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...

  What is Swing Trading – Its Strategies, Setups Swing Trading Swing trading is a short-term stock trading style. It mainly benefits individuals who wish to accumulate wealth by trading stocks for a short period of time. Swing trading has the potential to provide huge returns; however, it comes with its own set of risks. Swing traders hold their positions as per the market trend. By taking advantage of the short-duration price movements, swing traders trade their stock strategically in a bid to earn substantial profits. Read on to know more about swing traders and their trading strategies.  What Is Swing Trading? Swing trading is a technique used by stock market traders in which they open and hold a position for more than one trading session but not longer than a few weeks or a couple of months. Swing traders buy and sell stocks methodically based on technical and fundamental analysis along with studying market price trends and patterns to gain short-term profits.  These ...

  ✅ What is Home Loan? What is the purpose of Housing Finance? A Home Loan is an organised financing solution to buy a plot, home or develop/ construct/ renovate the existing residential unit. The property in the deal acts collateral and therefore home loans are essentially secured loans. The rate of interest is also attractive for Home Loans, compared to other types of loans. The loan amount is available as Loan-To-Property Value and that too for a long tenure ranging from 10 to 30 years, offering maximum ease of repayment to the borrower. You can apply online or offline for Home Loan in India now. There are exclusive tax benefits available on Home Loans, besides PMAY CLSS for the first time home owners. ✅ What are basic eligibility criteria for Home Loan? To be eligible to apply for a Home Loan in India, the applicant (s) needs to prove the repayment capacity. Mainly factors such as age, income, employment status, place of residence, and property value are considered by lenders t...

Nifty vs Gold Returns over 15 years (2006-2023) – Where to invest? Nifty and Gold are 2 investment options that are favorites among Indian investors but both the investments belong to different types of asset classes. Nifty belongs to equity asset class while Gold belongs to commodities. Inherently, both asset classes have different characteristics when it comes to evaluating the risk weighted returns Equities are known to perform better when the economy is doing good and businesses are booming with profits while commodities like Gold are known to preserve investment value and protect capital when the economy is weak. Interestingly, over a period of 15 years both the types of investments have given an almost identical average annualized returns of ~12% which in itself is a very good rate of return. To get that into perspective, a return of 12% compounded over 15 years, increases your invested capital by 5.5x or to keep it simple, ₹1 Lakh invested becomes ₹5.5 Lakh. Even though the retu...