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The Steady Route to Financial Growth A Sharekhan First Step Initiative

The Need for Investments

The Expense of Living
Over the last 20 years, the price of milk has grown 11% p.a.--from Rs 2 per litre in 1984 to Rs 27 per litre in 2008

As Inflation rises, the prices for goods and services increases…

Impact of Inflation

Age and Investment Stages: It’s about Time Start Career Buying a House Children’s Education Retirement Marriage Fully dependen t on Salary Fully dependent on .

Start Career • Begin creating Wealth – Savings – Tax Planning HOW TO I NVEST? • Life stage expenses: Gadgets. vehicle etc. • How it Works: Early stage regular investments through SIPs and the Power of compounding  Plan taxes through PPF and ELSS  Start a SIP in Equity Diversified Funds or ESOPS . lifestyle accessories.

 Build Risk Cover Term Insurance Policy to cover for liabilities • How it works: Planning for your goals and systematic investments .Marriage Buying a House • Wealth accumulation – Savings – Tax Planning HOW TO I NVEST? • Life stage expenses: – Setting up a house  For buying a House: Set aside a maximum of 40% of net income towards EMI for Housing Loans.

can be created from income . • How it works: Additional assets upto 15% p.F [Maximum 3 funds] through SIP  PPF [in child’s name-start from Age 1] as per the Asset Allocation arrived at based on Risk profiling.a.Children’s Education • Wealth management • Lifestage expenses: – Children’s education – Provide life long protection and expenses for the family HOW TO I NVEST?  Equity Diversified M.

Children’s Education .

Income Funds. the asset allocation HOW TO I NVEST?  Equities/ Diversified M. Alternate Assets like Commodities and Gold. earn higher returns to beat inflation and live comfortably.Retirement • Wealth Preservation • Making your money work for you: Preserve capital. PPF. Real Estate as per the Risk Profile and Asset Allocation. International Equities.. travel or hobbies • How it works: As one approaches the Retirement period. ./.F. • Life stage expenses: Medical or health bills.

Retirement Source : DSP ML .

How fast should you grow? Fixed Deposits give an interest of Inflation rate today is around 12% So you need to invest with the goal of at least getting a HIGHER rate of returns than the Inflation .

Investment Options .

What can you Invest in? Type of InvestmentsAsset Classes CashSavings Bank Account Mutual Funds (Liquid Funds) DebtFixed Deposits Mutual Funds (Debt Funds) Equity Shares / Stocks Mutual Funds (Equity Funds) ULIPs Exchange Traded Funds Commodities Precious Metals Real Estate Others .

HSBC Liquid Fund .Cash Investment Options Savings Bank Account: You open a bank account and earn a fixed rate of interest on money deposited. The earnings that Liquid Funds provide is determined by short-term interest rates.g. fixed-income securities such as Treasury Bills. HDFC Bank Savings A/c Liquid Funds: Liquid Funds typically invest in short-term. high-quality. e. e.g.

Debt Investment Options Fixed Deposits: Deposits placed with any scheduled bank/corporate for a fixed tenure at a predetermined interest rate . e. ICICI Bank Fixed Deposit : HDFC Ltd.g. ICICI Prudential Long-Term Plan . e. Fixed Deposit Debt Funds: Debt Funds invest in fixed income securities such as bonds issued by companies and government agencies.g.

Insurance: ULIPs are insurance plans that allow you to invest a part of the insurance premium into Equity Funds. . Portfolio Management: PMS lets HNIs invest a corpus of greater than Rs 10 lakhs to be managed completely by fund managers for a fixed period.Equity Investment Options Direct Equities: You open an account with a broker and trade online or offline. Equity Funds: You invest in an Equity Fund which invests in a portfolio of equity shares depending on the investment objective of the scheme.

Other Avenues ETF: These are close-ended exchange traded funds that are listed on any one of the stock exchanges to provide liquidity to investors Eg. Kotak Gold Fund Commodities: Includes investments in precious metals. This can provide an excellent buffer and a strong alternative investment . oil and agricultural produce.

Comparing Investment Returns… *Interest returns as CAGR for a 20-year period from 1985 to 2005 Source: The Economic Survey 2007-2008 .

61 Lakh . 27 Lakh Rs.a. @ 10% p. 5.000 every month for 20 years… If the money grew at __% p. 34 Lakh Rs. Rs.a.Why Equities? If you invested Rs. then your corpus would be worth … FDs Equities @ 15% p. Gold @ 8% p.a.a.

HIGH RETURNS Aim for avoid Risk is actually a Bigger Risk Settling for Fixed Returns to .

Guidelines to Investing in Equities .

65 66 – 75 Equity Allocation Other Asset Classes 85% 75% 65% 55% 45% 35% 15% 25% 35% 45% 55% 65% .35 36 – 45 46 – 55 56 .Prescribed Equity Allocation Age Band (years) 0 – 25 26 .

Debt .Equity. etc) – Risk-Reward is also dependent on your trading style (day trading.. Commodities. futures trading) • Your investment style and allocation for different asset classes depends on your comfort with taking risk . • Every investment has a risk-reward attached to it. delivery-based.. – This risk-reward will vary based on the Asset Class you choose (Cash.Understand Yourself.

Which category do you fall into? Investor – Long-term view – Invests in fundamentally strong companies – Time involvement is low – Patience is the key – Typically. has a highrisk appetite . has a low risk appetite Trader – Has both short-term and long-term views – Time involvement is high – Discipline is the key – Typically.

” HOW TO I NVEST?  Take a long-term view  Follow prescribed allocation  Research stocks  Invest in fundamentally strong companies   Invest with professionally AMC – Low to Medium riskMutual Fund/PMS return Will only invest with surplus money Expects 15% to 20% return .The Investor “I want to invest for a secure future. and want a corpus of some emergency funds at all times.

The Trader HOW TO I NVEST? “I want to get high returns quickly. And I don’t mind taking risks for it”  Trade on short and long-term basis momentum (1 to 5 days) or positional (1 to 15 days) basis  Earn returns by taking high risks    Trading in F&O markets Medium to High riskreturn appetite Comfortable with volatility and leverage Looking to make quick profits Aims for higher than 20% .

TIP #1 Start Your money will keep working for you EARLY .

When you start makes a big difference… Value at the age of 60 Rs 17.97 lakhs Ram invested Rs 1 lakh at the age of 30 Shyam invested Rs 5 lakh at the age of 50 *At 10% Returns .45 lakhs Rs 12.

The Power of Compounding • Interest earns more interest • Simple interest at 10% p. grows as: 100  110  120  130  140  150… • Compound interest at 10% p.a.a. grows as: 100  110  121  133  146  160… .

The Power of Compounding .

TIP #2 Invest Even a small amount will grow into a formidable sum over time REGULARLY .

23 Crore Age: 25 Invested Rs 5.000 every month Age: 45 No Investment Age: 60 Rs 12 Lakh Invested Vijay Rs 5 Crore .000 every month Age: 60 Rs 24 Lakh Invested Rs 1.How Does This Work? Ajay Age: 25 No Investment Age: 40 Invested Rs 10.

Focus on Multiplier LONG-TERM .TIP #3 Think Effect Ignore Short -Term Fluctuations.

‘Market Timing’ does not matter in the LongTerm *For historical performance of Sensed over 25-years from 1980 to 2005 Source: ICRA .

TIP #4 Be Sound Principles for Investing in Equities/Stocks Disciplined .

Look for positive long-term growth 3. .The Sound Principles of Equity Investments 1. Rest is speculation. Invest in companies that have a sensible price tag THIS are the only things that matter. Check if the company you are investing has trustworthy management 4. Invest in a business you understand 2.

Made on a short-term or quick return basis 3. Trying to time the market 7. Lack of monitoring of portfolio 4. Not buying when the markets are down. Inadequate diversification or too diversified 5. . Relying only on past performance 6.The Common MISTAKES in INVESTING 1. Made on ‘tips’ from ‘contacts’ 2.

Start Early 2. Be Disciplined .To sum up… 1. Think Long-Term 4. Invest Regularly 3.

How Sharekhan can Help You .

Services at Sharekhan • Sound financial advice based on highly acclaimed research • Execution of your investment plan through convenient online trading platform and Dial n Trade • Portfolio Monitoring and support through call centre and Relation Manager (for HNI clients) .

Top Picks Portfolio – Mutual Funds – SIPs * The Top 1.Most Read Analysts in Rank Analyst July.Sound Financial Advice • Investment plan based on your risk profile comprising of recommendations from Sharekhan’s research team* for – Stock Ideas. 2008 Broker by 1 Research. Research Edelweiss Securities Ltd. Goyal Team. Sharekhan Sharekhan 2 3 Vishal. Networth Stock Broking Readership 388 178 150 .

Investment Plan .com to…  Buy and sell Shares  Invest in Mutual Funds or apply for IPOs  Start an SIP in Stocks and Mutual Funds  Invest in Sharekhan’s Top Picks recommendations  View your entire portfolio and fund allocation with your personal Portfolio tracker .Execution Use your investment account with Sharekhan.

Open your Investment Account now! Meet the Sharekhan Service representative to know more about how to invest with Sharekhan Fill in the account opening form and sign-up Access our Knowledge Center and Demo Section for step-by-step assistance on trading online Start trading online with your linked demat account Access your real-time updated portfolio and digital certificates .


we understand that your investment choices should last you a lifetime . delivered simply • At Sharekhan First Step.Ready to take the First Step? • Sharekhan First Step is a programme designed to ease a new investor’s entry into the Financial Markets • It is a comprehensive support program which arms you with sophisticated financial information.

Thank You .

Systematic Investment Plan (SIP) • Invest regularly as per your convenience • Stock SIP: Invest in your choice of listed scrips • Mutual Fund SIP: Invest in funds from over 19 fund houses • Backed by Sharekhan Research reports with recommendations .

Stock SIP • You can start a SIP for stocks and invest regularly in equities • With Sharekhan SIP. you can choose from thousands of listed stocks from one location • View your online portfolio and change it based on performance View the Demo of Sharekhan Stock SIP .

SIP in Mutual Funds MF Flexi SIP .Mutual Fund SIP • With Sharekhan Mutual Fund SIP. choose from Mutual funds from over 19 fund houses • Mutual fund Advisory Desk Monthly Newsletters: Top Equity Fund Picks • With Flexi-SIP. you can change the duration and amount flexibly based on the performance.

a. Relative Performance (Sensex) 45.8% p.8% p. .Access Recommendations from Top Picks • Top Picks is a selection of the top 12 winning stocks selected by Sharekhan’s Central Fundamental Research team • Invest directly in Sharekhan’s Top Picks Basket through View our • Sharekhan’s selection of Top Picks has consistently outperformed the Sensex TOP PICKS Demo Top P icks P ortfolio P erform ance Absolute Returns 59.a.

Tax Free Income • Dividend income received on stocks are tax-free • There is zero capital gain tax on profits of stock investment of more than one year .