Dhan Investsmart

Dhan Investsmart Dhan Investsmart is a Financial Planning & Investment Advisory firm. We help in providing financial stability and achieving financial long term goals. Mr.

Dhan Investsmart is a Financial Planning and Investment advisory firm which was founded in April 1994 by Dhanapal S Pachai. He is an ex-banker in SBI and was posted abroad, in Kuwait from 1983-86. He assisted NRI's in channelizing investments in India. Then he left SBI to start his own firm in 1994 which focused on helping NRIs/Residents in buying and selling shares in Indian Stock Market. In 1995

, the firm started marketing of Mutual Fund schemes. Dhanapal believes in long term investing. Today, the firm manages the portfolio of HNI's from Delhi, Chennai, Bangalore and Mumbai. The firm's AUM is 25 crores and as of 2015 it manages the investment of 500 clients and 300 families.

Journey of Sensex
04/01/2019

Journey of Sensex

15/09/2015

Economy Fact

India will become the largest economy in the commonwealth in 2018 & the third largest economy in the world by 2024

Source: Center for Economics & Business Report

20/07/2015

Dhan's Knowledge Series - Savings & Investment :
Part 7 : Mutual Funds :

Mutual funds combine the savings of a large number of investors and manage it as a single pool of money. Instead of the investors worrying about which stock or bond or commodity to invest in, professional fund managers do the job. Mutual funds are run by mutual fund companies, also known as Asset Management Companies (AMC). For individual investors who don't have the time to study and research investments, mutual funds are the best option for reaping the benefits of diversified investments with minimum effort. In most funds, its possible to start investing with as little as a few hundred rupees. Also, unlike many other investments, mutual fund investments are highly liquid and can be withdrawn without any delay.

Diversity of Funds :
There are a wide variety of mutual funds with a wide range of risk levels, profit potential, and quality of fund management.
Funds that invest in equity offer the highest potential returns with the highest risk. At the other extreme, there are funds that invest in short-term bonds and deposits which offer returns that are in the range of what bank deposits offer with a high degree of safety.

Benefits of Mutual Funds :
1) Instant and easy diversification
2) Professional research and investment management
3) Variety
4) Convenience
5) Tax Efficiency
6) Transparent, well-regulated industry
7) Providing access to inaccessible assets

Capital Protection :
Mutual funds do not offer any capital protection in a legally enforceable way.Mutual funds invest in market-linked investments and losses are always possible. However, investors who stay invested for a fixed period of time are unlikely to suffer any capital loss.

Inflation Protection :
Mutual funds do not offer any kind of contractual or formal inflation protection. However, when you invest in well-chosen equity funds for a period of several years, your chances of beating inflation are better than any other type of investment.

Tips & Strategies :
Invest systematically and regularly in mutual funds through SIPs to make the most of long-term investing and the power of equity.
There are several strategies adopted by investors depending on their risk appetite, requirements and understanding of mutual funds.

Open an SIP a/c today. Contact us for further details.
Dhan's Mantra : Create Wealth, the Easy Way.

17/07/2015

Micro Cap Funds :
What are Micro Cap Companies?
Large : Top 100 companies
x > ~ Rs. 20,271 crores

Mid : Top 101-200 companies
~Rs. 20,271 crores > X > ~ Rs. 6,894 crores.

Small : Top 201-300 companies
~ Rs. 6,894 crores > X > Rs. 3,827 crores

Micro : 301st company onward
X < Rs. 3,824 crores

where 'X' is the market capitalisation

13/07/2015

Dhan's Knowledge Series - Savings & Investment :
Part 6 : RBI Savings Bonds

The RBI Savings Bonds or Government of India Bonds is an assured return scheme backed by the government, and is one of the safest instruments available to those seeking fixed and assured returns.
These bonds do not offer any tax benefits, are exempt from wealth tax and guarantee returns.

The main objective of investing in this bond is the guaranteed 8% returns on investment. The 6-year old tenure is used by many investors, especially retirees who have exhausted investments in the Senior Citizens Savings Scheme for the guaranteed returns that it offers.

Capital Protection :
The capital in this bond is completely protected as the scheme is backed by the Government of India, making it completely risk-free with guaranteed returns.

Inflation Protection :
This bond is not inflation protected, which means whenever inflation is above the current guaranteed interest rate of 8%; the deposit earns no real returns. However, when the inflation rate is below 8%, it does manage a positive real rate of return.

Liquidity :
The RBI bond is liquid, despite the 6-year stipulated lock-in. The liquidity is offered only in the form of loan and premature encashment is not allowed.
You can pledge the RBI bonds to obtain loans, the amount and rate at which the loan is permitted depends on the lending institutions.

Tax Implication :
There is no tax benefit on the investment or the interest paid out by this bond. The interest earned from this bond is added to the total income under the head ' Income from other sources' and taxed accordingly.

Tips & Strategies :
The assured return on the bond can be used to create an income ladder. Certificates can be bought every month or quarter for appropriate denominations, which on maturity will provide a steady income stream.

13/07/2015

Dhan's Knowledge Series - Savings & Investment :
Part 5 : Senior Citizen Saving Scheme :
Retirement brings with itself several complications and doubts but there are savings product that are safe and ensure guaranteed retirement income. The Senior Citizen Savings Scheme (SCSS) launched is 2004, is a deposit scheme introduced by the Government of India to provide guaranteed returns to senior citizens through a safe investment. This scheme ensures a regular income stream for senior citizens in retirement.

The main objective of the SCSS is to provide an assured 9.30% return paid every quarter to senior citizens which helps them create a guaranteed regular income flow.

Capital Protection :
The capital in the SCSS is completely protected as the scheme is backed by the Government of India, making it totally risk-free with guaranteed returns.

Inflation Protection :
The SCSS is not inflation protected, which means whenever inflation is above the current interest rate; the deposit earns no real returns. However, when the inflation rate is below the current interest rate, it does manage a positive real rate of return.

Liquidity :
The SCSS is liquid, despite the 5-year stipulated lock-in. The liquidity is offered in the form of withdrawals subject to conditions and penalties.

Tips & Strategies :
The guaranteed interest from the scheme can be used to create income streams to manage cash flows in retirement.
Extend the SCSS account on completion of 5 years by an additional three years.
Split the SCC account account into two individual accounts for self and spouse to reduce the impact of early closure of an account in case of emergencies.
It is wise to foreclose the account and invest in a bank savings account whenever banks offer higher interest rate on long-term deposits.

10/07/2015

Dhan's Knowledge Series - Savings & Investment :
Part 4 : Public Provident Fund :
The public provident fund (PPF) is a long-term savings instrument established by the Central Government, which offers tax concessions on savings as well as withdrawal after the lock-in period. This scheme came into force from July 1,1968 and is backed by the government with the objective of providing old-age income security to the self-employed and those working in the unorganized sector. Though the scheme is voluntary, the assured return and tax deduction on savings has fueled its popularity.

Investment objective and risks:
The primary objective of saving in the PPF account is to avail tax deduction on deposits, guaranteed returns on investment and tax free withdrawal on maturity.

Capital Protection:
The Capital in a PPF account is completely protected as the scheme is backed by the Government of India, making it fully risk-free with guaranteed returns.

Inflation Protection:
The PPF account is not inflation protected, which means whenever inflation is above the current guaranteed interest rate of 8.70%; the deposit earns no real returns. However, when the inflation rate is below 8.70%, it does manage a positive real rate of return.

Liquidity:
The PPF is liquid, despite the 15-year lock-in stipulated with this account. The liquidity is offered in the form of loans from the third year and withdrawals subject to conditions from the seventh year.
Savings in this product is completely risk free because of the government-backing.

Tips & Strategies:
Exhaust the full investment permissible to avail tax deduction on the first day of each financial year This will ensure that your yearly investment earns interest for the complete year and enjoys the compounding effect of interest in PPF and accumulates significant sums over the long-term.
Deposit the PPF contribution between the 1st and 5th of the month to earn interest for the whole month.

10/07/2015

Investing is the process of deploying your savings optimally with a view to growing your wealth over time. While it sounds simple on paper, in practice it turns out to be quite a stressful exercise due to various reasons. Well, here are a few pointers that could make your investing process more successful.

1) Invest with a plan and purpose:
Every paisa that your save and invest is to meet some financial commitment or aspiration in your life, right? If yes, then shouldn't every paisa be working towards meeting an identified and defined goal? Well, it is only when you know the finish line that you can win a race. So the very first step in your investment process should be to identify your financial goals as specifically and as practically as possible. You can then identify the right investment product that would suit your goal.

2) Start investing early:
Money matters usually fall at the bottom of the to-do list in your busy daily life. When everyday is a challenge in itself, thinking about the distant future seems a luxury. Whatever may be your circumstances, you need to start investing today, if you haven't already done so. Also, when you start investing early in life, you benefit from the 'power or compounding' (your investment income earns you more income over time). So take your first step now because every marathon has to begin with the first step. By starting early, you have more time over which you can achieve your financial goals.

3) Win the race against inflation:
If there is one hurdle to your financial life, it is inflation. This invisible evil keeps eating into the value of your hard-earned money and over a period of time, reduces its purchasing power. So, your investment program should aim to match inflation at least and better still, bear it if you desire to build your wealth for the future. Remember, investing is like climbing a greasy pole with inflation being the grease that continuously makes your climb difficult.

4) Take emotions out of your investments:
Your biggest enemy in your investment program could be your own emotions. It often pushes logic and reason to the background and this is where much of the investment benefits are lost. So once you have made a plan after putting a lot of thought and effort, stick to it with a lot of conviction without allowing your emotions to affect your decisions. Using systematic plans play a role here where you invest periodically irrespective of where the stock markets are headed in the short term.

5) Axe the tax:
Like inflation, tax has the potential to adversely affect your final investment performance. Eliminating or even postponing tax legally is quite possible by selecting the right investment product. Capital gains and some dividends enjoy tax-free/concessional taxation benefits and you may want to explore these while investing your savings to achieve your cherished financial goals.

6) Evaluate your progress:
Investing is not a one-time "do it-forget it" activity. It is in fact a life-long process. Every stage in life brings a different financial situation and needs. Then you have the external economic economic environment that is ever-changing to deal with. So your investment activity will need to be dynamic. You should review your plan and investments periodically to make the necessary adjustments and course corrections. Your financial advisor would help you put the pieces together in evaluation your progress towards your financial goal without burdening you with the pressure of doing it too often. So do discuss with your advisor periodically.

How you invest could determine 90% of your investment success and this simple guide would hopefully help you do things right!

Open an SIP A/c today. Contact us for further details.

Dhan's Mantra : Create Wealth, the Easy Way.

06/07/2015

Dhan's Knowledge Series - Savings & Investment :
Part 4 : Bank Recurring Deposits :

The prime objective of the recurring deposit is to earn better interest on savings compared to what an ordinary savings bank offers and instill discipline to save regularly.
Capital Protection :
The capital in a recurring deposit is not fully protected. Till recently, all bank deposits were insured under the Deposit Insurance and Credit Guarantee Scheme of India, which now has been made optional exposing the deposits to risks if the bank is not insuring deposits.

Inflation Protection :
The recurring deposit is not inflation protected, which means whenever inflation is above the deposit interest rate; the deposit earns no real returns. However, when the interest rate is higher than inflation rate, it does manage a positive real rate of return.

Guarantees :
The interest rate is fixed and guaranteed for the duration of the recurring deposit at the commencement of the deposit.

Liquidity :
The recurring deposit is liquid, even if the depositor defaults on a payment during the account's tenure. The liquidity is offered in the form on loans and withdrawals subject to conditions.

Tax implications :
There is no tax advantage on these deposits and the interest earned on maturity is treated as income from other source when computing income tax. Effective from June 1, 2015, TDS will be deducted on interest above Rs.10000 at 10%.

Tips & Strategies :
Check the interest rates offered by different banks for different tenures.
Some banks offer flexible or variable recurring deposits. In these flexible RDs, the person is allowed to deposit even higher amount of installments, with a fixed upper limit.
Before investing in a deposit it is important to consider the rate of interest and the inflation rate. A high inflation rate can eat into your real returns. So, it is vital to have a look at the inflation rate before arriving at the real rate of interest.

06/07/2015

Start saving to have time on your side

Youth can benefit from power of compounding by being disciplined and covering all risks.

In financial planning, more the time one has on his/her side, the better it is for the person to reach his/her financial goals. With time on your side, if you put in place a well thought-out financial plan and you are disciplined in your approach, it is highly likely that not only would you have less to worry about your finances after your retirement but also through your working years, say financial planners and advisors.

As a young, working person, there are some basic rules you need to follow. Here, we assume that since you are putting in place a good financial plan and you are willing to start early in your working life.

Beauty of compounding

Although the concept of compounding has been explained several times, it would be prudent to revisit the same once more. For example, let’s suppose that with 30-35 years on your side, you invest Rs. 5000 every month soon after you take up your first job. Also, let us suppose you invest a major chunk of the money in stocks or equity mutual funds, and over the same period your blended return (that is returns from equity mutual funds and other investments) from your portfolio is 15% per annum. At the end of 25 years, your total corpus would be a little over Rs. 1.62 crore.

However, if you had started five years later that is instead of 25 years you had invested for 20 years, at the same 15% yearly rate of return, your total corpus would be nearly 75 lacs.

So, you can start just five years earlier to more than double your corpus. This is the beauty of compounding, and every financial planner and advisor always advises a client to take advantage of this aspect of finance in one’s portfolio.

For this, one of the easiest ways is to go for a SIP in a mutual fund scheme.
And if you have long years ahead of you to meet your financial goals, an SIP in an equity mutual fund is one of the most advised investments in the market.

Open an SIP A/c today. Contact us for further details.

Dhan's Mantra : Create Wealth, the Easy Way.

03/07/2015

Think before you invest

The problem with the 21st century seems to be that of having too many options. Right from buying a mobile phone to buying a car to choosing an investment product, there are a number of options available today. What becomes crucial is how one decides which products to choose from, when to invest and for what time horizon? The fact is that there can never be one good product which suits everyone’s requirement. So it is indeed important to know what factors one needs to consider before making the right investment decision.

What is the purpose of my investment?
Dheeraj Gudal (name changed) had invested heavily in real estate. However, the investment did not have a purpose or goal attached to it. When his son decided to take up higher education, he had no money available to him in liquid form. Taking a loan was not possible for him. Moreover, the cost of education was around 20 lakh and Gudal had to sell his property worth Rs. 65 lakh for the same. What we tend to forget while investing is that every asset has its nature around which it behaves. Investing everything only in one asset class, especially one which lacks liquidity and divisibility, could turn out to be very risky proportion in the long run.

Where do I stand today?
During the process of financial planning, we often come across people telling us that they invested in a particular instrument, but are crucial as to what is happening with it. They are uncertain about their exact cash outflows and net worth as of today. It is very crucial for one t first understands where one stands financially vis-à-vis his milestones and then starts planning his future investments. Dhananjay Gupta (name changed) is a heavy credit card user and has an outstanding of Rs. 1.25 lakh on his credit card. The irony is that he is looking at investing in a good investment product for the long term not realizing that his out flow is around 36% per annum by way of interest on his card which his investment product might not fetch. So, it is first crucial to settle his outstanding loan, get hold of his cash flow and only then start investing.

Risk-return parity
It is very crucial to understand the returns our assets are generating against the risk involved. If there is a huge standard deviation in the portfolio and we are not ready for this kind of volatility, it would hamper our entire financial planning. So a risk-return parity depending upon the goals and financial situation should always be maintained.
Investing is a good discipline and would certainly help in building one’s financial future. However investing without taking adequate precautions could land us up in further problem.

Open an SIP A/c today. Contact us for further details.

Dhan's Mantra : Create Wealth, the Easy Way.

01/07/2015

Success Mantras of SIP :
1) Start Early :
Start early to allow your investments to grow.

2) Invest regularly :
To avoid the pinch of a lump sum investment, adopt a periodic regular investment approach to enjoy the benefits of compounding.

3) Identify the best asset class :
Over the years, equities have outperformed and has the highest average growth than any other asset class. Moreover, it's this asset class that has fared better even after accounting for the inflation.

4) Keep increasing your SIP amount as your income increases :
The best way to tackle future inflation and prepare for your future needs is by increasing your investment amount as per your increasing income level.

5) Invest the right amount :
Depending on your income duration and financial goal, you can arrive at a suitable SIP amount.

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Navi Mumbai
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