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 

November Inflation Eases to 5.48%

In November 2024, India’s retail inflation showed a significant decline, easing to 5.48% from 6.21% in October. This decrease brings inflation within the Reserve Bank of India’s (RBI) target range of 2-6%, which is a crucial indicator for monetary policy decisions, particularly regarding interest rates.

Key Highlights of November Inflation:

CPI Trends: The Consumer Price Index (CPI) inflation fell primarily due to a reduction in food prices, which had surged in previous months. The year-on-year inflation rate for food was recorded at 9.04%, with notable declines in the prices of vegetables, pulses, and other essential commodities.

Urban vs. Rural Inflation: Urban areas experienced a lower inflation rate of 4.83%, while rural inflation was higher at 5.95%. This disparity highlights the ongoing challenges in rural economies, where food prices remain a significant concern

Personal Finance

• Transparency in Insurance: Why Honest Declarations and Partner Involvement Matter: Insurers share key consumer details, making honesty crucial in insurance declarations. Radha’s case revealed her late husband’s non-disclosure of health issues, leading to claim rejection. Read here
  
  
• Bank account, bank locker rule change: Lok Sabha passes new Banking Amendment Bill, allowing up to 4 nominees in savings, locker accounts: The Lok Sabha has passed the Banking Laws (Amendment) Bill, 2024, allowing up to four nominees for bank accounts, deposits, and lockers. This change simplifies fund distribution and ensures smoother access for nominees after the account holder’s death. Read here

• New SIP rule: SEBI mandates MF companies to process cancellations in 2 days: SEBI has reduced SIP cancellation processing to two working days from ten, effective December 1, 2024. The reform ensures uniform timelines, faster control, transparency, and operational efficiency, enhancing investor convenience and trust in the mutual fund ecosystem. Read here

Investing

• FPI participation in Indian equity-derivative markets rising: SMC Global: Foreign Portfolio Investors (FPIs) are returning to Indian markets, attracted by steady economic growth and opportunities in equities and derivatives. SMC Global reports rising FPI participation, complemented by expanding domestic trading from tier-3 and tier-4 cities via mobile apps. Read here

• Investing in 2025: Headwinds and tailwinds: After tripling since 2020 lows, markets face uncertainty in 2025 amid global economic risks, Trump’s unpredictable policies, and high valuations. US tariff threats, rising dollar strength, and cautious investors challenge emerging markets, including India. Read here

• Gold Price Outlook 2025: Key Trends Shaping the Future of Gold: Gold has surged 28% in 2024, driven by central bank buying, geopolitical risks, and market volatility. Modest 2025 growth is expected, with potential upside from central bank demand and risks from monetary policy shifts and China’s economic dynamics. Read here

Economy & Sectors

• India needs USD 2.2 trillion investment on infra to become a 7$ trillion economy before 2030: Real estate consultant Knight Frank India released a report, ‘India Infrastructure: Reviving Private Investments’, which mentioned that “ an estimated investment of USD 2.2 trillion into infrastructure development is imperative to support India’s GDP size to expand to USD 7 trillion by 2030.” Read here

• 69% growth in rural female employment during 2018-23, says government report: India’s female labour force participation (LFPR) rose significantly, driven by government schemes like Mudra loans and SHGs. Rural LFPR surged (~69%), with interstate variations, while urban gains were modest. Marital status, age, and childcare significantly influenced LFPR trends. Read here
  
  
• India In 2030: $7 Trillion Economy Dream Needs $2.2 Trillion Investment In Infrastructure, Says Report: India needs $2.2 trillion infrastructure investment to reach a $7 trillion economy by 2030. Private sector participation has dropped significantly, stressing government finances. Addressing delays, financing issues, and revenue risks can revive private investments and ensure sustainable 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

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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 

As we are close to wrapping up 2024, the Indian financial scene is vibrant and dynamic, offering both challenges and opportunities for investors. Here’s what you need to know to make informed decisions:

1. Gold: The Shining Asset

Gold has always been a safe haven, and recent trends reinforce this. The Reserve Bank of India (RBI) has purchased 78 tonnes of gold this year, bringing total reserves to 882 tonnes—the highest share since 1999. With gold imports skyrocketing to $7.13 billion in October alone, driven by festive demand, now might be a great time to consider adding gold or gold-related investments to your portfolio. Gold ETFs are also seeing record inflows, with INR 19.6 billion invested in October.

2. Foreign Investment Trends

Despite recent volatility, foreign direct investment (FDI) in India surged by 23.3% in 2023-24, with the U.S. leading the charge. This indicates strong international confidence in India’s growth story. As an investor, look for sectors attracting FDI, such as technology and renewable energy, which are poised for significant growth.

3. Infrastructure Opportunities

The Finance Minister’s call for faster capital investment rollout is crucial, with only ₹50,069 crore approved out of an allocated ₹1.5 lakh crore for infrastructure projects this fiscal year. This presents a golden opportunity for investors in construction and related sectors as the government seeks to boost economic activity.

4. Interest Rates and Inflation

With inflation concerns still on the radar, keep an eye on the Reserve Bank of India’s monetary policy decisions. Changes in interest rates can significantly impact your investment returns and borrowing costs.

Personal Finance

• Cabinet approves PAN 2.0: Will you have to apply for a new one? PAN 2.0 is here. Transforming taxation with faster processing, seamless data integration, eco-friendly paperless systems, and enhanced security—bringing a smarter, more efficient way to manage your financial identity. Read here

• India may soon announce EPFO 3.0 plan; subscribers likely to get option to withdraw PF via ATMs: The government plans EPFO 3.0, offering features like lifting the 12% contribution cap, ATM withdrawals by 2025, and higher pension contributions. The goal is greater flexibility and improved retirement benefits for subscribers. Read here

Investing

• Market Turmoil: Can Domestic Flows Counter $55B Equity Surge and FII Exodus? Will India’s surging $55B equity supply outpace record SIP inflows and FII exits? Learn what’s driving market volatility and where the next big opportunities lie! Read here

• Here’s how Warren Buffett says he’d start investing today: Warren Buffett suggests looking for hidden opportunities in smaller, overlooked companies, where significant value might be lurking. In these under-the-radar stocks, there’s potential for surprising returns, though success requires deep knowledge and a bit of risk. Read here

• Why Indian equities are thriving while global markets are grappling with declines: Amid global economic uncertainty, India’s equity markets remain resilient, driven by strong domestic institutional investments and improving sentiment. While global markets face declines, India’s stability, attractive valuations, and growth prospects make it an appealing investment opportunity. Read here

Economy & Sectors

• India’s gig economy could add 90 mn jobs enabled by large multinationals: The gig economy in India is projected to grow to $455 billion by 2024, contributing 1.25% to GDP and creating 90 million jobs. It supports sectors like e-commerce and delivery, with efforts to improve worker conditions and promote inclusive growth. Read here

• Indian economy to bounce back for 3 big factors: Here’s what Morgan Stanley forecasts: India’s economy is expected to recover, with GDP growth forecasted to reach 6.7% in Q4 FY25. Government spending, food inflation moderation, and a recovering job market are key drivers, while Q3 slowdown was attributed to reduced government spending. Read here

• India’s Defence Sector Presents Long Runway of Growth: India’s defence sector is poised for substantial and sustained growth, driven by increasing capital expenditure, according to global investment banking firm JP Morgan. Key factors underpinning this growth include rapidly expanding defence exports, a significant emphasis on domestic manufacturing, high returns on capital employed (RoCE), and robust cash flows. 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.

Ever since the beginning of the COVID-19 outbreak, there’s been a gush of information about preventative measures one must adhere to, to remain safe. They are all simple and effective ways to keep the virus at bay. Something even children can follow with ease. One of the important do’s on that list being, building the immune system to stay strong. One’s immunity indeed plays a vital role here as that is what helps to keep the body’s natural defences up and fight any viruses, bacteria and parasites daily without severe complications. However, when we fail to properly take control of our systems, these natural defences weaken over time. The same analogy can be applied to our financial planning. Let us see how.

Very often these days, we come across this phrase, “We are all in this together.”. Yes, we most definitely are. The pandemic is very much an emergency, a critical one at that which the whole world is facing. It came unannounced. Nobody ever imagined what a blow this would be and nobody still knows how long it’s going to last or how much more damage it’s going to cause. Phew! We have our fingers crossed and hope no more. But the one thing that stands out is that while we are in this together, we are not in the same boat. Each one of us is in a different boat flowing through the same turbulent river. Some of us have lost our jobs, some of us are operating under pay cuts, some of us have lost loved ones and some others still have everything intact but are living fearfully every passing day. We’ve somehow adapted to all the new ways forced upon us by nature since the last six months.

As much as we’d like to have everything back in our control much sooner than one can imagine, there are still a whole lot of questions yet to be answered. However, there are some which need to be brought to the fore and spoken about just as openly as the other preventative measures. Building financial immunity is just that and equally important as maintaining physical immunity. Having an emergency fund is a marker of that among many other things. As we find ways to navigate through this crisis, the question on almost everyone’s mind has been how to ensure financial security for their family. There are two important approaches to think of – short term and long term. Short term would  involve your day-to-day affairs and long term would apply to investments made for different goals still  many years away.

Short term

• Re-assess your budget If anything, the pandemic has made us all realize that we don’t need much to live a happy life. We can actually live well on the very basic and re-evaluate our needs vs. our wants. With restrictions on outings and travelling, we can re-jig our monthly budgets to allot a sufficient amount to necessities, be very mindful with our spending and ensure we save for a rainy day.

• Don’t ignore your emergency The first point about saving for a rainy day brings us to continue working on that emergency fund. Now, more than ever given that the emergency has actually struck or may be looming around in one form or the other. You’re probably making use of it depending on your current situation. But if not, it’s important to keep maintaining it for any unforeseen circumstances.

• Be practical about your helper It’s hard enough to work from home that we also have to take care of the cooking and cleaning of our house. Not having our regular helpers for extended periods of time isn’t easy on anyone. Whether to start letting them in or wait till things get better, is another confusing question. Paying them their salaries on time without actually having the services rendered is also not a feasible option for many in these times. But if it does come to that, paying them at least half their salaries (if not full), can be a temporary solution instead of letting them go completely. And if that too doesn’t seem like an option, at least pay them a small token amount to keep them afloat for a short period of time.

• Beware of coronavirus scams Cyber crimes under the name of coronavirus are a threat in these times. Even if you decide to donate or invest somewhere with good intentions, ensure that the source is credible. Do your research, ask around, don’t transfer any money through unknown links directing you to enter your bank account/credit card details without having checked if the money is going to an authentic party.

Long term

• Staying invested As far as possible, it’s best not to disturb any investments intended for the long term to accomplish bigger financial goals. The market is volatile and you may not be comfortable looking at prices of stocks crashing. But withdrawing your money now because of this fear might turn out to be an impulsive decision especially if you try to buy back when the market recovers. The prices are prone to be higher then. Seeking advice from your financial planning adviser is highly recommended if staying invested is not an option for you.

• Re-balancing your portfolio If at all the first point isn’t viable for you, it would be beneficial to consider re-balancing your portfolio before you make any drastic decisions. Again, consulting your financial planning adviser could give you a clearer perspective and help you plan better. The role of diversification or asset allocation can’t be emphasized upon more than in the current times. Hence, it’s best to ensure that re-balancing involves a good mix of various investments.

• Insurance is a must Life and health insurance should both be non-negotiable. After all, health and finances are tied in so closely. It would be unwise to not have these insurance policies in place. In fact, getting a critical illness insurance policy would provide a bigger safety net by staying one step ahead, in case of any unforeseen circumstances.

• Pay attention to your retirement account In the midst of everything that you’re trying to set right in these times, it’s possible that you might ignore your retirement account. Ensure that you don’t do that. It’s also important that you do your best to not disturb that either if cash flow is an issue currently. A retirement account should not be mistaken for an emergency fund. Therefore, do you best to not quit it or exhaust it either.

The last several months have been testing times for each one of us. With the new normal, multitasking is redefined and anxiety levels have been at their peak. But we’ve got to remember that there are a few things that are still under our control. Taking good care of ourselves and being responsible citizens is of course, the most important one. And being cautious with our finances, understanding the do’s and dont’s about money management in these unprecedented times is even more crucial to tide through this pandemic. Safety, to a large extent today lends itself to being financially immune too. A positive mindset is another one not to be forgotten in this list. Whatever boat we might be sailing in, we will get through this together.

Stay safe!