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Valueraj Associates Private Limited

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Financial Wisdom

Financial Wisdom

Financial Wisdom

For senior citizens, there are several pension solutions available such as bank fixed deposits, post office schemes, govt pension schemes, annuity plans.However, very few know that bond mutual funds offer a better alternative solution with superior returns at lower tax liability.

Find below various pension solutions available vis-a-vis solution with bond mutual funds.

For wealth creation, many investors opt for investing only into real estate assets assuming that the returns would be superior to any other investments. However, historic data indicates that equity mutual funds have offered similar or better returns compared to real estate investments. Hence, it is wise to be invested in financial assets such as equity mutual funds too for better liquidity and diversification.

Find below some interesting real-life examples on returns of premier properties and select equity mutual funds.

With increasing income levels of individuals, tax efficiency of investments has become a key driver for investment decisions. In comparison to bank fixed deposits, debt mutual funds offer higher tax efficiency due to its inherent indexation benefit. For individuals falling into higher tax slabs, the tax outgo considerably reduces in debt funds as compared to bank fixed deposits.

Find below a real-life example on tax efficiency of debt funds when compared to fixed deposits.

For wealth creation, it is always necessary to be invested in financial assets with inflation-beating returns. Equity mutual funds offer us a right choice in this regard, as they generate better post-inflation returns in the long-term.

Find below the real-life returns of lump sum investments in various equity mutual funds for different tenures.


History has proved that stock market returns are highly volatile in the short-term. However, staying invested in stock markets for long-term can definitely be rewarding for investors.

Find below the historic returns of Nifty50 over last 20 years.

Stock markets always tend to be volatile and never predictable. They go through ups/downs depending on the levels of optimism/pessimism in investors.Therefore, deep corrections are common in any year and SIPs in equity mutual funds are the right means to catch these bottoms.

Find below the Nifty50 index fall from peak in each financial year in the past 20 years.

Stock markets never grow linearly. There can be sudden rises in a single day at times. Staying invested in stock mutual funds is the only way to catch these rises, rather than attempting to time the market.

Find below the maximum rise of Nifty50 index in a single day, in each financial year in the past 20 years.

Time waits for none, neither do our financial goals. The recent pandemic has taught all of us many lessons on how situations can become vulnerable unexpectedly.

Hence it is mandatory for all of us to have a clear conviction on savings and build a proper portfolio of financial products. A systematic and scientific process to achieve this is “Financial Planning”.


Investing fixed amount systematically at regular intervals is referred to as systematic investing. This mode of investing in equity mutual funds evens out the risk due to market volatility and facilitates discipline in investing regardless of ups and downs in the stock market. This enables higher returns by averaging out cost of investment in the long-term.

Find below the real-life returns of SIP investments in various equity mutual funds for different tenures.

As like there are stock market indices such as Sensex/Nifty, there is House Price Index (HPI) for residential real estate market in India. This index is computed and published by RBI on quarterly basis. The historic data of this index indicates how the prices of residential properties have grown in recent years.

Find below the returns on real estate investments based on HPI for various cities across India.

Stock markets may react violently to certain news/events. There can be sudden steep falls in a single day. However, you need not panic at such times as these could be momentary. Instead, stick to your investment plan, as the markets may recover eventually.

Find below the sudden single day falls of Nifty50 index in each financial year in the past 20 years.

It is a common misconception that smallcap funds and midcap funds outperform largecap funds. However, there is no such outperformance on consistent basis across various tenures. Therefore, you better diversify your investments in stock funds representing all market caps.

Find below the historic returns of various market caps in India over last 15 years.

Global investing would no doubt gives you the opportunity to invest into other stock markets. However, this comes with risks related to regulatory changes, currency fluctuation and political instability in the respective countries. Moreover, there are instances of certain markets giving very low returns for prolonged periods of time.

Find below the performance analysis of four major global indices against Nifty50 over past 15 years.

As a thumb rule, valuation of stock markets can be gauged using two fundamental ratios P/E (Price to Earnings) and P/B (Price to Book). Generally, stock markets are considered to be undervalued when Nifty50 index P/E is less than 15 or P/B is less than 3. Likewise, stock markets are considered to overvalued when Nifty50 index P/E is more than 22 or P/B is more than 4.

Find below our analysis on historic P/E and P/B values of Nifty50 index over past 20 years.

In investing, lower the risk lower the return and higher the risk higher the return. Investments in Stocks and Gold come with higher risk as compared to FDs and Bonds. To commensurate with this risk, Stocks and Gold give higher returns as compared to FDs and Bonds.

Find below our analysis on historic returns of various asset classes in India over last 20 years.

India is one of the fastest growing economies in the world and its nominal GDP (Gross Domestic Product) is expected to reach $5 trillion in the next few years. As the nominal GDP grows, the revenues/profits of listed companies also grow. This results in increase in stock prices and thus the stock market indices.

Find below our analysis on historic growth of India’s nominal GDP and historic returns of Nifty50 index in the past 20 years.

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