TechProFinancials

Why Goal-Based Planning is Essential to Navigate Market Fluctuations In the realm of financial planning, the importance of goal-based approach cannot be overstated. Here, we delve into why goal-based planning is essential and how it can help you navigate the unpredictable nature of market fluctuations. Understanding the Pitfalls of Improper Planning While many investors aim to maximize their earnings, they often do so without a structured plan, often keeping their investments solely in one asset class ( equity ). While this approach can yield high returns in a bullish market, it also exposes investors to substantial risks. When the market declines, these investors experience greater losses and may panic, leading to ill-timed decisions that aggravate their financial woes. As long as you are working / earning, the impact of market fluctuations may not be felt significantly. Day-to-day expenses are typically covered by your income, and any losses in your investment portfolio can b...

  How 2024 Went The year 2024 for the Indian stock market was a blend of highs and lows, capturing both the strengths and challenges faced by the economy and investors. The market saw significant gains, with the Sensex rising by ~8% and the Nifty soaring by ~9.5%, with the Sensex hitting an all-time high of 85,978.25 on September 27, 2024. Key factors contributing to the market's success included strong domestic institutional investor (DII) support, robust corporate earnings in the first half of the year, and proactive government policies aimed at moderating inflation and potential interest rate cuts by the Reserve Bank of India (RBI). Additionally, mutual fund SIPs peaked in November 2024, with a monthly contribution reaching Rs 25,320 crore, reflecting the growing interest and confidence of retail investors in mutual funds as a reliable investment avenue. However, the year was not without its challenges. October witnessed significant foreign institutional investor (FII) out...

 Investing is a crucial component of wealth creation, and real estate has long been considered a reliable avenue for generating passive income. However, when compared to goal-based financial planning through mutual funds, investing in multiple real estate properties often comes with limitations that hinder financial flexibility and long-term wealth optimization. Here's why goal-based financial planning emerges as the superior approach. Real Estate vs. Goal-Based Financial Planning Capital Efficiency : Real estate investments require substantial upfront capital and involve ongoing costs for maintenance, taxes, and property management, locking away funds for long periods. In contrast, mutual funds are accessible with small amounts, and Systematic Investment Plans (SIPs) encourage disciplined savings without a large initial outlay. Liquidity : Selling a property to access funds is a time-consuming process. Financial emergencies demand quick a...

 Sustaining Investment Goals Through Market Volatility Introduction In the world of investing, market ups and downs are normal. While rising (bullish) markets can make investors feel optimistic, falling (bearish) markets often bring about uncertainty and fear. For long-term investors, staying steady during market downturns is key to reaching their financial goals. This article discusses how long-term investors should think and act during bearish markets. The Long-Term Investor's Mindset Focus on the Bigger Picture One of the main principles for long-term investors is to not get influenced by short-term market movements. Bearish markets, marked by declining mutual fund unit prices and economic pessimism, can test the resolve of even experienced investors. However, it’s important to remember that market downturns are a natural part of the economic cycle. Historically, markets have always bounced back, and those who stay invested often see substantial gains when the market r...

The debate between investing in equities versus real estate has been ongoing, with individuals often choosing based on their personal preferences and requirements. In the Indian context, many people aspire to own a home early in life due to its emotional importance. However, from a wealth creation perspective, which is the superior option—real estate or equities? Let's explore this through a real-life example: In 2011, a young working couple (H-27, W-24) considered purchasing a house in a fairly good location within a tier 1 city. The property was priced at ₹85 lakh, and with their savings, they planned to take a ₹70 lakh loan, resulting in an approximate EMI of ₹70,000. The husband's father, a long-term investor, advised the couple to consider investing in the equities instead, especially since they already owned other ancestral properties and only intended to rent out the new property. Despite the couple's desire to own their property, the father proposed an alternati...

Why RED is color of Opportunity  On August 5th, global markets experienced a crash, affecting economies in countries such as the US, Japan, and India. This significant downturn, often termed as "bloodbath," is not unprecedented, nor will it be the last. My aim here isn't to investigate why markets fallen; experts have already provided their analyses. Instead, I intend to shed light on how investors like us should react in such scenarios. Should we panic and sell? Before offering my perspective, let's review market behaviour over the past 10-15 years. Revisiting past events: In 2008-09, the peak Sensex reached 21,206. The collapse of Lehman Brothers and the Satyam scandal led to a market drop, hitting a low to 7,697—a decline of 63.7% . To put it simply , an investment of INR 100,000 would have fallen to approximately INR 37,000. However, within 1.5 to 2 years (by 2010-11), the peak recovered to 21,108,—an increase of 174% from its low. Moving forward to 2015...