Category: Tax Planning

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

Chart Ki Baat

Gyaan Ki Baat 

Recently, the Indian stock market has experienced a significant correction, with major indices seeing declines of over 10% from their peaks. This shift has raised concerns among investors, especially after a strong bull run in the past few years. While it may seem alarming, market corrections are a natural part of the investing cycle and offer important lessons for investors.

Why Market Corrections Happen:

Overvaluation: Stocks or entire sectors sometimes become overvalued due to excessive optimism, and when the market corrects, it brings the valuations back to more sustainable levels.

Economic Factors: Changes in the global or domestic economic environment—such as inflation concerns, rising interest rates, or geopolitical tensions—can trigger corrections.

Investor Sentiment: A shift in investor sentiment, driven by fear or uncertainty, often leads to increased selling pressure, resulting in market declines.

The ongoing market correction in India, fueled by external economic factors and shifting investor sentiment, is a natural part of market cycles. While it might be unsettling, it is important to view it as an opportunity to reflect on your financial goals, review your investments, and stay focused on the long-term horizon. In the face of volatility, maintaining discipline and patience can help investors navigate corrections successfully and capitalize on opportunities that may arise.

Personal Finance

• My $507.34 Ridiculous Mistake! A five-year mistake, silent price hikes, and hundreds lost on a service never used—could you be missing the same hidden cost? Read here
  
  
• What NRIs need to know about investing via mutual funds in India: The NPCI now allows NRIs with NRE or NRO accounts to make UPI transactions linked to international mobile numbers. Available in countries like the US, UK, UAE, and Australia, the service enables NRIs to send money to family in India or make payments without traditional wire transfers, fee-free.Read here
  
  
• How to make NPS contributions via the BHIM app: NPCI BHIM Services has just made retirement planning a whole lot easier. Now, you can directly contribute to your National Pension System (NPS) account right from the comfort of your smartphone. To know how to load the money through BHIM appRead here

Investing

• Indian stock market: 8 key things that changed for market overnight – Gift Nifty, US inflation, to surging dollar: Sensex and Nifty 50 are set for a cautious start amid global market fluctuations and a strong US dollar. With US inflation spurring Fed rate cut, and relentless FII selling weighing on Indian stocks, the markets brace for continued volatility as key economic factors plays out. Read here
  
  
• A New Dawn: Navigating Market Uncertainty and Seizing Opportunities: With inflation fears looming large and market volatility persisting, are investors taking the right steps to protect their portfolios? As interest rates rise, how will the bond market fare? Can the stock market weather the storm, especially in the tech sector? What strategies can investors employ to navigate these turbulent times? Watch here
  
  
• Index Funds are the go-to choice for India’s young investors, shows survey: A recent survey reveals that index funds are highly favoured among Millennials and Gen Z, with nearly half of investors under 43 choosing them, compared to just 35% of Gen X and Boomers. Passive investing, particularly in sectoral indices, has seen rapid growth, pushing Assets Under Management to over Rs 11 trillion. Read here
  
  
• RBI announces rules to reclassify FPI investment as FDI once it crosses 10% holding in Indian firms: RBI has streamlined the process for FPIs to reclassify their holdings as FDI if their stake in an Indian company exceeds 10 percent. Previously, FPIs exceeding this cap were required to either divest the surplus shares or reclassify them as FDI. To know more about the framework. Read here

Economy & Sectors

• Indian banks to have steady growth in earning over next 3-4 years, fees from unsecured lending may dip, notes Jefferies report: Indian banks anticipate steady growth in loans and earnings, though risks in unsecured lending and uncertain rate cuts could affect margins. Will they thrive or falter? The next few months will reveal whether they can outpace the broader market’s momentum. Read here
  
  
• Global Macro and Investment Implications of President Trump Win: Rees Chan outlines U.S. reindustrialization under Trump, emphasizing domestic growth, defense spending, and a lower dollar. He anticipates significant opportunities for India, particularly in manufacturing and defense, while U.S. tech giants may face heightened regulatory pressure and challenges.Watch here
  
  
• India’s middle class tightens its belt, squeezed by food inflation: India’s urban spending is slowing, with middle-class budgets squeezed by persistent inflation. While top earners continue to spend, the middle segment shrinks, affecting major consumer goods firms. This shift raises questions about the long-term stability of India’s economic growth. Read here
  
  

Check out CAGRwealth smallcase portfolios

Both 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

Source: Bloomberg

Gyaan Ki Baat 

Mind Over Money: How Behavioural Biases Shape Your Investments

Investing is not just about numbers and market trends—it’s also deeply influenced by psychology. Our emotions and inherent biases often shape the financial decisions we make. Understanding these behavioural biases can help investors make more informed, rational choices and avoid common pitfalls in their investment journey.

Here are some common behavioural biases that can impact financial behaviour:

Overconfidence: Investors often overestimate their abilities and knowledge, leading to riskier investments.

Loss aversion: People tend to feel more pain from a loss than pleasure from a gain, making them reluctant to sell losing investments.

Herding: Investors often follow the crowd, buying or selling assets based on popular trends rather than fundamental analysis.

Anchoring: Investors may anchor their decisions to irrelevant information, such as the initial purchase price of a stock.

Confirmation bias: Investors seek information confirming their beliefs while ignoring contradictory evidence.

Understanding these biases can help investors make more informed decisions and avoid costly mistakes. By recognizing and mitigating the effects of these biases, individuals can improve their financial outcomes. Here’s the list of curated readings for you this week:

Personal Finance

• Are you investing in Gold this Dhanteras? Finance Ke Funde is here! 💰✨Join Shruti and Vikash in our first episode as they explore the world of gold. We’ll talk about everything from its cultural significance to its investment prospects. Discover why gold prices fluctuate worldwide, how they compare to Indian markets, and much more! Watch here

• The Low Stability of High Income: Is your high salary a ticking time bomb? High-income earners, especially in volatile industries face the risk of sudden income loss. Discover how unchecked spending and job volatility could quickly derail your financial future—and what you can do to stay secure. Read here

• Soaring Markets Trigger Family Disputes: Family disputes in India’s business empires are escalating as market valuations soar. From the Oberoi family to the Kalyanis, legal battles are intensifying over competing wills. With family businesses contributing 75% of GDP, how will these conflicts shape the future? Read here

Investing

• The Run: Archie Karas went from rags to riches, turning $50 into $40 million, only to lose it all. His story mirrors the risky nature of stock picking, where discipline, conviction, and smart risk-taking are crucial to long-term success. Read here

• Measuring Performance – How to Choose the Right Benchmark: Benchmarking in investing shouldn’t focus on niche indices that may distort performance comparisons. True progress lies in absolute returns against major indices like the S&P 500, reflecting real investment alternatives. Choosing the right benchmark is crucial for long-term success. Read here

• How a Pune investor’s complaint blew the lid off ‘Rs 900-cr’ fraud linked to OctaFx forex trading platform: In a major crackdown, the Pune Police and ED unearthed a Rs 900 crore foreign exchange scam targeting over 500 hearing-impaired victims. Find out how this elaborate scheme was orchestrated and who’s now under investigation. Read here

• RBI governor says “Can’t risk another bout of inflation, need cautious approach”: India’s Monetary Policy Committee remains cautious on rate cuts, emphasizing the need to control inflation amid rising food prices. As demand wanes, a lone voice calls for cuts to boost private investment. Read here

Economy & Sectors

• The changing face of India’s rich: India’s wealth landscape is transforming, with new-age millionaires rising from startups, sports, and stocks. As wealth shifts from traditional assets to financial markets, learn how this fresh affluence is reshaping consumption and investment trends. Read here

• What the Coldplay event tells us about new India: India’s evolving consumer culture reveals a deep-rooted shift toward visible wealth and status, often fueled by credit and social pressure. As spending rises, so do questions: Are we finding true fulfilment, or just chasing validation? Read here

• Understanding EMS – The backbone of the global electronics market: India’s Electronics Manufacturing Services (EMS) market is projected to grow at a remarkable CAGR of 32.3% from 2021 to 2026, driven by domestic production initiatives and rising electronic consumption. Explore how this shift is reshaping the landscape of manufacturing. Read here

Check out CAGRwealth smallcase portfolios

Both 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 web.

Index	26-May-23	19-May-23	Change
Nifty 50	18,499	18,203	1.63%
Nifty 500	15,696	15,407	1.88%
Nifty Midcap 50	9,428	9,176	2.75%
Nifty Smallcap 100	10,010	9,891	1.20%

Chart Ki Baat

Here’s the list of curated readings for you this week:

Personal Finance 

• If you can’t catch ’em, join their Signal groups first, feels Sebi – Market’s regulator Securities and Exchange Board of India (Sebi) is using the oldest trick in policing book to catch new-age crooks on encrypted messaging platforms, said two people with direct knowledge of the matter. Read here 

• Expectation’s debt – What do you call the top-of-the-world status Amazon had in 2021? Was it a gift? A reward for hard work? The natural swings of capitalism? Read here. 
   
• Shruti shares her experience with clients and their investment journey Read here 
   
• Which MF categories will be affected by SEBI’s TER proposals – Fisdom Research put out a report on the Sebi expense ratio paper? Where will the axe fall? What will get cheaper? Read here 

Investing 

• The Great Disconnect between how aspirants learn from the best in normal domains vs in stock markets. Read here 

• Investors Should Sell All Midcaps in India – Investors should consider selling mid-cap stocks, as a lack of liquidity is unhealthy for the sector, according to JPMorgan’s Sanjay Mookim. Read here 
   
• 4 Insights from Rajeev Thakkar – Chief Investment Officer of PPFAS Mutual Fund, shares his insights over Parag Parikh Flexi Cap on completing 10 years. Read here 
   
• Rainbow Children’s Medicare Limited – Read about India’s leading paediatric and obstetrics hospital chain and have a peek at our investment thought process. Read here 

Economy 

• Impact on liquidity due to RBI transfer – While RBI’s liquidity framework entails managing weighted average overnight rate, there appears to be an implicit element of ‘tough love’ at play. Read here 
  

• Go First bankruptcy – a test of whether the country is ready to rebalance creditors’ rights and shareholders’ privilege. Read here 

• Worsening expectations regarding a possible default would make significant disruptions in financial markets – If the debt ceiling binds, and the U.S. Treasury does not have the ability to pay its obligations, the negative economic effects would quickly mount and risk triggering a deep recession. Read here 

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Check out CAGRwealth smallcase portfolios 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 web.

Index	5-May-23	28-Apr-23	Change
Nifty 50	18,067	18,065	0.01%
Nifty 500	15,277	15,219	0.38%
Nifty Midcap 50	9,035	8,962	0.81%
Nifty Smallcap 100	9,733	9,672	0.63%

Chart Ki Baat

Gyaan Ki Baat.

Diversification is a risk management strategy that involves holding your money across an array of different investments to reduce your risk exposure.

Investing the majority of your corpus in the same industry or asset class increases portfolio risk. Diversification doesn’t just mean holding a bunch of different stocks, it works best when positions in your portfolio are uncorrelated meaning that their correlation coefficient is close to zero. All this means that the stock prices need to move at least somewhat independently of one another.

Such diversification can be achieved by allocation of funds across asset classes and within classes, and also geographically by investing in both domestic and foreign markets. This way, even if a particular industry or sector underperforms, it has a controlled or limited effect on your portfolio. Whereas other investments with positive performance will likely offset these negative returns.

Here’s the list of curated readings for you this week:

Personal Finance

• EPFO extends deadline to apply for higher pension till June 26 – Retirement fund body EPFO on Tuesday extended the deadline to apply for higher pension till June 26. Read here.

• Who will bear the extra cost of Higher pensions by EPFO? – It has been decided to draw a 1.16 percent additional contribution from within the overall 12 percent of the contribution of the employers into the provident fundRead here.

• Shruti shares her experience of a visit to the LIC office in Chembur, Mumbai. Two things happened when I went there. Read the 2 part series here.

• The tragedy called SEBI’s RIA regulations- RIAs are concerned that their communication with existing clients might be hit because of the new regulation on advertisements. Apart from this, industry sources tell CNBC-TV18 that Sebi is also planning on formulating a centralised investment account for RIAs to collect money from investors. Read here.

Investing

• 3 chart updates on the Markets – Sharp rally in Indian markets in April, as FIIs make a comeback. Read here.

• How to analyze Steel Industry? – Valuepickr Forum  – Presentation covering commodities/steel cycle decision-making aspect. Read here

• India’s High Corporate Tax Rate is Holding Back Corporate Capex – Not only does India’s high corporate tax disincentivize capex (as explained by steel case study outlined above), but it also puts India at a competitive disadvantage to China. Read here

• Will forcing PSUs to pay dividends make them more valuable? – Stocks that have “Gujarat” in their name are hugely up the next day (April 26). Simply because oh, some news has come, and it sounds good.. Read here

• How Interest Rates & Inflation Impact Stock Market Valuations – This trend makes sense intuitively. The higher the inflation rate, the lower the valuation averages. The relationship between interest rates and valuations is not quite as clearcut. Read here

Economy

• Fed raises rates, opens door to pause in tightening cycle – The Federal Reserve moved its management of the post-pandemic economic recovery into a new phase on Wednesday with what may be the last in a historic series of interest rate hikes and heightened attention to credit and other economic risks. Read here

• India state govt’s FY24 borrowings seen lower due to off-balance sheet debt – sources– Lower market borrowing by state governments was one factor that helped keep federal government bond yields in check in 2022-2023.Read more here.

• JPM buys First Republic bank – The US banking behemoth said in a statement it will take $173 billion of loans and about $30 billion of securities of First Republic Bank including $92 billion of deposits. However, it will not assume the bank’s corporate debt or preferred stock.Read here

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Check out CAGRwealth smallcase portfolios 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.