Long term strategies in investing

I was in my office when a marketing person from a broking firm came to me and offered a deal. He asked me to open a demat account and day-trade based on their advice. They promised, almost, that I will make 2% every day. I was astounded by this proposal. 2% every day means 400% every year, assuming the market is open 200 days a year. This means I will have 6 crore and 25 lakhs after 4 years if I start with 1 lakh today, thanks to the power of compounding. Amazing return, isn’t it? Where are you Mr Buffet? If this is so easy, I wonder why many people who day-trade, are not millionaire and billionaire. I am not trying to criticize people who do day-trading. This is certainly a legitimate practice and there have been speculators who have made killing in the market by day-trading.

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Tips to Maximize Gains while Selling Shares

Long term investment is a fine way of building wealth over time. We must remember that we cannot use this wealth unless we liquidate the investment, and convert it into cash. Many times, we are stuck with wrong investment choices and do not liquidate because of fear of converting notional loss to real loss. Sometimes, we keep stocks for longer period even when the stock has run up to its peak and has given us expected returns. The reason is many investors do not know when to sell their investments.

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Portfolio Management Process

Portfolio management is managing a set of investment assets with the objective of maximizing the overall returns for the given risk. The important point to focus on is overall risk and return. Building a portfolio mix of stocks and bonds is a way to diversify the investment risk that arises as a result of concentrating the investment in one type of assets or few assets. Portfolio management is a reasonably simple process. Unfortunately making something simple is not how the world operates. Portfolio management or even investment is made difficult by us because of our greed of earning extra ordinary returns without our homework and missing good investment opportunity because of fear of losing the money. Hence portfolio management is important.

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How to Save Capital Gain Tax on Property

You bought a property in 1998 in 12 lakhs. This is 2013 and prices seem to have peaked. You decided to sell your property and you got a customer willing to pay a sum of Rs 60 lakhs. You are gung-ho about receiving such a big sum and then you read about long term capital gain (LTCG) taxes. Almost 1/5th of your profit is going to go to the Government. You wonder whether this is going to be right decision. When you analyse post tax gains, your enthusiasm plunges.

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Dividend vs Growth option in Mutual Funds

In any investment, the objective is to make money. Once this is taken care of, the second objective is how the individuals want to receive it. They can receive periodic returns from their investment; they can reinvest the returns in the same asset whenever it is paid; or they want to build the capital appreciation so that they can sell the investment in future and earn a handsome return on their investment.Thankfully, mutual funds understand this and they usually give all the three options. The options are dividend, dividend reinvestment, and growth.All these choices have different implication on cash flows and tax.

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Capital Gain Tax on Real Estate Investment

Real estate investment is a big investment for all of us, but there is much confusion over capital gain tax on real estate, tax policies, tax brackets, indexation etc. While most of us buy home to live in, there is increasing number of investors who invest in real estate to trade and make money through price appreciation. The charm of real estate as an investment has gone down since last couple of years but there will be demand in very near future. Most of the investors, while very adept at buying properties, find it hard to deal with taxation after selling the property. In this article, we will clarify some of the taxation issues related to real estate investment.

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