Smart ways to invest and attain early financial freedom

Friends - In case you are in Bangalore - here is a chance to meet up this sunday -22nd Feb at 10 am in the Bangalore stock exchange.Stocks, Mutual funds (that in turn invest in stocks) and Real estate are well known ways to get good returns on investments in India. Of these, stocks needs specialised knowledge and most people do not have this knowledge. Basically most people do not know how to value stocks.This session is focussed on stock valuation. I will share valuation methods used by Warren Bufffet - and I will share this with Indian examples.So please do come over if you are interested. The session is free and you do not need to pre-book.

2014 was a wonderful year – this was the year when most investments (except gold) gave great returns – there is a good chance you have made decent returns if you were either on Direct Equity or MF or Real estate or even Debt funds. So what does 2015 look like? Looks good. Here are my recommendations for 2015 –areas where you can make 20% plus returns:   Direct Equity - Stay invested in equity and increase your exposure to equity.  I believe 2015 will be the year of equity markets in India. Globally US is doing better and EU, Japan are struggling, China is slowing down and the Emerging countries like Indonesia, South Afr

With Indian stock markets giving a 31% return, there is a sense amongst many of us of having missed the opportunity.   Plus there is this fear that if we enter too late, we will be the losers.   Also quite a few of my readers have some amount invested in stocks and they want to know if they can increase their allocation at the current levels.   And there are others who are asking whether they must exit the stock markets and take home the profits.   So the question that I want to answer is what should I do?   Let us see a few graphs before I share my point of view:   Here is the data of HDFC Bank share and the Nifty for the past 13 years so. If you were thinking of investing on say 1st Jan 2010 – you would have felt uncomfortable as it was pretty high then – but see what has happened since then. This logic is true for most years except for 2007/2008.

This is a question that comes up in each of my wealth advisory sessions. Lately, with the stock markets going up, I see this coming up a lot more often than before.   In the past 12 months the BSE Sensex has gone up by 36%. Every week it is scaling new highs and even though every investor is happy seeing his portfolio go up – he/she also knows that it is only paper money, till the stock is sold and the money comes into your bank account. So the question is - should I sell my stocks?   As per me – there are only three reasons for exiting an investment. They are:   You need the money for an expense - for example you need money for a planned car upgrade or an unplanned hospitalisation.  You have investments giving you great returns – but what to do – you need to sell
As a starting point, you may like to read my last post on tax saving options -http://mbaclassdiscussions.blogspot.in/2011/12/how-to-save-tax-under-section-80c.html Not much has changed since I last wrote this - except one thing - the finance minister, Mr Jaitley, has increased the amount that you can invest under this section from Rs. 1.0 lac to Rs. 1.5 lacs per annum from this year. Tax saver Mutual funds are basically equity funds that have 60% plus exposure to equities. To avail of tax benefit, you need to stay invested in the fund for three years and that is where the catch is. In Mutual funds, I do not believe in committing to stay invested in one fund for so long. With the markets being so dynamic, I believe in keeping a check on MF’s every quarter and changing my portfolio if the situation demands.