What does CRISIL , ICRA and CARE ratings mean for bonds and treasury ?

Corporate fixed deposits and bonds are mandatorily required to get rated by a credit rating agency before going for a public issue. Credit rating signifies how risky or safe it is for you to invest in that financial instrument. CRISIL, CARE and ICRA are examples of some well known credit rating agencies. Following are some symbols that CRISIL gives to corporate bonds:-

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The Monkey , Goat and Stock Story :)

So there was this village where one day a man appeared and said that he wanted to buy monkeys. He said that he would pay a hundred rupees per monkey. The villagers caught all the monkeys in the neighborhood and sold them to him for a hundred rupees each. Soon another man appeared and said that he would pay two hundred rupees for each monkey. But there weren't any more monkeys around. They were all owned by the first man. So the villagers went to him and said that they were willing to take the monkeys back and return his money. But the monkey owner was unwilling to sell. The villagers raised the offer price to Rs 150 per monkey, then Rs 175 and finally to Rs 199 but the man just didn't want to sell, even though he clearly didn't have any use for the monkeys. Eventually, just to see whether he would sell, they offered him Rs 200 but he still refused. The villagers were puzzled by this. Finally, one of them figured out that there must be someone else who was going to...

Why our Mutual Fund Portfolio needs restructure now ?

Why Mutual Fund portfolio now require restructure …. It is just because of below 3 reasons 1. Introduction of LTCG 2. Categorization of Mutual Fund by SEBI 3. Introduction of TRI (Total Return Index) Introduction of LTCG : That means frequent buy and sell of funds will put you in the trap of taxation and on a long run basis your return will reduce. Because each time you redeem you will pay tax and while reinvesting you need to pay upfront expense (applicable in both regular and in direct). Also we need to stop running behind those funds which are giving best return in recent times by churning your portfolio again and again may become fatal. So now your responsibility becomes more to choose right fund and stick to it for a lengthy duration. Categorization of Mutual Fund by SEBI : After new guideline from SEBI , a large cap should only consist of large cap (no mid and small cap) Similarly s...

Best Fixed Income Investments for less than 5 years

The difficulty in finding a suitable fixed income product has increased ever since key interest rates were lowered by the Reserve Bank of India. Except for high yield options available only to senior citizens and minor daughters, there are very few products offering nearly 8% return per annum. Ideally then, we decided to search and compile a list of various fixed income products offering high interest rate. We have considered the maximum investment term for the product as five years, and excluded products available only to specific age groups. Also, the deposit amount required for investment is less than 2 crores. Here are the options: Post office and Government Sponsored Schemes Most government schemes tend to be long term, of more than five years. The returns, too, are fixed and low for investing for such a long period. Among the few short-term options, the returns barely touched 8%. However, these deposits come with a sovereign guarantee, which makes them safe f...

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