum Mutual Fund is not guaranteeing / offering / communicating any indicative yield on investments made in the scheme(s). The views are not meant to serve as a professional guide / investment advice / intended to be an offer or solicitation for the purchase or sale of any financial product or instrument or mutual fund units for the reader. The Article / Video has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Whilst no action has been solicited based upon the information provided herein, due care has been taken to ensure that the facts are accurate and views given are fair and reasonable as on date. Readers of the Article / Video should rely on information/data arising out of their own investigations and advised to seek independent professional advice and arrive at an informed decision before making any investments. None of the Quantum Advisors, Quantum AMC, Quantum Trustee or Quantum Mutual Fund, their Affiliates or Representative shall be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary losses or damages including lost profits arising in any way on account of any action taken basis the data / information / views provided in the Article / video.

Four Tips to Qualify for Small Business Loans in Charlotte, NC

Getting small business loans in Charlotte, NC, can take a lot of time. But if you know whether you meet a lender’s qualifications in advance, you can avoid potential frustration and hassles.

Below are five steps that you should take to qualify for a small business loan.

#1 Build Good Personal and Business Credit Scores

Personal credit scores reflect your ability to repay personal debts, such as a mortgage or car loan and credit cards. Small business lenders need a personal credit score because they want to learn how you manage your debt. The higher your score, the better are your chances of getting a loan.

One of the quickest ways to improve your personal credit score is paying bills on time and in full and disputing any inaccuracies in your report.

You can build good business credit by keeping public records clean and establishing trade lines.

You would require good personal credit and excellent business credit to get small business loans in Charlotte, NC, from banks or a government-backed SBA loan. However, online lenders may be more flexible with credit scores, emphasizing your track record and company’s cash flow instead.

#2 Develop a Strong Business Plan

Lenders would want to know how you plan to use the money and see that you have a strong ability to pay. They may ask for a business plan that includes the loan’s purpose and how you expect it to increase profits.

Your business plan should also include the following information:

Ï Business description

Ï Product or service details

Ï Industry analysis

Ï SWOT analysis

Ï Management team

Ï Operations plan

Ï Current and projected financials

Ï Sales and marketing strategy

Your business plan should clearly demonstrate that you won’t have cash flow problems to cover ongoing company expenses and the new loan payments. It will give lenders confidence in your business, and you would most likely get the required small business loans in Charlotte, NC.

#3 Get Your Legal and Financial Documents Ready

You need to do a lot of paperwork when you apply for small business loans in Charlotte, NC, from banks and other traditional lenders. Some of the legal and financial documents you must need are:

Ï Business license

Ï Articles of incorporation

Ï Personal and business income tax returns

Ï Personal and business bank statements

Ï Balance sheet and income statements

Ï Financial projections if you have a limited operating history

If you have strong business finances and a good credit score, some online lenders may provide you rates comparable to bank loans. They may even require fewer documents and offer faster underwriting.

#4 Provide Collateral

To qualify for small business loans in Charlotte, NC, you may need to produce collateral to back the loan. It’s a way lenders can recover their money if your business fails.

Some online lenders may not need collateral, though but would ask for a personal guarantee. Each lender has its own rules, so make sure you ask enough questions if you are clueless about what’s required.

Anchor Yourself in the Present

When you find yourself paralyzed with indecision, what can you do? Anchor yourself in the present.

One definition of paralysis is “a loss of control, feeling or function.” And the most common scenario in which we find ourselves paralyzed is when we’re required to make a decision: there are too many details or not enough,and there’s not enough time to make a good one. Where does it go wrong?

Control .Your control is affected when you can’t settle on a course of action, or you have no idea or clue what to do, either in that moment or the next. Why? Sudden emergencies (as if there’s any other kind), or too many demands and issues vying for your attention –all at the same time– and you freeze. So what do you do?

Breathe, step back, and anchor yourself.

Take time to compose yourself and drum up some questions. If you’re familiar with the 5 points of journalism (who, what, when, where and how) throw them in: What’s going on? Who needs help, with what, when and how? Move on: How important it it? Should you handle it, or can someone else do it? When’s the deadline?

Keep asking questions. The more you find out, the more data you have to work with that clarifies the situation, and you get starting points to spur you to action.

Another great help is to have a clear set of priorities and linked daily goals. When you have both you can build on your goals, structure your workday around your priorities, and use both as a compass to guide you in rough waters. It also makes your day easier if you set things up so that common interruptions or issues can be filtered out — whether you use technology (think voice-mail and spam/in-box filters, to start) or routines (“A place for everything and everything in its place,” simplifies morning preparations enormously.)

Feeling .When you’re stressed, you feel besieged or beleaguered with demands. All the voices in your head telling you you SHOULD. All the voices outside your head saying ME, ME, ME, OVER HERE. It’s especially hard when you’re at a vulnerable moment –you’re tired, distracted, hungry or sleepy.

Take a break, go for a walk, get your heart pumping and your blood oxygenated. Make or have a quiet place, somewhere close — go to it, have people respect it by being clear about your intentions to re-connect with yourself. Have a calming ritual.

Function . We’ve seen this in personal computing — the whole shebang freezes, overloading at just that one app, that one click, and somehow there wasn’t enough RAM to handle the hiccup. Again, step back, breathe, anchor. Asses, break down and prioritize the mess that’s demanding your attention. Work your way down the priority list. Use real focus and single-task. If it’s still too much, ask for help. Don’t bully through the mess alone.

Here’s a short list of what you can say to buy yourself more time to collect yourself:

YES, NO, Not right now, Later maybe.
What’s the real issue here?
Let me think about that. In the meantime: a) what do you suggest we do in response? b) can you get more data before we talk again about it?
What are the concerns of the team regarding this issue? What do they need to resolve it on their level? When they do this, when can we expect it to change?
Let someone else handle that, they should know where it needs help, they made it./ That’s their responsibility let them come up with a solution to address it.
I need time to think about it. We can’t force the issue at this point. Let’s wait and see.
It’s not that important, let go. Your time is better spent on your high-value issues.