ABC of Investment

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P/E Ratio and Evaluation of share !

- September 29, 2018

Price to Earning (P/E) Ratio Suppose price of each Share of one Automobile Company PQR is Rs.500/- and that of another Automobile Company UVW is Rs.5000/-. Now, if you consider the share of UVW is overpriced than PQR just because of higher share price, you may be proved absolutely wrong. P/E Ratio is one of the important parameters to check and compare the proper valuation of stocks belonging to same sector. What is P/E Ratio? It is the ratio of current Share Price of one company and its Earning Per Share in last 12 months. Physical Significance of P/E Ratio: Suppose the P/E ratio of company PQR is 20 i.e. the investor will pay Rs.20/- for earning of Rs.1/- per share. Again consider the P/E Ratio of company UVW is 10 i.e. the investor will pay Rs.10/- for earning of Rs.1/- per share. So, share of PQR is overpriced and that of UVW is underpriced. P/E Ratio above 20 is generally considered higher. Higher P/E Ratio indicates higher valuation or price and fast growt

The concept of 'Market Making' & 'Market Maker' in Stock Market !

- September 29, 2018

'Market Making' & 'Market Maker' Suppose one buyer is willing to buy a specific stock but there is no seller to complete his order. The reverse case may also occur in Stock Market. To sort out this real life situation, the concept of 'Market Making and Maket Maker' was introduced by SEBI (Securities and Exchange Board of India) in indian Stock Market. Market Maker is typically an institution which is appointed by Stock Exchange to increase and meet demand-supply of shares in Stock Market. The Market Maker places buy-and-sell call at the same time for a specific time period for a guaranteed number of shares. So, 'buy / sell' requirement of investor/trader is fulfilled by Market Maker's own holding or inventory of stocks. The Market Maker books profit by the difference between buy-call and sell-call placed by him. Suppose the Market Maker places a quote of Rs.500-450, which means that the Market Maker will buy stock at R

"Atal Pension Yojana - Jan Dhan to Jan Suraksha".

- July 23, 2018

Atal Pension Yojana (APY) – Jan Dhan to Jan Suraksha : APY is a social security scheme introduced by Govt. of India specially for poor people working in unorganised sector in india. APY was introduced in budget of 2015-16 and it is regulated by Pension Fund Regulatory and Development Authority (PFRDA). APY is for encouraging and enabling citizens to save for retirement and getting guaranteed pension by Govt. of India. All citizen of India in age goup of 18-40 years, and having a bank account is eligible to join APY. APY can be opened in any bank or post office. APY is a periodic contribution (monthly) based pension plan where contribution stops at the age of 60 and pension starts. The guaranteed fixed monthly pension after retirement under APY is Rs.1000/-, Rs.2000/-, Rs.3000/-, Rs.4000/- or Rs.5000/- as per choice of monthly contribution according to age of the subscriber. Primary objective of APY is enabling systematic savings during working life of th

Filing of Income Tax Return for Assesment Year 2018-19 in India.

- July 18, 2018

Key points to know: The points will be applicable for salaried individual in India. The last date of filing ITR i.e. Income Tax Return will be 31/07/2018 for Financial Year 2017-18 or Assesment Year 2018-19. ITR can be filed after due date with penalty of Rs.5000/ for individual having Annual Income above 5 Lakh and and Rs.1000/- below 5 Lakh but upto 31/12/2018. Penalty amount will be Rs.10000/- upto 31/03/2019 for the first group stated above. ITR-1 will be applicable for salaried individual with annual income below 50 Lakh. 26 AS statement should be downloaded before filing ITR to check all types of income reflected in the said 26 AS statement. Gross Salary, Perks, employment tax etc should be mentioned in efiling to calculate 'Income chargeable under head salaries'. Savings Account interest should be shown in 'Income from other source' head. Maximum Rs.10000/- will be exempted from paying any tax under section 80TTA. Deduction should be mention

"Calculation of PENSION from NPS"

- March 28, 2018

Assumption Let your Age be 30 Years. You would like to contribute Rs.5000/- per month to your Tier-I Account of NPS. Total years of contribution is 30. Total investment = Rs.5000/- X 12 X 30. Your expectation on return on investment is 10% on annual basis. You would like to buy annuity with 40% of total corpus at the age of 60 years. Your expectation on annuity rate is 6 %. Calculated Result Based on Assumption Total amount of money invested up to age of 60 years will be Rs.1800000/- (18 Lakh only). Total Corpus generated will be Rs.11396627/- (1.13 Crore only). Total Return or Gain on investment will be Rs. 9596627/- (95.96 Lakh only). Lump Sum value to be withdrawn at maturity = Rs.11396627/- X 60% =Rs.6837976/- (68.37 Lakh only). Annuity Value to be purchased for pension = Rs.11396627/- X 40 % = Rs.4558651/- (45.58 Lakh only). Your expected monthly pension will be Rs.22793/- ( Rupees Twenty Two Thousand Seven Hundred Ninety Three Only).

"Equity Mutual Fund : Basic Concept"

- March 12, 2018

What is Mutual Fund? A Mutual Fund is a pool of money from investors who wish to make money. It invests money in Stocks, Bonds, money market instruments and different types of securities. It is a collection of different investments. It is managed by professional Fund Manager. Mutual Fund is well diversified investment tool. It is a low cost investment option. It may be a tax saving investment vehicle. Investments in Mutual Funds are subject to market risk. What is Equity Mutual Fund? Money in this type of Mutual Fund is invested purely in equity / stock market. If you invest in 'Equity Mutual Fund', all your money will be invested in stock/equity market by the Fund Manager. Types of Equity Mutual Fund ? Equity-Large Cap : Money is generally invested in stocks of Large Market Capital (> 25000 Crore) like Maruti Suzuki, SBI, Infosys etc. Equity-Small Cap : Money

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