100 Crore Wealth by Investing 1000 INR in SIP : Power of Compounding

How 1000INR SIP per month can generate 100cr wealth ? It look like distance dream, but believe me its possible and will going to show here how.

Before we begin , lets start with small story :

Long back in time one wise man invented the chess and presented the game to his king. The King was so pleased that he asked the inventor to demand reward anything  the inventor desired.

The inventor’s answered 
“I am a simple man of few wants, he said. My needs are a few. Give me one grain of rice for the first square of the chessboard, two for the second, four for the third and so on. Each square having double the number of rice than the previous square. This is all I ask ,O generous king.”

The King and everyone present was laughing , the inventor could have asked diamonds , gold or land but he just asked for rice grain!! Than King than ordered his minister to give what the inventor have asked for. A week passed. Still no sign of the minister. He was asked to appear before the king immediately.Than minister explain “We are still trying to procure the required number of rice to fill the chessboard, Your majesty. We have collected all the rice of kingdom but still not enough to meet the requirement . ”

The King was shocked when minister told that number of rice grain required is 18,446,744,073,709,551,615. This number is equal to  406763 million ton Rice . In 2017 India produced  111.01 million ton Rice.  

Albert Einstein once said "The power of compound interest the most powerful force in the universe.“

Our grandfathers know this , they used to save money in PPF like products which used  to grow at 12-13% compound Interest  that time and after 20-25 year, small amount turn out into huge wealth. Now this PPF has no longer good investment option as interest drop to 8% which is near to inflation rate.
So the best option available is the Mutual Fund SIP. Many Fund has past record of return more than 18% CAGR for long period of time.

Form that we have selected on of the Best fund which can give you 20%+ SIP return. Here we are recommending to start one small SIP of just 1000INR in our selected small cap mutual fund.Historically this fund has given 22% SIP return and we expecting it to give 20-22% growth further.The real thing is not in SIP amount , but SIP time frame.You can start SIP for your 5 year old kid and later in life the grown up kid can continue it further.Remember first few year is like ordinary time, you notice no gain, but later part compounding do its magic.

Lets look how 1000 SIP can create wealth of 100cr.

As you see in chart , real magic happened after 40 years in SIP.  First 10 year, your 1000 SIP grow to 3 lac , than next 10 year it become 26 lac. After 40 year , you got 10.57 cr. And from 40 year to 53 year , it grow to 113cr. And crazy part is your total investment is just 6.36 lac in 53 year. This is awesome !!

Once in press conference someone asked Warren Buffet, your investment method is simple so why other not able to copy it and become rich like you. Than Mr Buffett replies "Nobody want to become rich slowly."  The power of compounding is simple to understand but hard to implement. Very Few can replicate this.

If you want to know the name of fund  for 100Cr wealth, you can contact us on +91 9033360239.

Be Smart. Invest Smartly.

Mutual Fund Sahi Hai: Performance of 90's Fund

Recent few years many investors joined Mutual Funds and each month now more than 8000cr inflow is coming in market via Mutual Fund SIP.

The AUM of the Indian MF Industry has grown from INR 5.45 trillion as on 31st August 2008 to INR 25.20 trillion as on 31st August, 2018, more than fourfold increase in a span of 10 years!!
Now, MF AUM was 7.66 trillion as on 31st August 2013, so major growth came in 2013-2018 of bulls period only.

For past 2 month Equity market is falling continuously and many SIP started in last 2 years are now showing negative or flat returns. Many of this SIP investors are first time investors and now they are not getting return as they expected from mutual fund. 

To make it clear why mutual fund is best investment to all Mutual Fund investors , we have extract data of mutual fund schemes launched in 90's. This schemes are now more than 20 years old and have seen dot com crisis, 2008 financial crisis and many such big market falls.

Let's have look at the growth of 1 lakhs in this schemes from inception till today (As on 21st Oct 2018)

1lakhs invested in Reliance Growth Fund in 1995 turns into 99lakhs in 23 years. This is the real compounding effect of mutual fund.  

If someone started SIP of 1000INR in Reliance Growth Fund - Regular (G) since its launched (8th Dec 1995) and continued till today (22nd Oct 2018) , than one has invested 2.75lakhs in 275 months and current value of this investment is 57lakhs with CAGR of 22%. Any FD, PPF, Money Back Insurance can not give such a returns, even they can't even give half of this return in this time frame. 

So don't let market volatility change your perception about Mutual Fund . #MutualfundSahiHai

If you have any query about mutual fund  or if you want to start new SIP, you can contact us on

+91 9033360239. We are certified mutual fund advisor and we provide best possible investment solution for your financial goal.

Be Smart. Invest Smarty.

India - The Growth Story.

On this Independence Day we like to share Future Growth story of India, the land of opportunity and some Business which will provide our investors best growth opportunity.

Key Points:

 

• Indian was at 10th Position in Global economy in 2011, and in 2018 we are at 6th Position.
• 30% of Population are young which one of the largest in the world.
• We are the world's faster-growing economies surpassing China.
• Major Reform like bank insolvency code, GST implemented in last 2 year which are the game changer for country.

The Bharat Growth Story Stocks to look for:

Here Motocorp: Staidly farmer’s income is growing and two wheeler is one sector where major chunk of this income will be use. And Hero Moto will be the one key player in this sector.

M&M: M&M is one of the diversified player in segment of Tractor, Agri Machinery, Commercial Vehicles, and now Electric Vehicle.

SBI: The Biggest Public sector Bank of County will definitely lead the financial sector growth.

Maruti: Indian is now 4th largest auto market and many middle class families is shifting from 2 wheeler to 4 wheeler and Maruti competence in Car market in unmatched.

HUL: The FMCG giant has touched all part of county. Growing income of individual is first spent on FMCG essential products.

Voltas: Indian AC market penetration not more than 4% despite being 6th largest economy and this figure is bound to change and Voltas backed by Tata Group is key player for this segment.

Asian Paints: Housing for all is major scheme of GOI and Asian Paint is one of the key players for this boost.

HDFC Assets Management: Indian Mutual Fund AUM is 11% of GDP growth which is lower than much country like Australia, Brazil, and France. With growth of Country huge retail money is likely to flow in Market via Mutual Fund. HDFC AMC with 14% market share of Industry is one of the key beneficiaries.

L&T: From Road to Rail, From Building to Airport, L&T is do all kind of Infra work and no country can grow without it Infrastructure growth. 

TCS: TCS is IT giant of the world. With 4lac+ Employee TCS is driving the Digital Growth of Country.

There are many other story which inclusively take part in growth of Our County. As Investor when you invest in company you are investing in Growth of Country. In next 10 years India has potential to become 3rd largest economy in the world.

You either can watch it happening or take part of this growth by investing in the key drivers of it.

Be Smart. Invest Smartly.

Happy Independence Day.

Big Bigger and the Biggest of Equity market.

For last 12 months Indian Equity market witnessed big shift in sector allocation. While Blue chip Stocks hitting life high , mid and small cap companies are facing huge selling pressure. 

Tata Consultancy Services ltd (TCS), the IT giant after 2 year of consolidation started its new journey. TCS generated 61% return in past 12 month and added 2.87 lac cr in market cap. Also company entered in $100 Billion club of m-cap. TCS is now ranked 82th in term of M-cap in the World.  Management  is confident of future growth and approved buyback of 16000cr at price of 2100 INR which is still premium to current stock price.

Reliance Industry(RIL) also joined TCS in $100 Billion club after its stellar results. In last 12 month RIL generated 43.29% return and added 2.02 lac cr in m-cap . RIL is outperforming in all the sectors and Reliance Jio Infocomm Ltd is consider to be the next big thing for RIL growth in future.

FMCG is consider to be the most defensive sectors and  Hindustan Unilever ltd (HUL) proved it. Even after  stiff competition form Patanjali , company is able to delivered double digit volume growth due to strong demand coming from rural economy. In past 12 month , HUL stock also outperforming with 53.97% return. 

On banking side while most PSU banks are facing NPA issues. And private sectors banks like Axis, ICICI are under pressure due to management and compliance problems, there are two banks HDFC and Kotak which are wining the clients and investor's confidence with sustainable and quality growth. HDFC and Kotak bank generated 28.8% and 45.2% return on street respectively. On NBFC front  Bajaj Finance is the marathon runner for last 10 years. Stock is one of the few stocks which generated 100 times returns in 10 year time. In past 12 month Bajaj Finance generated 67.82% return and added 55thousand cr in its m-cap.

Street is currently favoring this this few giant of market. And like relay race, each day one other take charge to hold the indices at higher levels. Mid cap benchmark is 3000pt down from it high while, Nifty50 is just 100pt away to make new record. Recent Mutual Fund restructuring also one of the major reason of  this widen gap between madcap benchmark return and Nifty return. 

Lack of buying interest from FII side and also from Retail side is one more reason of mid-small cap under-performance . We believe that value investors should build strong long term portfolio by adding quality mid cap and large cap stocks. Mutual Fund is also one of the best route to invest in this market. Good Multi cap Fund  is best option to invest via SIP.

At the end just remember that Rome is not build in one day. Have patience and keep investing.

Be Smart. Invest Smartly.

Avoid this one mistake in Stock Market || Beginners Guide.

Most common mistake most investors do is that they buy price not business. If you ask some person that what stock you want to buy in 10000 INR, 1000 share at price of 10 or 10 share of Price 1000. Then most of the new investor prefer the first.Many still believe that 10 INR stock can go to 100 quickly and they can make huge but this is not the case.

Not all penny stocks become multibagger, 1 in 20 stock only sail through , rest all either depreciate or just remain at same level. Let’s have look at this with example.

Here Name of Stock A is Suzlon and Name of Stock B is Britannia.

In 2013 Suzlon and Britannia were same in size in term of m-cap only difference was the price of both.
After 5 years Suzlon is at same level while Britannia multiplied 7 times. Intelligent investor is one who pick a stock base on the Business model of company not the price of stock.

For any new investors , we highly recommend not to buy any penny stocks until they understand this market. Most of the new investors made mistakes initially and left the market with losses before they realize true potential of market. Comment your value destroyer stocks.

Be Smart. Invest Smartly.

Wealth Creation Idea : Kajaria Ceramics

Kajaria Ceramics is the largest manufacturer of ceramic/vitrified tiles in India. It has 8 Plants- in Uttar Pradesh, Rajasthan, Gujarat and Andhra Pradesh. It offers more than 2,600 options in ceramic wall & floor tiles, vitrified tiles, designer tiles. Kajaria Ceramics exports to more than 30 countries round the Globe.

Financial Performance :

• M-cap:  INR 11633 cr
• CMP:  732 INR (27th Nov 2017)
• EPS: 15.13 INR
• PE: 48.3
• Debt equity ratio :0.17
• Book Value: 82 INR
• Promoter Share holding is 47.39 %.
• DII/FII/FPI Share  holding 29.14%

Why Kajaria Ceramics?

• Company has consistent profit growth of 27.25% over 5 years.
• Distribution Network of strong and loyal 1200 dealers all over the country.
• Company is going to Expand the ‘Prima Plus’ channel network from the current 41 showrooms to 100 showrooms by March 2019.
• Good return on equity track record: 3 Years ROE 27.33%.
• According to CLSA, India expects to build 60 million new homes to be built between 2018 and 2024.
• Smart Cities Mission, Swachh Bharat Abhiyaan (Sanitation for All by 2019), Atal Mission for Rejuvenation, Urban Transformation (AMRUT) and Housing for all by 2022 is expected to provide significant impetus to the demand for tiles.
•  Biggest organized player in Ceramics business in India.
• 29 Year of Business Experience. 
• Due to GST implementation, Organize player like Kajaria get preference in consumers as Price difference between organize and unorganized player decrease.

For long term investment this stock best suited. Next 5-7 year Kajaria ceramics can deliver 3x-5x returns.

Be Smart. Invest Smartly.

Disclaimer : Please take advice of your financial advisor before any investment.

Power My Portfolio Value Pick: Tata Elxsi Ltd.

Tata Elxsi is part of Tata Group providing design and technology solutions. It servers broadcast, consumer electronics, healthcare, telecom and transportation, Infra industries. Company is Leading player in Big Data Analytics and IoT solution. Tata Elxsi’s Industrial Design division helps customers develop endearing brands and products by using design as a strategic tool for business success.
It won International iF Design Award 2017 for design excellence.
 

It’s Transport Design Portfolio includes Indian Multi-Role Helicopter (IMRH), Kochi Metro Rail, Light combat helicopter, Business jet interiors etc. Tata Elxsi's Visual Computing Labs (VCL) is one of the leading animation and visual effects studio in India.Company has good consistent profit growth of 38.35% over last 5 years


Finance Performance:

• M-cap: INR 5804cr
• CMP: 932 INR (21 th Nov 2017)
• PE: 28.4
• EPS:32.7 INR
• Book Value: 91 INR
• Share capital is 31.14 cr of FV 10.
• Promoter Share holding is 44.63 %
• FII/DII share holder include prominent name like Morgan Stanley, LIC, Motilal Oswal

Company is Smart Solution provider for Auto, Transport, Infra segment. And India’s Smart City project will generate huge demand in this segment. IoT, Big Data, Virtual Reality are emerging technology and Tata Elxsi  Market Leader in this technology in India. For Next 5 years , Tata Elxsi can outperform the market. It can deliver 3x-5x Return in next 5 year.


Be Smart. Invest Smartly.

Disclaimer : Please take advice of your financial advisor before any investment.

Power My Portfolio Value Pick : Nilkamal Ltd

Nilkamal is the world's largest manufacturer of molded furniture and Asia's largest processor of plastic molded product. 

 

Nilkamal Core Business  include:

•     Material Handling Solutions,
•     Moulded Furniture,
•     Nilkamal Mattrezzz,
•     Nilkamal Home Ideas,
•     @home, the Mega Home Store Retail Chain

Company has 8 large manufacturing plant across the Indian.Nilkamal products are available in as many as 30 countries. Mr VAMANRAI V PAREKH is the Chairman of the Nilkamal Board of Directors. With 60 years of experience in the plastics industry.Nilkamal Furniture sold on most of the store in India and also online shopping site like Amazon.


Current Price of Nilkamal is 1610 INR (21th Nov 2017).

Market cap: INR 2399 cr

EPS:79.38 INR
PE:19.9

Being dominant player in its sector, this stock has huge growth potential.
For next 3-5 years view, this stock can deliver multibagger returns.

Be Smart. Invest Smartly.

 

Disclaimer : Please take advice of your financial advisor before any investment.

3 Deadly Sins of Stock Market.

Have you ever think why new investors most of time failed in market.  ? Why only few make real money in stock market? What new person in stock market should do or should not do?  If yes I have answer to the root of this problem.

There 3 common mistakes that most investors do. I call them 3 Sins of Stock Market. 

1.Losing Money:

Most Investor knows this basic rule “Never Lose Money”. But still they end up losing money.  Because they keep holding the looser in hope of recovery. Simply say if you have purchased stock and it went down by 20%. And you wait as you not want to lose money. But this same stock has capability to go more 20% down. Not taking loses in market is biggest mistake most of investors do. Short term downside is normal, but if stock is going down for years or not moving for years then this is also one kind of loss as you are missing opportunity to allocate this money to some other good stock.  Remember there is no Successful investor who didn’t book loses. Taking lose is part of Journey and Investor must accept it.

      2. Buying Quantity then Quality:  

      Every new investor does this mistake.  They like buy 100 stocks of 10 over 1 stock of 1000.  Cost is same but he thinks he will get better chance with 100 stocks then 1. But in market price doesn’t matter.  In both case investment amount is 1000. And in both cases if stock goes up 10% you make 100 profits. So your buying decision should not be just on price factor. I have seen stock worth of 5000 in my career which I didn’t added because of price and same stock is now 22000 in 4 years and still going up. And I also seen stock which was 20 buck 4 years ago and still around 20 odd today also. Yes I am taking about Eicher Motors and Suzlon.

         3. Selling Winners:

       This is where successful investor standout form ordinary investor. Buy Right and Sit Tight. When you get stock which has shown potential to go up, you should not sell it for ordinary profit unless it’s really necessary. Stock which went up 50% has capability to go 100%. Smart Investor is one who adds stock on raise not on fall. Averaging should be done for stock which has shown its potential to go up not for stock which has shown its potential to go down.  Buy correct stock and let compounding do its magic.

     "To make money in stocks you must have the vision to see them, the courage to buy them   and         the patience to hold them. Patience is the rarest of the three." — Thomas Phelps

                                                            Be Smart. Invest Smartly. 

Tax Saver Mutual Fund is not just Tax Saver.

Around April most people seeking  for tax saving option and ended up buying product like PPF or Money Back Insurance plan which might the not need at all. Better planning ahead could give you better option to save tax also get good return on your money. Equity Link Saving Schema(ELSS) is the finest way to save tax and generate handy return.

ELSS Mutual Fund investment give you tax benefit under Section 80-C of the Income Tax Act. Also ELSS funds come with locking period of 3 year which minimum of any tax saving option available in India.

ELSS Fund just not tax saver but also great option to generate good return over the period of time.
Let have look of ELSS fund return vs. PPF return.

Type	SBI Magnum Tax Gain Schema	PPF
Date of Investment	01-05-2000	01-05-2000
Investment Amount	10000	10000
Return %	Market Driven	8.8 %approx. (average of 17 years)
Risk	Moderate	Assured Return
Current Investment value	139160	31946
Total Return on Investment	1391.6%	319.6 %

Just look at the numbers, ELSS beat PPF by huge margin. With SIP option one can reduce the amount of risk in ELSS and generate better than average return. There was time when PPF come with 12% return but now it’s come down to 8.1. So investing in PPF now is not wise.
Reliance Tax Save Fund(G) is our pick from all fund.  Its high performance fund in ELSS category. One can start with minimum 500 INR SIP in ELSS fund. Investor can directly invest in Reliance MF from link: Reliance Mutual Fund.  Start your journey of Investment with Tax saving today.

Not taking risk is the biggest risk in life

Be Smart. Invest Smarty.

Learn To Earn: A Beginner’s Guide

Learn to Earn is book by Peter Lynch, one of the Best Fund Manager of all time. He has given a gift on knowledge of Investment in his book.  Unlike The Intelligent Investor, this book for beginner in Stock market.   Today I have completed it and find it quite good for someone to get basic clear.

Chapter one was on History of Capitalism and I didn’t find much interest while reading that. One can skip it if do not have interest on history

Second chapter the basic of investing was quite useful for readers. In this he explains very clearly how to invest in individual stocks and how to gather information about them. It details what a brokerage is, how it functions, why you may or may not want an expensive stockbroker, how to gather information about companies and decide whether to invest in them, what dividends are and how they work, and so on.

In one part Mr Lynch Mentioned:

“You many not triple your money in stock very often, but   you only need few triple in life time to build up a sizeable fortune. Here’s the math: If you start with $10000 and manage to triple it five times, you’ve got $2.4million, and if it ten times you’ve got $590million and 13 times, you’re the richest person in America”

In next chapter Mr Lynch has given information of how company’s life cycle works. At each stage of the company’s life, the risks and rewards of investing were different – it was a growing stock, a steady stock, a value stock, and a growth stock again at various points along the way. Lynch does a great job of explaining this relationship of a company to its stock, making the connection very clear.

And in last chapter he mentioned very important point about investing. Success of companies depends lot on Leadership. And what does that mean to the investor, or the person learning about personal finance? A great leader means you’ll have a valuable stock – a bad leader means you’ll have an under performing stock. Lynch puts a lot of value in this, and he provides a lot of interesting examples and evidence for the argument.

For someone who doesn’t know ABC of Investment, this book is good guide to start. You can get this book from any library or you can buy it for your personal collection from here:

Click to get your copy: Learn to Earn by Peter Lynch

Be Smart. Invest Smartly

The Warren Buffett Way

Appearing on the PBS show Money World in 1993, Buffett was asked what investment advice he would give a money manager just starting out.  “I’d tell him to do exactly what I did 40- odd year ago, which is to learn about every company in the United State that has publicly traded security. “

Moderator Adam Smith protested,  “But there’s 27,000 public companies”

“Well”, said Buffett, “start with the A’s “

Para above is from the book The Warren Buffett Way. One of the great book of Investment one can have on   his/her Library.  Though book talk about Mr Buffett Investment philosophy which might not suite to many Investors today still I believe the core idea display in book will help individual investor to look the business from eye of Mr Buffett.

We here try to highlight essence of book in few words:

Author has classified Mr Buffett all investment in four core principles:

1. Business
2. Management
3. Financial
4. Value

With above four principle you would find how Mr Buffett has discovered his greatest investments like Coco-Cola, Washington Post  , Gillette, Wells Fargo  etc. The idea of finding successful business is still applicable but after Mr. Buffett no such a great investor came who have applied it with such a ease.

Later part of book displays how to manage portfolio and psychology of money. Robert Hagstrom,the author , did true justice to the idea of Warren Buffett in the book. Writing book on such a topic is not easy. He had kept the thing simple that reader can connect with it. Get your copy today if you have not yet read it from here:   The Warren Buffett Way

“We don’t need to be smarter than rest, we have to be more disciplined than the rest” ~WAAREN BUFFETT

Be Smart. Invest Smartly

Man behind D-Mart: Radhakishan Damani.

D-mart is very well known in India.  Retail market chain which is changing the future of Indian retail market with its sound business model.  Since 2000 when D-mart is started, it has not shut a single store of it. This only justifies strategy and sound business model of it.  And the brain behind this successful business model is Indian Stock Wizard RK Damani.

Rakesh Jhunjhunwala consider Mr Damani as his Guru in his success journey of stock market. Mr RK Damani himself is on of value investor. He has made big fortune in Indian stock market by investing in great Indian corporations in late 80’s. At last known equity portfolio value of Mr RK Damani is around INR 2665cr.

Mr Damani started from almost nothing. At age of 32 with absolute no knowledge of Stocks , he enter the family  business of stock broking. He began as a speculator at the stock market. within no time, he understood that watching was not the best way to make or grow capital, and hence, taking inspiration from the legendary value investor Chandrakant Sampat, he started playing for the long term. His philosophy was long term, say 5 to 10 years. He would see if the product has the potential that far in the future. Gradually, his judgement began getting right, and within the next couple of years he was standing at par with the ranks of the biggies on Dalal Street.

As his nature Mr Damani in 2001 , entered in new unknown space which he has no knowledge about, Retail Business. In a market where more recognized and larger counterparts such as Spencer’s (RP-Sanjiv Goenka Group), More Store (Aditya Birla Retail), Star Bazaar (Tata Group-owned chain of hypermarkets) and Hypercity (Shoppers Stop-owned). In such a competitive market   D mart has successfully managed to crack the code in just about a decade.

Now there is an unsaid rule in the market that – “one must not open any store within a 1km radius of Dmart, simply because, no one can beat them on prices.”

As now   D- Mart is coming with IPO on 8^th March , Mr Damani stake of  90 percent will be valued around INR 1600 Cr.  All broker house has given high rating to Dmart IPO so as we also consider it good buy even if one not get hand on IPO,  Investor can buy it after listing long term.

Be Smart. Invest Smartly.