Tag: investments

Bitcoin Vs Other Investments (Gold / Bonds / Stock & Shares)
In simple words investment means ‘saving’ in present for ‘profit’ in the future. Almost everyone invests somewhere but not everyone gets profit. Before investing, one must have proper knowledge of all the options available in the market. Nowadays BITCOIN has become the most trending option for investment. BITCOIN is a digital currency which is becoming the popular choice of many people. This article is about Bitcoin Vs Other Investments .

Bitcoin Vs Other Investments (Gold / Bonds / Stock & Shares)

You know that Bitcoin is the trending Investment today . And what exactly is this bitcoin can be said in a word called cryptocurrency . To understand that you must know the difference between cryptocurrency and fiat currency .

Cryptocurrency And Fiat Currency

Cryptocurrency- It is a digital currency which is mainly used for online transactions. They are completely different from the standard currency as they are not controlled by any authority. Bitcoin is one of the most popular cryptocurrency some other digital currencies are LITECOIN , RIPPLE , DOGECOIN , AND ETHEREUM.

Fiat Currency –The government legally declared fiat money as a currency to be used by all the citizens for buy goods and services for example in India fiat currency is notes and coins so, every citizen of India has to accept it in exchange for goods and services no one can refuse to accept it. Fiat currency is completely controlled and centralized by the authorities. Its value depends on the relationship between supply and demand.

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Comparison Between Cryptocurrency And Fiat Currency
- Cryptocurrency is not controlled by any authority so the users don’t feel pressure. The decentralized factor of cryptocurrency makes the user financially powerful, whereas fiat currency is controlled by authorities so the pressure from authorities makes the user ‘tied’, as authorities have the right to do anything to the user’s account.
- Cryptocurrency is created by using computers, based on calculations that are extensively complex in nature, whereas fiat currency is produced by the government.
- Cryptocurrency saves time, if a user makes the transaction through cryptocurrency it will only take few seconds whereas if the user makes a transaction through fiat currency, it usually takes 2-3 days as its process is too long so this makes a transaction through fiat currency as time-consuming.
- Cryptocurrency is very different from standard currency as its supply is fixed its value depends on its demand, unlike fiat currency whose value depends on the market prices of goods and services, for example, if the price of good and services falls the value of money rise and vice-versa.
- Cryptocurrency allows the user to send money directly to the person they want to whereas if a user wants to send money through fiat currency one has to depend on the middleman.
- Cryptocurrency is deflationary as it doesn’t get any impact by the market price of goods and services, whereas fiat currency is inflationary as it gets impact by the market price of goods and services.
- Cryptocurrency is the digital currency, so they cannot be lost whereas fiat currencies are notes and coins can be lost.
- It is very easy to store and carry cryptocurrency, whereas it is very difficult to store and carry fiat currency.
- Cryptocurrency cannot be damaged and destroyed, but if the system damage on which cryptocurrency is stored it can be backed up and save on another system, whereas fiat currency can be damaged or destroyed and can never be backed up.
- Cryptocurrency charges minimum 0.01% fees whether you send a small or big amount, whereas if you use fiat currency for sending money you have to pay the charge which depends on the amount you are sending.
- Cryptocurrency is not going to devalue whereas fiat currency can be devalued by government.
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Bitcoin as the Trending Cryptocurrency

Bitcoin is a form of digital or virtual currency invented on 3 January 2009 by unknown programmers under the name of Satoshi Nakamoto. It has become one of the most popular digital currency. Bitcoin uses peer to peer network where one can send money directly to other person and all the transaction that are made are recorded permanently with the help of blockchain. With the invention of the BITCOIN one more whereas tool was also invented that is blockchain. It plays an essential part in the transaction of digital currency, it works as a storehouse or record book that stores all records of transactions that happens globally.

How and Where to Use Bitcoins ?

One trending thing you must know is how to use bitcoins and where to use bitcoins , how to buy and sell bitcoins .

Bitcoin can be used for online shopping and other digital transactions. Bitcoins are popularly known for investments. If somebody wants to invest in BITCOINS, the first thing they have to understand is that they are buying the digital currency at the low price and selling them at the high price which will give them profit. E-wallets with unique keys are made to store bitcoins. When transactions are made money from one e-wallet transfers to another e-wallet in few seconds with the help of computers and bitcoin network.

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Bitcoin Vs Other Investments

There are many options available in the market for investment. Each option has its own terms and conditions,a different process of work and their own market risks. So will see Bitcoin Vs Other Investments (Gold / Bonds / Stock & Shares) .

Let see Bitcoin Vs Other Investments

Now will see the comparison between different Investment with respect to Bitcoin .

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BITCOIN VS GOLD
1. Since ancient times, gold is usually the most popular choice of people for investing. Many people invest in gold as most of the time it gives profit to the investor.
2. Though gold is the first choice of investors , bitcoin is much better than gold . As bitcoin can easily carry no matter in how much quantity it is, on the other hand, to carry gold from one place to other place is difficult and not at all safe.
3. User can easily access their bitcoin wallet from anywhere by using a computer, laptop or a smartphone this is not possible with gold.
4. .Chances of forgery are possible in gold, whereas it cannot be possible with bitcoins.
5. The government can confiscate gold but can never confiscate bitcoins.
When you think about Bitcoin Vs Gold as Investment then its better to consider Bitcoin .

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BITCOINS VS BONDS
1. A bond is where the investor lends some money to a corporation for a certain time period at a fixed interest rate. This option for investing is not safe as it depends upon a third party, whereas bitcoin is independent where a user doesn’t depend on a third party. Bitcoin allows the user to be powerful on their own.
Bitcoin seems to give you better when you talk about Bitcoin Vs Bonds .

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BITCOIN VS SHARES AND STOCK
1. If one chooses shares and stock for investment it means they are buying shares of a company at a price that is fixed by a company. Buying more stocks means your power and ownership in company increases which will result in more profit.
2. The profit of the investor completely depends on the profit of the company and it also takes time to make the profit such as two or three years, whereas bitcoins make the profit instantly it will only take few weeks or months.
3. There is one more advantage of investing in bitcoin which is not available in other investments, that is if you invest in bitcoin you doesn’t have to pay tax but if you invest somewhere else you have to pay tax.
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If you think about Tax free investment with huge profit then Bitcoin is the option . Because bitcoin is tax free investment strategy while share and stock profits are subjected to tax deductions . So when taking Bitcoin Vs Stock/ Share , the former is the hero in investment.

CONCLUSION

BITCOIN is the best option for investing it is getting popular widely .
Many people started investing it. Since 2015, Bitcoin profit continues to rise. This currency is accepted widely without converting it to the standard currency. Users can access it from anywhere, they just need a computer with an internet connection and its security is not at all an issue, as blockchain records all the data of transactions that happen widely.But we have also given a comparison on Bitcoin Vs Other Investments (Gold / Bonds / Stock & Shares) for your better investment decisions.
August 7, 2024
Mutual Fund A Complete Guideline – All You should Know
Here we will discuss all about mutual fund including basically what is a mutual fund and the different types of mutual funds. Also we will focus on how to analyse the performance of the mutual fund investment , mutual fund table . By knowing all this you will yourself have an idea about it but still we have given what you should know to choose the best mutual fund.

So now lets start with the basics of our topic.

What is a Mutual Fund?

Mutual fund is basically a type of investment fund which is formed by combining various stocks and shares. It is generally safer than shares and provides good returns as many of the funds have a locking period of three years. i.e Like a Fixed deposit. Mutual funds provide a higher interest than traditional fixed or recurring deposits.

In India, mutual Funds are becoming more popular as they are used for tax saving purposes in. They provide quick returns compared to the Life Insurance Policies which were used mainly for tax purposes before.

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Different types of Mutual Fund

There are basically four types of mutual funds available in the market and they are given below.
1. Fixed Income funds
2. Money market funds
3. Hybrid funds
4. Equity funds
Fixed Income funds – These funds are also called bonds or bond funds. As the name indicates, the money is invested in such a way to provide the investor a fixed income. Mostly the money are invested in government based organizations as they are more stable.

Money market funds – In these funds, money is invested for a short period of time but can yield a decent amount of return compared to the traditional fixed deposits in banks. Your money is very secure in this type of fund and you don’t have to worry about losing it.

Hybrid funds – As the name indicates, here the money is invested both in bond funds and equity funds. We can call this fund as “Funds of Funds” .

Equity Funds –See the below section , we have detailed it.

What is Equity Fund?

Equity Fund is the most popular type of mutual fund where the money is invested in stocks and hence it is also known as Stock Funds. It can be open end or close end fund. Money is invested in the stocks of various types of companies.

Different types of Equity Funds

There are many types of equity funds available in the market and the most popular ones are below.

International / Global Equity Funds – As the name indicates, these funds invest in stocks of companies outside your country.

Sector Equity Funds – These funds invest in different sectors like telecommunication, banking, IT etc.

Index Equity Fund – This type of fund follows a predefined set of criteria and tracks specified investments. E.g. S&P 500 Index Fund.

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How to choose a mutual fund?

There are thousands of mutual fund schemes available in the market and you should be careful in choosing the right fund according to your needs.

Low Expense ratio

Find out the expense ratio of the mutual fund you are planning to buy. Expense ratios include the administrative fee, annual fee, management fee and other expenses. It varies from 0.25% to 1% of the assets. It is advisable to choose a fund that has expense ratio less than 1% as it will perform well when compared with funds having higher expense ratio.

Low or No fees

Usually mutual funds will have two major fees namely front load fee and back load fee. Front load fee is the amount deducted when you buy the mutual fund whereas Back load fee is the amount deducted when you sell the fund. The value of this fee may vary from 3% to 8% of the total invested amount. To avoid this, you can buy mutual funds with no load fees called no-load funds as this will save some money.

Analyze the past results

Before finalizing the mutual fund, make a complete analysis of the results of the fund over the past few years. In this way, you can find out whether the fund is performing constantly and making profit.

Know your objective

Why you are investing in mutual funds? Are you expecting a short term gain or you have a long term goal? Definitely you should have a concrete answer for this question for choosing the right fund. If you have a long term goal, you can invest in volatile funds with some risks but can yield a high profit in the long run. If you are expecting a quick return, then it is better to invest in stable funds like government companies.

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What is a Mutual Fund Table?

You can find the mutual fund table in financial related websites or newspapers. Understanding the mutual fund table helps in knowing more about the performance of the mutual fund. A sample mutual fund table is given below.

52W high & 52W low – This represents the highest and lowest value of the mutual fund over the past 52 weeks or one year.

Fund – Name of the mutual fund

Spec. – It explains the various characteristics of the mutual fund. For eg. N means No-load, FR means front end load.

$chg – Subtracts the current price with the price of the previous day. If it is -, then price has decreased, else it has increased. (Currency denoted in dollars).

%chg – Same as $chg. The difference is expressed in percentage.

high & low – These two fields represent the highest and the lowest prices of the mutual fund in the past week.

cls – Closing price. i.e final price of the fund at the end of the day.

$chg – Change in the price of the fund from the past week. (Currency denoted in dollars).

%chg – Change in the price of the fund from the past week.

How to know the performance of a mutual fund?
- Find out the returns the mutual fund can offer in 1 year, 3 year and 5 year time period. It can give a good idea about how much returns we can expect. Also find out the record of the mutual fund for the past 5 to 10 years.
- Try to understand the investment strategy of the particular fund. i.e where the fund is going to invest the money.
- Find out the history of the mutual fund. i.e how long it is in the market. If it is old, then it should be a safer mutual fund as it has survived for long time.
Mutual funds is a very good option of investment with high returns compared to the conventional fixed deposits provided we choose the right type of funds.
July 13, 2024
Investment on Stocks and Shares -Pros and Cons
Today investment is so popular as everyone wants to increase their assets.But finding the right choice of investment is quite difficult . Short term investment or long term , and where to invest all this buzz every investors head. Investment on Stocks and Shares is always the popular choice.

Investment on Stocks and Shares

Let us take a look on the Investment on stocks and shares to understand which is the right investment choice .

But all have a confusion where they have to invest – Is it on stock or on shares. In order to answer this you should the pros and cons of stocks and shares.

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What is Stock?

You might have heard the term stock not only in financial sector but in many fields where purchasing is involved. In financial sector, Stock is nothing but a general term which is used to describe the ownership in a company or corporation. It is issued by means of certificates which are called ‘Stock Certificates’. To put it in simple words, stock is a collection of shares.

Stocks can be either Preferred or Common. If someone is holding a common stock in a company, they can attend the board meetings and participate in the voting for decisions taken on various issues. On the other hand, if someone is holding a preferred stock, they can’t vote. But Preferred stock holders are eligible for receiving dividends from the company.

What is Share?

We are hearing daily about the share market in the news section in TV channels. Share is nothing but the smallest unit of a stock and it is specific to the company. For eg. “I bought N shares of C Company”. Here N indicates the number of shares bought and C is the name of the company. Unlike stock, share can be measured in numbers. If a person has bought more number of shares of a particular company, then he/she becomes the shareholder of the company. Generally companies will release only certain portion of their shares to public.

Here you have seen stocks vs shares . Now to know more in detail you should know the pros and cons involved in both investment to take a wise decision. Investment decisions is based on the risk involved and the preference of risk. So you have to decide your investment choice by evaluating the pros and cons.

By just knowing what a stock is and what a share is you cannot take any major decision on Investment on Stocks and Shares. So know further to increase your knowledge on investments.

A .1 ) Stock – Pros and Cons

Pros:
- Dividends: If someone buys a preferred stock, they will get dividends from the company which can be used for reinvesting again.
- Passive Income: Any income from the stocks is passive as you don’t have to put any effort for getting money.
Cons:
- No Minimum Guarantee : As the stock market is fluctuating, there is no minimum guarantee for profit. You cannot predict the interest amount as compared in other financial sectors like banks.
So here you are understanding investments and stocks . This will give you key idea on stock but to take a final decision of investment you should know the pros and cons involved in shares as well.

A .2)Share – Pros and Cons

Pros:
- Passive Income: Share trading is a good source of passive income as you are getting money without putting any effort.
- Qualification: You don’t need any great qualification for investing in shares but a basic knowledge about shares are enough to start with.
- Travel: You don’t have to travel or do any physical work for investing in shares. It is very flexible and you can work at your own timings by relaxing and sitting at home.
- Less Investment: As shares are available in various ranges of prices, you can buy shares with less value and you don’t have to spend more money which is especially helpful for beginners.
Cons:
- Share Buying : Buying wrong shares may result in heavy loss which will affect you physically as well as mentally.
- Quarterly Results: When a company announces its quarterly results, you can see a drastic change in the price of the share. If the results are bad, then your share price will go down.
So here you are having 50 % knowledge about Investment on Stocks and Shares. Moving to know further on stocks and share will help you to decide better on investment .

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Top 5 Factors to Consider When Selecting a Stock
- Always choose stocks that offers dividends as it is more beneficial for your future investment.
- Find the market cap for the stock you are buying. Mid cap stocks are usually better than other stocks as they provide best return on investment stocks .
- Find out whether the price you are paying for the stock is really worth. Sometimes we may spend more money for the items than their actual price.
- Find the enterprise value of the company from which you are going to buy the stock. It will help to find the true value of the company.
- If you want to become a long term investor for a company stock, you should gather all information about the company like products/services offered, top level management, future projects, profit/loss balance sheet etc.
Factors to Consider When Selecting a share
- Before buying the share of any company, add the company to your watch list for a week or so and observe its rates daily. There are many free portfolio trackers available online. You can subscribe for one and start analyzing. Also gather information about the company’s performance and its growth.
- Divide you share investment equally into shares that grow quickly and constant growth shares. Oil company shares are quick growth shares as the oil prices are changing often. Shares of Banks provide a constant growth as there is no sudden change in their policies.
You should analyse the risk to take an investment choice and it differs from one person to another .So you should know this before buying stocks and shares.

Investment on Stocks and Shares should be analysed by knowing the risk involved in it . Some of you may be risk lovers and some o you will be risk averse. So which gives you the lesser standard deviation you can go for that when you think about increasing your asset.

Risks in Stocks
- Losing money – Loss of money is the biggest risk in stock trading as there is no minimum return guaranteed as the stock market is fluctuating.
- Credit Rating – If the credit rating of a company goes low, it will affect the price of the stock because the company is getting its financing or loans based on it. A low credit rating means the company is not able to pay its debts in time which indicates a poor performance of the company.
- Media – If a company is making a news to the media often even if it is a rumor, it will affect the price of the stock badly.
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Risk in Shares
- Fluctuation: The biggest risk in share is instability as the price of the share is not constant and changes daily. On the positive side, you will get profit in short time if the price of your share increases. But if falls drastically, you will suffer a heavy loss if you hold more number of shares of that particular company.
- Health factors: You may have to monitor the price of a share daily if you are investing huge amount of money. You cannot sell the shares if the prices has dropped and have to wait till it goes high. This may affect your sleep in the night as you will be thinking what will happen tomorrow.
- Choosing Right shares: If you are beginner in share trading and doing it without the help of any financial advisor, it will be difficult for you to choose the right shares as you don’t have much knowledge.
- External factors: There are many external factors which decide the price of a share without your involvement like change of government, change of directors of the company etc. Suddenly the company may go bankrupt and you will get zero money as return, in such scenarios.
Conclusion

Investing in shares and stocks are not free from risks. But if they are analyzed and invested correctly, you can yield high returns.So you can now decide about Investment on Stocks and Shares according to your choice.
July 13, 2024