Wise Investing

Hello friends let's understand this Xirr & CAGR One of the main reasons behind mutual fund investments is expecting inflation-beating returns, if not more. However, whenever people hear about a certain rate of return generated by mutual funds in India, they become doubtful of what to expect, like X person in the example given below: X person wanted to invest in suitable mutual fund schemes and started checking the expected returns. On digging further, he found that some popular schemes offered a five-year return of 10%, a 3-year return of 8%, and so on. These numbers confused him and terms like CAGR and XIRR, written next to returns, added to the confusion. Many individuals like X person find it challenging to understand such terms. Here, we will cover CAGR vs XIRR in detail to help you understand the differences between the two. WHAT IS CAGR? CAGR stands for Compounded Annual Growth Rate and is the most common tool to measure the returns generated by a mutual fund scheme. It s...

Let's understand  What Is Hedge Accounting? Hedge accounting is a method of accounting in which entries to adjust the fair value of a security and its opposing hedge are treated as one. Hedge accounting attempts to reduce the volatility created by the repeated adjustment to a financial instrument's value, known as fair value accounting or mark to market. This volatility is reduced by combining the instrument and the hedge as one entry, which offsets the opposing's movements. KEY TAKEAWAYS Hedge accounting uses one entry to adjust the fair value of a security and its opposing hedge. The purpose of a hedge is to reduce volatility associated with value fluctuations on an investment that is not directly related to the investment's performance. There are three categories of hedge accounting:  fair value hedges,  cash flow hedges, and Net investment hedges. Understanding Hedge Accounting A hedge fund is used to lower the risk of overall losses by assuming an offsetting positi...

  Fear can be described as “a future expectation of being worse off than you are now.” We all suffer from fear at one point or another. Only through regular, candid introspection, whereby you ask yourself direct questions and demand direct and honest replies, can negative influence be diminished or eradicated. As you read through this description of the six basic fears, remember that to be truly rich, the actions you take each day—how you think, with whom you associate, and what you do—must correspond with the type of life you want. Like poverty consciousness, fear must be mastered, or it will master you. 1. Fear of poverty Both wealth and poverty are the offspring of thought. Fear of poverty crushes ambition, stymies imagination, feeds negativity, breeds cynicism, invites conflict, promotes selfishness, and encourages quitting, leading to hatred, poverty, illness, and misery—in other words, permanent defeat. Decide what you want in your life, always remembering that the poverty mi...

How 1 lakh spent on solar plant is better than FD? Solar panels can make us energy sufficient by processing Sun Energy. It is a brilliant way to curb ongoing climate change. From the Paris Agreement to UN debates, the climate has always been a major concern. Upgrading to Solar Panels is a real contribution that we can make towards our healthy future. Using solar energy can make everyone get rid of electricity obtained by exploiting mother earth. There will be no more air pollution, water pollution, global warming etc. resulting out of using fossil fuels for our needs. Apart from environmental satisfaction, solar plants can also make us financially happy. It breaks the trap of paying hefty electricity bills. Additionally, Solar plants investments will give higher returns than Fixed Deposits. This article will explain the concept in brief.  What are Fixed Deposits?  FDs are defined are the financial instrument with a safe rate of interest. Fixed deposits are “safe investment, of...