Category: Personal Finance

CAGR Insights is a weekly newsletter full of insights from around the world of the web.

Chart Ki Baat

Gyaan Ki Baat 

Section 54F of Income Tax Act: Exemption on Capital Gains from Non-Residential Assets

The Income Tax Act 1961 allows you to sell your stocks and mutual fund holdings and not pay any tax on gains when you buy a new residential property.

Section 54F exempts long-term capital gains on the sale of non-residential assets (stocks, bonds, gold) if the proceeds are reinvested in a new residential property. The exemption applies to individuals and Hindu Undivided Families (HUFs) who meet certain conditions: the gain must come from non-residential assets, the entire sale proceeds must be reinvested, and the taxpayer cannot own more than one residential property at the time of sale. The new property must be purchased within one year before or two years after the sale or constructed within three years. Non-compliance disqualifies the exemption.

Personal Finance

• New Pension Guidelines: Updated Rules for Name and Birth Detail Changes: The Ministry of Defence has introduced a standardised process for updating names and birth details in Pension Payment Orders (PPOs) across the Army, Navy, and Air Force. The new guidelines simplify the correction procedure for retired personnel and dependents, requiring specific documentation and affidavits for amendments. Read here
  
  
• Navigating Volatility: Strategies for Mutual Fund Investors in Turbulent Markets”: As Indian markets remain volatile; experts advise mutual fund investors to exercise caution and avoid large investments. They recommend maintaining a long-term perspective, staying invested through SIPs, and diversifying portfolios across sectors and asset classes. Adjustments should align with individual financial goals, risk tolerance, and market conditions. Read here
  
  
• Essential Guide to Indian Income Tax Rules for NRIs: NRIs should understand India’s tax rules to optimize financial planning. Tax-efficient options include NRE accounts (tax-free interest) and NRO accounts (subject to TDS). Investments like mutual funds, real estate, and bonds have specific tax implications. NRI investors should also consider the Double Taxation Avoidance Agreement and seek professional advice. Read here

Investing

• Understanding Investment Bubbles and Valuations: The author discusses investment bubbles, marked by irrational exuberance and inflated valuations, often fuelled by new technologies or trends. He reflects on past bubbles, such as “The tech Bubble and the housing bubble”, and emphasizes the importance of valuing companies based on earnings and sustainability, rather than speculation on future growth. Read here
  
  
• Bond Yields Fall 6 Bps to 6.75% Following RBI’s Daily VRR Auction Assurance: Bond yields on the 10-year government bond dropped 6 bps to 6.75% after the RBI assured daily VRR auctions to ease liquidity tightness. The RBI’s first auction received Rs 30,760 crore in bids, with primary dealers participating. The government also repurchased Rs 9,892 crore of bonds to strengthen its fiscal position. Read here
  
  
• Gold Reaches 1-Month High on Fed Rate-Cut Speculation: Gold prices hit a one-month high after U.S. core inflation data showed a smaller-than-expected rise in December, fueling hopes for Fed rate cuts. Treasury yields and the dollar weakened, while expectations for a rate cut in June increased. Geopolitical developments included a ceasefire deal between Hamas and Israel. Read here

Economy & Sectors

• Insurance Industry Urges Tax Incentives and Insurance Act Amendments in Budget: The insurance industry is seeking amendments to the Insurance Act in the upcoming Union Budget, including higher FDI limits, changes to capital requirements, and opening the agency channel. Additionally, they demand tax exemptions for health, life, and accident insurance policies under the new tax regime to boost affordability and growth. Read here
  
  
• Understanding the Structural Drivers Behind the Rupee’s Decline: The Indian rupee’s decline is driven by structural and cyclical factors, including global dollar strength and domestic economic challenges. RBI’s currency interventions have led to liquidity tightness, while growth projections have been downgraded. To ease pressure, RBI must allow greater rupee depreciation, despite limited policy options in the current landscape. Read here
  
  
• The Growth Paradox: Why High-Growth Sectors May Not Deliver High Returns: High-growth sectors can attract intense competition, leading to price cuts and diminished profits. Investors face challenges identifying long-term winners and may experience overvaluation and speculative bubbles. Capital-intensive industries risk overcapacity, resulting in value destruction. Successful investing requires focusing on companies with strong moats, disciplined valuations, and realistic growth expectations. Read here

Check out CAGRwealth smallcase portfolios

Our smallcase portfolios are ranking well in the smallcase universe in terms of 1-year returns.

• CFF (launched in June 2022) – Ranked 3^rd amongst smallcase with medium volatility.

• CVM (launched in May 2022) – Ranked among Top 20 across the Momentum smallcase universe.

Do check it out here

****
That’s it from our side. Have a great weekend ahead!

If you have any feedback that you would like to share, simply reply to this email.

The content of this newsletter is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information outlined in this newsletter unless mentioned explicitly. The writer may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated in this newsletter.

CAGR Insights is a weekly newsletter full of insights from around the world of the web.

Chart Ki Baat

Gyaan Ki Baat 

Navigating Drawdowns in the Current Indian Market

As we step into 2025, many investors in India are grappling with drawdowns in their portfolios. A drawdown refers to the decline in an investment’s value from its peak, and it serves as a crucial indicator of risk. Currently, the Indian stock market is experiencing volatility, with the BSE Sensex down approximately 12% from its September 2024 peak. Factors such as high valuations, slowing growth, and significant foreign institutional investor (FII) selling—amounting to around ₹1.15 trillion—have contributed to this downturn.

This environment underscores the importance of understanding drawdowns and their implications for investor sentiment. For those facing portfolio drawdowns, it’s vital to reassess risk and maintain a balanced approach. Keeping cash reserves can provide opportunities to buy during market corrections, which often yield better long-term returns. As history shows, markets tend to recover from downturns, rewarding disciplined investors. In conclusion, while drawdowns can be challenging, they also offer valuable lessons and opportunities. By staying informed and strategic, investors can navigate these turbulent times and position themselves for future growth. Remember, patience and a well-thought-out strategy are key to overcoming market fluctuations.

Personal Finance

• Investing in your 40s, 50s and Retirement Planning: Are you in your 40s and 50s and wondering how to invest wisely for a secure retirement? 💼💰 Shruti and Vikas break down the essentials of retirement planning in the latest episode of Finance Ke Funde!Watch here

• India Post Launches Aadhaar-Based Digital KYC for Savings Accounts: India Post has implemented Aadhaar-based authentication for Post Office Savings Accounts (POSA) operations, introducing a paperless Know Your Customer (KYC) process that became operational on January 6, 2025. Leverage this convenient, government-backed system to diversify your savings while benefiting from financial inclusion initiatives. Read here

• EPFO set to introduce self-attestation facility for completing KYC: In a major relief for its 80 million active members, the Employees Provident Fund Organisation (EPFO) is set to introduce a self-attestation facility starting in June that will do away with the need for approval from employers to complete the Know Your Customer (KYC) process. Read here

Investing

• Sebi issues new guidelines for research analysts, investment advisers: SEBI has issued updated guidelines for research analysts (RAs) and investment advisers (IAs), introducing deposit requirements, AI disclosure mandates, client segregation rules, compliance audits, dual registration protocols, and transparency measures to strengthen regulatory oversight and ensure investor protection. Read here
  
  
• SIPs surpass fixed deposits, equities as India’s preferred investment choice: Mutual funds In India are gaining popularity as inflation and rising interest rates reduce returns on traditional investments like FDs and RDs. Improved financial literacy, digital access, and SIP flexibility have fueled this shift, with mutual fund participation rising to 62% in 2024, up from 54% in 2023. Read here
  
  
• Bond Market Outlook 2025: What retail investors need to know: India’s bond market is set for some changes in 2025. A mix of stable macroeconomic factors, shifting investor trends, and global influences will define the landscape. Read here

Economy & Sectors

• Indian Micro Finance sector grows by over 2,100% in 12 years: The Micro Finance Institutions (MFI) industry has grown over 2176%, from Rs. 17,264 crores in 2012 to Rs. 3.93 lakh crore in 2024. Operating in 723 districts, including 111 aspirational ones, MFIs serve 8 crore borrowers, contributing 2.03% to GDP. Challenges include raising low-cost long-term funds and governance improvements. Read here

• India’s economy likely to grow 6.6% in 2025, 6.7% in 2026: UN report: Keeping its 2025 growth forecast unchanged from its mid-2024 estimates, the UN report said, “In India, the public sector continues to play a pivotal role in funding large-scale infrastructure projects, physical and digital connectivity, and social infrastructure, including improvements in sanitation and water supply. Strong investment growth is expected to continue through 2025.”Read here

• How Budget 2025 can propel India’s economic growth to 7%: The Modi government’s first full budget in its third term will need strong policy support to boost demand and achieve 7% economic growth in FY26, up from an expected 6.3% in FY25. Measures to enhance revenue expenditure, income tax policies, and demand-side policies are essential to address challenges and drive growth.Read here

Check out CAGRwealth smallcase portfolios

Our smallcase portfolios are ranking well in the smallcase universe in terms of 1-year returns.

• CFF (launched in June 2022) – Ranked 1^st amongst smallcase with medium volatility.

• CVM (launched in May 2022) – Ranked among Top 20 across the Momentum smallcase universe.

Do check it out here

****
That’s it from our side. Have a great weekend ahead!

If you have any feedback that you would like to share, simply reply to this email.

The content of this newsletter is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information outlined in this newsletter unless mentioned explicitly. The writer may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated in this newsletter.

Open the newsletter in the browser here

CAGR Insights is a weekly newsletter full of insights from around the world of the web.

Chart Ki Baat

RBI’s Consumer Confidence Survey

Gyaan Ki Baat 

Understanding Fed’s Dot Plot

The dot plot is an essential tool used by the Federal Reserve to communicate its outlook on future interest rates. Here’s what you need to know:

What is the Dot Plot?

• Definition: The dot plot is a graphical representation of the Federal Open Market Committee (FOMC) members’ projections for the federal funds rate over the next few years and in the longer term.
• Visualization: Each dot represents an individual member’s forecast, providing a visual summary of their expectations.

Importance of the Dot Plot

• Quarterly Updates: The dot plot is updated four times a year, reflecting real-time assessments of economic conditions.
• Market Insight: Investors and analysts closely monitor the dot plot as it serves as a forward guidance tool, influencing market expectations regarding monetary policy.

Recent Trends

In the latest update, the median projection indicated only two interest rate cuts by 2025, suggesting a more cautious approach compared to previous forecasts.

This shift highlights how economic factors, such as inflation and labor market conditions, impact Fed decisions.

Personal Finance

• Budget 2025: Govt may cut income tax rates to lift consumption, says report: India’s budget buzz is building, and a potential income tax cut is on the horizon! With the economy slowing and the middle class feeling the pinch, there’s talk of giving taxpayers a little extra relief. Read here
  
  
• Confused as how GST hike on used car will work? Here’s how a higher GST of 18% will impact individuals and businesses: The GST Council’s latest move: an 18% tax on used car sales for specific vehicles, including EVs and larger engines! While most businesses can’t claim input tax credit, car showrooms and transporters get a pass. To learn who’s paying and how. Read here
  
  
• Why your credit score is not improving despite timely bill payments: A stagnant credit score despite timely bill payments can be due to high credit utilization, inaccuracies in credit reports, limited credit mix, too many credit applications, or past negative records. To improve the score, manage credit usage, maintain timely payments, and monitor credit reports for errors. Read here

Investing

• What valuations of Indian banks are indicating? Indian private banks are turning heads! Despite recent underperformance, they’re trading at compelling valuations with strong fundamentals backing them. With profitability at decade highs and exciting growth potential, is this the moment for private banks to reclaim their spotlight? The story is just getting started Read here
  

• A Litany of “I Told You So”: The 2020–2024 Indian market flipped the investing playbook, smashing old rules as sky-high valuations defied correction calls. Everyone’s yelling “I told you so,” but timing was a wild card. The real lesson? Read here
  
  
• Why is one Nasdaq FOF earning 60 per cent more than the other? Imagine this: two Nasdaq-100 mutual funds in your portfolio, both tracking the same index, both aiming for identical goals. Yet, their one-year returns couldn’t be more different—35% versus 56%! What’s happening behind the scenes? A fascinating interplay of demand, regulations, and pricing quirks is rewriting the script. Curious? Read here

Economy & Sectors

• India power equipment sector – Recouping the lost decade: India’s power sector is charging ahead! With rising demand from manufacturing, renewable energy, and data centres, investments are set to skyrocket. By FY32, capacity will double, unlocking huge opportunities for power equipment manufacturers. Read here

• India Sees Economic Growth at 6.5% for the Year Through March: India’s economy is forecast to grow at 6.5% in FY 2024-25, down from 8.2% last year. Slower growth, global trade risks, and currency weakness impact the outlook, with economists expecting a possible RBI rate cut in February. Read here

• Weak rupee to jack up key import bills: The weakening of the Indian rupee could increase the import bill by $15 billion, with significant impacts on commodities like edible oils, pulses, and fertilizers. Electronics, particularly smartphones, may become costlier, while the impact on energy imports is offset by falling oil prices. Read here

Check out CAGRwealth smallcase portfolios

Our smallcase portfolios are ranking well in the smallcase universe in terms of 1-year returns.

• CFF (launched in June 2022) – Ranked 1^st amongst smallcase with medium volatility.

• CVM (launched in May 2022) – Ranked among Top 20 across the Momentum smallcase universe.

Do check it out here

****
That’s it from our side. Have a great weekend ahead!

If you have any feedback that you would like to share, simply reply to this email.

The content of this newsletter is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information outlined in this newsletter unless mentioned explicitly. The writer may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated in this newsletter.

CAGR Insights is a weekly newsletter full of insights from around the world of the web.

Chart Ki Baat

(Source: Accel, Bessemer, Blume, Fireside, Lumikai)

Gyaan Ki Baat 

Fed Rate Cut: A Hawkish Move

The recent decision by the Federal Reserve (Fed) to cut interest rates by 0.25 percentage points is a pivotal development in U.S. monetary policy. This reduction, which marks the third consecutive cut in 2024, brings the federal funds rate to a range of 4.25% to 4.5%. The Fed’s objective with this move is to manage inflation while fostering economic growth.

Why Did the Fed Cut Rates?

• Stimulating Economic Activity: Lower interest rates reduce borrowing costs for consumers and businesses, encouraging spending and investment. This can lead to increased economic activity, which is crucial for job creation and overall economic health.
• Inflation Concerns: Despite the rate cuts, inflation remains a significant concern. As of November 2024, inflation was reported at 2.7%, above the Fed’s target of 2%. The central bank aims to strike a balance between supporting growth and keeping inflation in check.

Global Considerations:

The Fed’s monetary policy has ripple effects beyond U.S. borders. Emerging markets, including India, are particularly sensitive to changes in U.S. interest rates, as they can influence capital flows and exchange rates

Personal Finance

• Learning from Mistakes: Mistakes are vital for growth, teaching valuable lessons through reflection and iteration. Separating ego from errors fosters objectivity, enabling improvement in investing and creativity. Embrace mistakes as opportunities to refine processes, enhance decision-making, and discover transformative insights. Read here
  
  
• Do As I Say, Not as I Did: The best investment lessons often hide in plain sight, but are we really looking in the right places? Success leaves clues—but not always in the advice given. This article uncovers what truly matters. Read here
  
  
• EPFO gives employers till Jan 31 to submit pending forms for higher pension: The EPFO has extended the deadline for employers to process pending higher pension applications until January 31, 2025. Employers must submit replies by January 15 for 466,000 cases requiring clarification. The extension addresses a significant backlog in pension claims. Read here

Investing

• Three Things I Think I Think – Strategic Reserves and Stuff: Forget Bitcoin, the US government should invest in American innovation! Cullen Roche slams the proposed Bitcoin reserve as a “scam,” while marvelling at US market dominance that’s spooking even him. Meanwhile, while partisan politics rage, the silent majority (Independent voters) remain surprisingly level-headed about the economy. Read here
  
  
• The 3 Best Inflation Hedges: Inflation may feel like a silent thief, but with the right strategies—like growing your income, locking in housing costs, and investing wisely—you can turn the tables and come out ahead. Read here
  
  
• Sebi Board Decides to Tighten SME IPO Norms, Revise Investment Banking Rules, Expand UPSI Definition: Sebi approved measures including stricter SME IPO norms, revised investment banking regulations, and expanded UPSI definition. It introduced reforms for Debenture Trustees, ESG rating providers, and financial entities, along with mandatory electronic payments for demat accounts and AI compliance safeguards. Read here

Economy & Sectors

• Will India’s economic growth pick up pace? Nirmala Sitharaman answers: Finance Minister Nirmala Sitharaman acknowledged that July to September was a challenging period for the economy but called the slowdown a ‘temporary blip’. Read here
  
  
• Indian economy to grow 6.6 pc in FY26: Ind-Ra: India Ratings projects 6.6% GDP growth for FY26, up from 6.4% in FY25. Investments will drive growth, reversing the cyclical slowdown. Despite easing monetary conditions, fiscal and external tightening are expected to persist, impacting the economy. Read here
  
  
• In 2025, the hurdles to India’s growth: India may overtake Japan as the fourth-largest economy by 2025, but risks include lower growth and fiscal contraction. The private sector’s investment role is uncertain, while global volatility, inflation, and protectionist trade policies challenge economic stability. Read here
  
  

Check out CAGRwealth smallcase portfolios

Our smallcase portfolios are ranking well in the smallcase universe in terms of 1-year returns.

• CFF (launched in June 2022) – Ranked 1^st amongst smallcase with medium volatility.

• CVM (launched in May 2022) – Ranked among Top 20 across the Momentum smallcase universe.

Do check it out here

****
That’s it from our side. Have a great weekend ahead!

If you have any feedback that you would like to share, simply reply to this email.

The content of this newsletter is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information outlined in this newsletter unless mentioned explicitly. The writer may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated in this newsletter.