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Previously we discussed what is the net asset value? Now we will discuss what is rebalancing? And its importance Over time, your portfolio might not align with your investment or savings objective because of the volatility in the market. Sometimes, some asset classes may outperform the other asset class in your portfolio and vice versa. So, accordingly, you need to rebalance your portfolio. What is rebalancing? Rebalancing a portfolio means changing the weightage of assets in your portfolio holdings. It is not necessary or compulsory to change your portfolio allocation. Not taking any call for rebalancing is also the process of rebalancing. In simple words, let’s say if you are holding equity as 50% and debt as 50% in your portfolio, as per the market conditions, financial goal, and considering other factors, you may not require changing the allocation. You may require doing a frequent review of your portfolio but may not require rebalancing. Keeping track of your portfolio and rebalancing it whenever required is essential.   For example, suppose you want to accumulate Rs 1 Crore for your daughter’s higher education over 15 years, so you need to start with a SIP Amount of Rs 17,018/- per month. Target Amount for Education₹ 1,00,00,000Investment Horizon15 YearsRiskHighSIP Amount₹ 17,018Actual Wealth Accumulated₹ 1,00,00,153Portfolio XIRR14.57% Let’s see how your portfolio has grown over time, even in turbulent times, if you were doing portfolio rebalancing. We will see in comparison with BSE Sensex as Benchmark. Note: Period understudy is between Jan-07 – Dec’21. LHS is Investment Value & RHS is BSE Sensex Value.Source: BSE Sensex By looking at the above graphical presentation, you can see that the portfolio has been rebalanced from time to time. All the arrows represent when the rebalancing has been done. Here, we did not try to time the market. If you look at the period from January 2019 to December 2021, the portfolio's volatility is reducing. To understand this better, look at the March 2020 crash period. BSE Sensex has been down by almost -29% from its recent pick in Dec '19, whereas the portfolio is down by almost 5% only because rebalancing in the portfolio is being done continuously. When you do goal-based investing, the idea is to achieve the goal with optimized risk instead of running out of cash. The above portfolio has been rebalanced to reduce the risk when you are close to your target; the risk comes down to low risk from the high-risk category. In the end, the capital should be preserved because, in a pre-defined event like child education, child wedding, retirement, etc we cannot delay it, but we can preserve our capital gains by shifting them to a safer asset class. The below table shows how the risk in the portfolio has been reduced. Investment periodNo of yearsRisk0 -11 years11 yearsHigh12 years1 yearAbove average13 years1 yearAverage14 years1 yearBelow average15 years1 yearLow Now, you may say that if you remain invested without rebalancing your portfolio, you could have achieved your target because the market has recovered after that crash. Yes, you are right, but that would be with a very high risk. Let's assume a situation where the market did not recover after the crash. Then, you will not be able to fund your daughter's education. So basically, you derailed from the entire goal. The time and money you have invested for the past 15 years come down to zero. Because that downside risk is very high, you cannot push that pre-defined event/goal. Conclusion: Rebalancing the portfolio is critically essential. In a pre-defined event/goal, you cannot delay it. But with the help of rebalancing, you can achieve it even if the market is crashed. So, consider rebalancing a crucial part of your portfolio. Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

In the previous article, we discussed AUM in mutual funds in this article, we will discuss what is foreign investment? Financial institutions and individuals wishing to diversify their investment portfolios seek multiple ways to earn outside income. The increasing inclination toward stocks, IPOs, and bonds investments sparked the individual’s interest. They keep up with the latest investment updates.   Apart from this, Foreign Investment is considered a growth catalyst for India. Companies exploring opportunities for business expansion internationally benefit from it the most. Goldman Sachs, J.P Morgan, and Morgan Stanley are some leading international investors.   Some businesses seek opportunities to capitalize on relatively economic labor and production costs. Likewise, Indian companies seek relaxation from a tax perspective internationally.   There is a lot to know & understand about investments. The blog discusses nearly every nut and bolt of foreign investments.   If you are an active or ambitious investor seeking opportunities to invest in foreign stocks, this blog is worth a read. Let’s begin with the first things first.  What does foreign investment imply?   Foreign investment implies an investment of a native business or a company in the assets of an international company. It generally includes long-term physical investments made by an Indian company in a foreign company, listed on the stock exchange.   Foreign investment is of two types: Direct and Indirect. It involves cash flow transactions between countries. If the investor's stake is higher in a company, he shares the right to regulate the company’s decisions. These are long-term physical investments like - bridges, damn, and infrastructure in foreign countries.    For example, if a person or a business holds (a 75%) share in the company, they share the larger portion of the company’s equities available in the market. They can regulate and dominate the company’s decisions.   So, are you now clear about – What is the foreign investment?   Let’s move on to the most asked query under this.  What are the most popular types of overseas investment opportunities?  Foreign investments have two main categories- direct and indirect investments.  Direct Investments   Foreign direct investments are the equipment, plant, or factory an investor purchases in a foreign country.  Indirect Investments   Indirect investments imply purchasing stocks and equities of foreign companies listed in their respective countries.   Direct investments are much in demand than indirect investments owing to the long-term benefit prospect. The value of these tangible assets multiplies more than liquid assets. These boost the country’s economic status over time.  In contrast, indirect investments are short-lived. These are time-sensitive investments that do not share any future scope or value.    Given this, who can legally invest in these assets? Let’s find out.  source: pixabay Who is eligible for foreign investment?   Most individuals are anxiously googling-   “What is foreign investment?”  “How does the foreign investment work?”  There is so much to explore on the topic. But before that, one should be knowledgeable about the eligibility criteria to invest internationally.   If you are considering an overseas investment, check whether you meet the below criteria set by RBI (Reserve Bank of India):  Residents, corporate entities, and partnership companies registered under the Indian Partnership Act of 1932 are eligible for foreign investments.   These individuals can invest in foreign ventures or wholly owned subsidies.   Residents may invest according to Q3 of the law.  How can residents invest in foreign companies or ventures?   Residents can invest in foreign investments without any restrictions or limits. The companies they tend to invest in must have a 10% share in an Indian company listed on a stock exchange in India. It should be listed as of 1st January as the investment year.   How are foreign investments beneficial for the Indian economy?   FDI occurs when an individual or a company holds 10% dominance in a foreign asset or company. If an individual or business owns less than that, IMF deems it as a part of the stock portfolio. It might not grant complete control over the company’s politics but a percentage to investors.   Foreign direct investment grants power and dominance to influence the foreign firm’s operations. Foreign investment can prove beneficial for the existing economy.   1. Funding and expertise   Developing nations require the apt tangent and growth momentum to utilize their potential. Corporates operating in these countries need the expertise, guidance, and funding to expand business operations. Here Foreign investment proves profitable in upscaling a brand and nurturing its prospects.   As per research, “Global FDI collapsed in 2020 and plummeted from $1.5 trillion in 2019 to $859 billion”. It is the lowest ever recorded since 2008.  However, as per recent stats by Hindustan Times, “ The FDI inflow has increased by 23% after COVID blues. March 2020-2022 recorded an inflow of $171.84 billion inflow.”  It stands in steep contrast to $141.10 billion between February 2018-2020.  Thus, investments in the country can prove a breakthrough in economic terms.   2. Increases employment opportunities    What follows with growth is personal development.   India is facing the harshest blow post-COVID-19, she needs a comeback. With businesses shutting down, the country is losing momentum. FDI can breathe in the needed inspiration.   However, India can prosper independently, but a mere international push can open up a wide growth arena for the country and its people. FDI help create employment opportunities, especially in the manufacturing industry. It not only boosts the economy but makes its people independent.  3. Access to leading-edge tools and technology  To compete in the international market and gain an edge, India must optimize its economic structure. Foreign investment is one of the panaceas that share the potential to rationalize it.    It can promote access to advanced tools and technology that help streamline a business process and economic growth.  These are some popular growth opportunities that foreign investment can provide.  Which country topped the FDI index of India in 2022?   Singapore topped the FDI index with a share of 27%. It is followed by big giants US (18%) and Mauritius (16%) respectively.   What does FDI cover for India in the future?   As per Business Standard, “India recorded the highest ever annual FDI of $83.57 billion in the year 2021-22.” It reveals a progressive India in the coming years.   Furthermore, the “FDI to GDP ratio may rise by 2025.” The recent shift in FDI structure and the “Atmanirbhar Bharat” policy provoked the estimation.   Conclusion  It is evident from the listed facts and figures that foreign investment can ensure a profitable shift in the Indian economy.   If you are still confused regarding “What is the foreign investment?”, detailed research and analysis will help you gauge the importance of FDI from the Indian perspective. Consult an expert advisor to get the right plan for you   TALK TO AN EXPERT

What is Geographical diversification, and why is it important?  Diversification is assigning money to a diverse range of investments to minimize risk. It's akin to not placing eggs in one basket in terms of money.   Purchasing securities from numerous locations is called geographical diversification. Like many advisors may have advised you against keeping all your money in one stock, similarly, you don’t want all your money in one single country or region. Relying on one single means that the stock's failure would be devastating to your portfolio.  Geographic diversification, like general diversification, is based on the idea that stock markets in different regions aren't always highly associated.   For example, suppose the stock markets in advanced economies are decreasing due to a recession. In that case, an investor may transfer a portion of his or her holdings to emerging economies with greater growth rates, like China, Brazil, India, Russia, and others. This strategy restores balance to your portfolio.  source: pixabay The pros and cons of global diversification  Expanding a portfolio across several geographic locations can help investors adjust for the fluctuations of a particular financial region, lowering risk over time compared to less diversified portfolios.   Investing in international markets has never been easier, thanks to exchanging traded funds and mutual funds.  Diversifying away from advanced economies has its compensations. Many enterprises in sophisticated markets offer comparable products and services, resulting in fierce competition. On the other hand, developing markets may be less competitive and hence have more room for expansion.  The refute is that the whole world's marketplace is already interconnected, so dispersing your money across different areas no longer provides the same level of diversification.   Compared to industrialized countries, faster-growing economies may face higher political risk, currency fluctuations, and general market risk.  Exchange rates, for instance, are always changing and can work against you. If the rupee declines, an investment in India, for example, could lose value in dollar terms (This means it takes more rupee to buy a dollar).   On the other hand, investing in different currencies is another strategy to diversify and reduce risk.  Over the previous ten years, India's share market has generated remarkable gains. It is one of the world's fastest-growing stock markets, outpacing even the S&P 500. For instance, from August 08’ to August 18, S&P 500 Index increased by 142%, whereas the BSE SENSEX climbed by 188%.  Despite greater return, the SENSEX shows high volatility. Volatility means how risky a particular investment is for the average investor. The risky the investment is, the greater the volatility and the more price movements there are.   The standard deviation of the return is one measure of volatility. Compared to the S&P 500, the SENSEX has more spells of higher volatility.  Minimizing volatility when designing a portfolio can result in a more profitable portfolio. This is the basic argument of the Modern Portfolio Theory, which states that an investor should opt to maximize return for a given level of risk rather than taking a greater risk than would not provide additional gains.  In general, geographical diversification promotes more stable investment returns while lowering the depth and duration of your portfolio's drawdowns compared to other regional markets.   Given the current state of world geopolitics, which could lead to more diverse outcomes in country investment returns and relatively close to nil interest rates globally, resulting in lower asset yields in the future, geographical diversification is important.   In fact, geographical diversification of your investment portfolio may be the best chance of successfully conserving and growing your wealth for the future. Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

Exchange-Traded Funds and stocks have some similarities and differences. ETFs are traded like stocks on the exchange but are not quite similar to stocks. Thus, understanding spreads and volumes becomes a top priority for us.  Understanding spreads  Spread, often called the bid/ask spread, is the most fundamental thing to know while operating in the stock market.   Stock markets can be seen as 'meeting sites' for investors, with each investor looking to get the most out of a transaction. At any given time in the market, there are two prices: the sale price, i.e., 'ask,' and the other to buy, i.e., 'bid.'    Buyers of ETFs aim to pay a fair price and, if possible, a discount on the market price of the core securities in the ETF, while sellers want to get the highest price for their units when they sell on the exchange.   In an open market, traders try to broker the best deal possible. This is the reason why spreads exist. A transaction occurs when both parties agree on a price and exchange ETF units.   Let's understand with an example if a trader wants to sell some ABC corporation shares in the open market and some traders want to buy the same ABC corporation shares.  The price is $25.75, whereas the bid is only $25. Thus, the absolute difference in these prices is the spread. Here the spread is $0.75. The prices should converge at some point for the trade to get executed.   If a trader wants to purchase at the moment, he has to pay the asking price, in this case, $25.75.   Trade cost increases if the spread is wide. The bid/ask price plays a pivotal role in ETF pricing as these are traded in the same fashion as our ABC corporation stock.   Bid/ask spreads are generally tighter when an ETF is hot and trades in large volumes. However, larger spreads may result if the ETF is sparsely traded or the fund's underlying securities are highly illiquid. Overall, the smaller the cost of trading, the tighter the bid/ask spread.  Although the bid and ask prices of an ETF will roughly resemble the value of the securities held by the ETF, bid-ask spreads might vary based on a variety of circumstances, including  Spreads on underlying assets: The underlying asset class's liquidity determines the ETF's liquidity. As a result, if the underlying equities are very liquid, it implies that the ETF will be similarly liquid, with a minimal spread.  Cost of accumulating securities and trading the ETF: The cost of putting together and trading the ETF's basket of securities may impact the spread. For example, there will be additional charges to convert local currency to the underlying currencies if the ETF invests in overseas securities. Another scenario could be regulatory charges and taxes for overseas assets in compliance with local trading regulations.  Trading volumes: We will understand this in detail below.  Involved market risks: During higher market risk or volatility periods, bid-ask spreads can also inflate.  Understanding volume and market impact  The bid/ask spread is not the only factor to be cautious about while buying ETFs. Trading volumes also play a major role in determining the ETF's spread and overall liquidity.   The quantity of shares traded on any particular day is called volume. It is preferable to have a bigger volume. If ABC Corporation trades 20 million shares daily on average, it will be better to trade than if some corporation only trades 500 units daily.   However, keep in mind that spreads on both may be tight, leading investors to believe that both assets are similarly liquid. Thus, treading cautiously is the key.  The number of stocks offered on the "bid" or "ask" is usually small, say ten shares, sometimes more, but seldom a large number like say 50000; if such is the case, then the ask itself will drive up the bid.   Logically, the more the demand, the more the price! This very phenomenon is called market impact.  Since ETFs are similar to stocks, they are affected by volume and spreads. However, the market impact on an ETF is minimal due to the very nature of the ETF.   If there is a great demand, then the AP can create more ETF shares with the help of underlying securities to cool off demand and the rising market price compared to the underlying NAV. Thus, an ETF is not affected by market impact with the severity of a stock. Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

Parenting is one of the most difficult jobs in the world. Gone are the days when parents couldn’t think beyond traditional career paths. Today, a kid has dreams of becoming an astronaut, content creator, or musician.   These goals keep evolving when your child becomes a teenager. As a parent, you should plan for your kid’s educational expenses. Considering their ever-evolving aspirations and rising costs of education, it is crucial to ensure that your child opts for the right career.   You can’t afford to plan your child’s education the same way your parents did. This is because society and the economy change from time to time. Parents spending on a single child’s higher education has gone up from INR 35000 in 2010 to INR 95000 in 2022. Note that education planning can change your child’s life. Ways in which proper education planning will provide your child with a rewarding career 1. Allows you to fulfill your child’s dream   It is imperative to save for your child’s education. In the future, the cost of education will be higher. There is no need to worry about your child’s studies if you have an education plan in place. An education plan offers your kid financial flexibility. They can choose from various courses based on their preferences and skills.   2. Tackle unforeseen circumstances with ease   You will be able to tackle unforeseen challenges with ease when you plan your child’s education. Education planning policies usually offer higher education expenses along with college fees in case of unforeseen situations. For instance, if any of the parents die, proper education planning will help your child to pursue their dreams.   3. Helps secure your child’s future  While you’ll always be there for your child, it is crucial to meet the financial objectives. With the rising cost of education, it is imperative to plan at the earliest. Moreover, in case of mishaps, your family may struggle to fulfill your child’s academic objectives. Nowadays, education plans for your child come with goal protection features.   4. Leverage the power of compounding   Education planning will make you familiar with a myriad of saving methods. When you start investing in your child’s education plan, you will leverage the power of compounding. You can keep a lumpsum amount of money secured for your child’s education in the future. Moreover, these funds will be easily accessible to your child when they want to pursue their dreams.     5. Allows you to plan other expenses   With an education plan, you’ll have a smooth financial path. In other words, you don’t have to sacrifice the goals of your child for the sake of other purposes. Furthermore, if you don’t plan for your children’s education costs separately, you may have to use other essential funds reserved for retirement. Lead a stress-free life by planning for your child’s education.  Source: pixabay 6. Allows you to tackle inflation  Education inflation is a rising concern for modern-day parents. By properly planning for your child’s education, you can tackle inflation. It is essential to save and let your money grow to fight the rising cost of education.   By planning for your child’s education, you can effectively guard your savings. For instance, when the time comes to pay for your child’s education or buy course-related materials, you don’t have to pay from your savings.   7. Get access to withdraw money partially   With a child education plan, you can withdraw money partially. There are many child education policies that will let you withdraw money to pay for your kid’s education. For instance, if your child wants to attend acting classes or guitar lessons, you can withdraw money to pay for these expenses.   8. Allows your child to develop good financial habits   One of the key highlights of an education plan is that it develops good financial habits in your child. You can simplify and structure your kid’s individual financial objectives. Having an education plan for your child serves various purposes. For instance, it allows you to save properly. On the other hand, it lets your child know how to prioritize their expenses properly. They can value your contribution to their life effectively when you have a child education plan in place.   9. Direct your child in the right direction with education planning   With proper education planning, your child can opt for the right stream. You can let your children decide what they want to study or become in their life. The right education plan can direct your child in the right way.    Education planning is a crucial aspect of your child’s life. With proper planning for your child’s education, you can align your income and expenses properly with your child’s educational aspirations. So, choose the right education plan to support your child’s career. Consult an expert advisor to get the right plan TALK TO AN EXPERT

“ETF trading at a premium?” or "What's the deal with ETF B selling at a loss?" Y. These are some questions you are likely to hear whenever advisors talk about ETFs. You can understand this better if you understand the different costs of ETF transactions.  ETFs have multiple "prices," as perplexing as they may appear. There's the actual value, determined by the net asset value (NAV) after each day and the intraday NAV (iNAV) in the midst.   The NAV of bond ETFs is set by the bid prices of the portfolio's underlying bonds. The NAV of an equity ETF is given by the most recent trading prices of the underlying stocks. The NAV is calculated based on the previous trading day's closing.  However, since ETFs are actively traded on a stock exchange, they have a current market price which may differ from their actual value. This market price will determine the premiums and discounts.   The ETF's latest traded price determines the market price of both equities and bond ETFs. For a stock ETF, that price will often fall within the bid-ask spread of the underlying basket of securities, but bond ETFs would more likely trade at a premium because the NAV is set at the lesser bid price.  If the price of an ETF is higher than its determined NAV, it trades at a "premium." In contrast, if the ETF's price is below its NAV, it trades at a "discount."  ETF prices and NAV are often closed in relatively calm markets. When stock markets become choppy, however, ETFs respond swiftly to shifts in market sentiment, whereas NAV may take longer to adjust, leading to premiums and discounts.  Let's look at it illustratively,   The market price of an equity ETF will often fluctuate within the basket's bid-ask spread. When the ETF's supply and demand are roughly balanced, trading takes place on the secondary market.   The ETF's market price may be momentarily pushed outside the limitations of the fundamental basket when there are more buyers and sellers in the market. Traders might profit from the gap between the ETF's market rate and the prices of the underlying securities if the ETF trades at a significant premium or discount.  When this occurs, the market maker can go to the primary market to deal with the ETF sponsor, issuing new ETF units when prices increase and redeeming ETF units when supply is low.   The primary market aids in re-aligning the ETF market price with the NAV. However, because the expenses are determined by the creation/redemption process, the ETF would often trade at a higher premium or discount to mirror those costs until the two-way order flow in the ETF recovers.  Since the ETF and its fundamental securities are two separate liquidity pools that are only loosely connected, this can happen at any time during the trading day.   Suppose bullish investors start bidding up an ETF more aggressively than its underlying securities. In that case, the ETF's price may climb faster than the underlying securities' price and, as a result, trade at a premium.   Similarly, if bearish investors sell an ETF aggressively, it may trade at a discount to its underlying stocks. Alternatively, premiums or discounts may develop if the ETF and its constituent stocks trade on exchanges in separate time zones.  Pricing transparency is offered through ETFs, which allow you to acquire the intraday price of any asset type. The problem is that the trade costs are explicit unlike mutual funds, they are not reduced to a single number by the end of the trading day.  It's critical to keep trading expenses in mind, especially in less liquid markets, and to resist following the herd, which can lead to acquiring at a markup and selling at a discount.   Despite their "designed for speed" nature, ETFs are still the best choice for long-term exposure to specific asset classes. Consult an expert advisor to get the right plan for you  TALK TO AN EXPERT

Previously we discussed 5 things to consider before sending your child abroad for education. In this article, we will discuss how to plan your child's bachelors in Australia. Are you planning your child's bachelor's in Australia? Why wouldn’t you? Australia's excellent educational system, laid-back nature, with high living standards make it a perfect choice for parents and students alike. How prospective is Australia in pursuing a bachelor's education?  The unique opportunities of studying bachelor's in Australia extend beyond the classroom program. It is about getting an excellent culture for study and work. There are great placement opportunities with average to good salary packages. There is also the flexibility of part or full-time study programs.   Given the job opportunities and thriving conditions in sectors like finance, tourism, education, agriculture, and construction in Australia, students have ample options to choose from for jobs.    The post-pandemic reforms introduced by the Australian government like extending student work hours, offering students to return to Australia to find work on their work permits as well as increasing the tenure of post-work visa has made Australia can an excellent place to not only study but to build a career.   Let's look at some prominent reasons to choose Australia for undergraduate studies. University offers academic excellence   Australia has some of the best universities, offering top education systems for international students. The quality of education and commitment of faculty is evident in the international ranking that the universities get.     Internships and placements are advantageous   Most study programs in Australia offer internships or placement opportunities. With unique options, students get a chance to have better experiences and discover advanced jobs or career opportunities. It gives way for better understanding skills and improves communication in aspirants.   The study program with scop for an internship is beneficial as it gives students a work experience with practical experience. From this, students get an understanding of work-life culture. They can learn how to implement their study of course program into the practical field. Therefore, the internships are golden scopes for students to acquire knowledge, apply it in-field, and eventually hone their skills.   That being said, choosing a bachelor's program that offers either internship or good placement opportunities for students is better. Discover a welcoming university life   Australia is the right place to provide adequate support to international students. Be it about getting a job, finding accommodation, networking, and others, it has plenty of options.   Therefore, Australia has a welcoming environment for international students, helping them adjust to the new education system. In addition, it helps students organize and get accommodation easily.   The universities focus on a problem-based learning approach, help students become independent learners. The class patterns are flexible, and the study approach makes it easy for the students to cope with the educational system.   source: pixabay What is the cost of living in Australia?  Before packing your child’s bags, make sure you are aware of the study program packages in Australia and the cost of living. Top-class education isn’t cheap and so check its scholarship options available for international students. There are eligibility criteria to avail of scholarships, and one should check them before applying.   Tuition fees   The Australian universities’ tuition fees are among the highest in the world. For a bachelor’s degree, it is 20000 and 45000 AUD yearly. The private ones are more costly and may not offer scholarship benefits.   Accommodation fees   The on-campus accommodation is affordable, which starts at around 440 AUD monthly than any other accommodation in Australia. Rent of a place may take around 1300 AUD to 1750 AUD. Even the monthly grocery costs are around 300 to 600 AUD. So, the overall living costs are approximately 1200 AUD monthly in some cities, which can rise to 1500 AUD in other cities.   Plan your expenses, and make sure you have some money left for monthly savings. When planning to send your child for a bachelor’s in Australia, it is important to have this in mind.   How do financially plan for your child’s bachelor's?  Whether you pick Australia or any other country for your child’s bachelor's, you need to start saving. The average cost of education is rising at an unprecedented rate and the only way to meet this cost is to start saving aggressively!   Today, the yearly expense to support your child in Australia can be anywhere between Rs. 10-20 lakhs. This cost greatly varies based on your child’s needs and lifestyle, however, it’s important to remember that your child may have to pay double this amount when it’s their time to study in the country due to education inflation.   So, calculate in advance how much you need to send your child to Australia, create a financial plan with the help of an expert and start saving via SIPs to ensure you have the funds you need when it’s time to send your child to the land of opportunity!  Consult an expert advisor to get the right plan TALK TO AN EXPERT

Education is the most valuable investment. This is why millions of Indian parents aspire to send their children abroad for foreign education. Countries like the United States and the United Kingdom offer academic excellence and better infrastructure. But with the increase in tuition costs, sending your child abroad is tougher. Here are 5 ways to financially prepare yourself to send your child abroad.   Start early with long-term financial goals   The first rule of saving is to start early. Examine your spending habits and eliminate unnecessary costs. Set aside a certain amount of funds on a monthly basis for your child's education. Saving and making investments early in life increases your chances of reducing your ability to procure loans and minimizing the effect on future cash flows.  1. Estimate present and future cost  When calculating and budgeting, it is recommended to anticipate the rising prices. The more funds you save now, you are in a better the position to use them for your future needs. This gloomy outlook will ultimately allow you to improve your probability of establishing a prospective foundation that outweighs actual expenditures.  2. Consider inflation and currency exchange  While planning to send children overseas for higher studies, it is required to consider the country's inflation rate as well as the currency's potential depreciation fluctuations. Investigations and knowledge of historical inflation and depreciation trends will help calculate the additional amount required to manage education overseas. For instance, the falling rupee has directly affected the budgets of hundreds of Indians studying in the USA today and increased their cost of living and parents who wish to send their children in the future.   3. Find the best investment opportunities  Investigate medium- and long-term investment possibilities in which you may begin investing as soon as feasible. Determine your risk tolerance and investing capacity, and then invest accordingly. A well-diversified technique with an optimistic approach will allow you to develop a progressive investing strategy.  4. Speak with an investment advisor  Don’t shy away from consulting with an expert, if you are concerned and underequipped with your framework agreement. Investment advisers and foreign education professionals can assist you in analyzing your possibilities and establishing a more comprehensive and attainable approach.  source: pixabay What makes foreign education more expensive?  Without a doubt, the expense of studying overseas is more than the cost of education in India. The amount varies depending on the university, country, course, and length of the program. As a result, it is critical to choose universities that are within your financial means. The currency exchange rate and higher cost of living make foreign education expensive. Let’s look at more factors contributing to this cost!   1. Tuition Fees  Tuition fees are the largest mandatory expense. Depending on the course and location of study, it can vary. Master's degrees are more expensive per year than bachelor's programs.   Courses like Criminal Justice, Philosophy, English, and Mathematics are considered the most affordable subjects in terms of tuition fees. Courses like Health Sciences, Physical sciences, Business & Nursing are considered the most expensive subjects in terms of tuition fees.   Tuition fees may be standardized or depend on the selected course. The report of probable tuition fees across the world's favorite destinations is as follows. 2. Academic Supplies  Another expense to prepare for is Academic resources, which range from textbooks and stationery items to computers and art tools. The report on average educational supplies costs worldwide are as follows: 3. Rent and Utilities  Accommodation is usually the second-largest expenditure for overseas students after tuition. Students can rent accommodation in small towns closer to their universities to save on costs. The report on monthly rent cost country-wise is as follows: 4. Shopping and groceries  To cut down on costs, students can buy products that are at maximum discounts. Rather than purchasing big brands, students can buy cheaper brands that are more valuable. Students can plan to cook in batches and freeze the cooked meal for consumption. The report on country-wise monthly grocery costs is as follows: There are various other costs associated with being educated abroad. These costs include visa costs, insurance, and university commuting expenses. To manage all these examples, one must be financially prepared before sending your child for education abroad.   Higher education abroad is an enriching journey with several advantages; it can be affordable if you start saving consistently. These 5 ways can help you financially prepare yourself to send your child abroad and help them achieve their dreams stress-free! Consult an expert advisor to get the right plan for you  TALK TO AN EXPERT

In the previous article, we discussed can we really do MBA in the UK for under Rs 25 lakhs. In this article, we will talk about how much to save for MBA in the USA for your child. The USA is the number destination for MBA but this course comes at a high price! Most MBA universities charge thousands of dollars in tuition fees and on top of that, there is the cost of living but there are many ways to reduce these costs. From scholarships to fee waivers to exploring savings opportunities, here is how much to save for your child’s MBA in the USA!   What is the cost of applying to study in the USA?  Before you start putting together the list of things your child will need for the overseas trip, here are a few things for you to consider. Prior to applying for admissions to any of the universities in the USA, these are the expenses you must allow for:   CategoryAverage Amount (in INR) USA Visa Application0.12 lakhsSEVIS Fee0.27 lakhsTOEFL Exam Fee0.13 lakhsIELTS Exam Fee0.15 lakhsGMAT0.19 lakhsGRE0.16 lakhsAirfare0.45 lakhs to 0.85 lakhs  Add to this the cost of coaching and counseling required to crack the above-mentioned exams with good scores to enable you to get into the university of your choice. Planning for your MBA studies overseas must start at least a year and a half in advance. Check the intake period of the various institutes and ensure the applications and paperwork submission is aligned to the same.  MBA fees in the USA  Once you have initiated the necessary exams and eligibility procedures, the search for the university that fits into your budget begins. MBA courses in the USA range from one year full-time to 2-3 years part-time or online programs. The average fee for an MBA course from a reputed university typically costs around USD 60,000 and can go up to USD 100,000 for the Ivy Leagues.   This translates into Rs. 45 lakhs to Rs. 75 lakhs in terms of tuition fees. Further depending on the university, the location, and the individual lifestyle of the student, the annual expenses can range from Rs. 13 lakhs to Rs. 40 lakhs.   As you can see, if you are looking to send your child to the USA to pursue MBA, you will need to cough up approximately Rs. 1 crore for the entire duration of the stay. This can be backed up by part-time jobs, campus jobs and of course, scholarships offered by the universities, by the US government for international students, and also independent scholarships offered to Indian students.   source: pixabay How to create a financial plan for MBA in the USA for your child?  In light of the corpus required to do the MBA in the USA, planning your funds well in advance will help your child pursue this dream with ease. Here are a few tips that can help you get started early as you make the plans for your child’s MBA studies in the US:  1. Start a college fund as soon as you decide on this goal: ideally having a 10-15 year investment duration is great. If you don’t have this time, start immediately as the corpus you will need is substantial.   2. Depending on the time horizon of your investment, here is how you will need to invest:  Long-term (10 – 15 years duration): High risk and high return investment in equities  Mid-term (7 – 10 years duration): Balanced investment portfolio with 65% in high risk, rest in debt instruments   Short term (3 – 7 years duration): Low risk, secure, low returns investment in debt instruments. The key is to keep your capital safe and your investments high. You can develop a more refined approach to investing with the help of professionals who understand your financial situation as well as your financial goals.  3. Follow a disciplined approach to your savings and investments.   4. Take the benefit of compounding growth of investment when you start early and do not dip into the college fund. Protect this fund as the dates for admissions are fixed and falling short of the required amounts will mean you may have to compromise on the institute/course that the child is opting for.   5. Regularly monitor your investments and realign these to ensure the corpus is building up towards your target amount.   6. Keep a watch on the universities that you plan to apply to, and watch the changes in their international student policies and fees.   7. Start your research early for the scholarships available, tracking eligibility and ensuring your child achieves the academic scores needed to apply for these, should the need arise.   Sending your child to the US for higher studies is a serious and long-term project. Start early and stay on top of the funds. This will make the entire experience of overseas travel and study a truly enjoyable one for your child and your family! Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

Individuals' interest in index funds is increasing due to an overarching desire to compound and capitalize on wealth.   Amid constant volatility in markets, it has become imperative to explore investment ways that dilute any potential risks of losing on high-return investments.  This is why people are incredibly inclined toward building different buckets instead of leaving all eggs in a single basket. In investment terms, diversifying the portfolio by investing in different equities and sectors is one of the best techniques to evade market risks.  It is where investment in index funds emerges as a market dominator in the current Indian scenario.   What are Index funds?  Index funds work differently from active funds. These funds are appropriate for those wishing to evade risk and diversify investment. One can only manage the investments passively.   It implies that a person cannot invest directly in an index but through mutual funds called “Index Funds.” A manager or investor invests in the same equities as present in the index.  The market index leverages a company’s market capitalization to determine the total weightage of securities in the index. The total value of the company shares is equivalent to the number of outstanding shares.  As per Economic Times, “since February 2020, the number of index funds has surged 144% and the assets managed by these investors grew by 590%”.   As a part of the ongoing research by Economic Times, “The number of index funds grew from 32 in February to 78 in July 2020”. ETF draws the investor’s interest during the phase.  https://www.youtube.com/shorts/FlrxZAJjemE Who should invest in index funds?   Investments in index funds are profitable only for a selective bunch. If you meet the below investment behavior, index funds are just right for you:  You wish to evade any risks associated with investment/slash investment risks  You want to diversify your portfolio by starting and investing a low amount  You prefer to invest only a fixed amount in a particular index fund  You would like to invest in multiple investment forms – like real estate, gold, equities  How to invest in index funds?   Index Funds are a type of investment vehicles like mutual funds and exchange-traded funds that help achieve results on specific indexes. Here is how you can invest in index funds:   1. Figure out your investment goals  Before investing, it is important to ensure clarity over the present and future financial goals.   When do you want to retire?   How long till you achieve your financial goals?   What do your risk appetite and budget look like?   2. Pick one index to invest in  Index Funds, apart from helping diversify the investment, track broad sectors like large capitals and emerging markets. Different index types serve different purposes.   While deciding on the index to invest in, analyze the below parameter:   Which industry do you share knowledge in and is growing lately?   How much is your risk tolerance?   What are the company size and market capitalization?  What index fund would you find comfortable investing in (stocks, bonds, or commodities)?   Highlighting and improvising on these parameters will help you choose the right index fund. It will help build a growth foundation.   3. Decide the index funds to invest in  Each fund and company has different marketing capital, growth potential, and shares available to invest in. The best research method is by researching Asset Under Management (AUM). It is the total investment value that an expert manages on the client's behalf. Analyze the AUM index of a given fund and the ease of trading.  Here are some best index funds for 2022:  IDBI Nifty Junior Index Fund Growth  ICICI Prudential Nifty 50 Index Plan Direct-Growth  UTI Nifty Next 50 index Fund Direct-Growth  As per ClearTax - “ IDBI Nifty Junior Index Fund Direct Plan-Growth, is one of the most profitable index funds in India."  Index funds companies can vary in their short and long-term costs.  4. Sign up for a brokerage account   After signing up for a brokerage account, utilize the above points to figure out the best index funds to invest in. Here, an investment expert may help you meet the purpose according to your financial goals.   In the initial stage, having an expert backing works well. An expert can help you develop an investment strategy that aligns with personalized financial goals. It makes investment in index funds a smooth journey.   5. Manage investments cautiously   It is important to manage and check potential opportunities for growth. Start with small investments and set up automatic monthly deductions. Monitor the fluctuations and returns throughout the year. Modify the strategy if the market demands.  While Index funds are a great way to start investing, it's good to remember no market is without risks. Consult an expert advisor to get the right plan for you  TALK TO AN EXPERT

Did you know that more than 62% of Indian parents want their children to study abroad, out of which 44% want their children to learn in the USA? Studying abroad is a stepping stone to success and a better lifestyle but there are certain factors you need to consider before sending your child abroad.  Here is a parent’s checklist to send a child abroad to make life simpler  1. Understand your child’s career goals!  Knowing what your child wants to study and where they want to pursue their dream career can help you plan wisely. Talk to your children, and try and understand what courses they are interested in. If your child is confused, you can always approach an education counselor. Research the course they want to take and try to understand its scope in the market.    2. Choose the right education system  Choosing a proper education system holds paramount importance for your child’s career. When the education system is relevant enough, it gets easier to understand the career prospects of the respective course. Choose a country whose education system aligns with your child’s needs and requirements. For instance, the best country for STEM courses is the USA, and if your child is interested in pursuing this path and saving for higher education in the USA can help fast-track their careers! Thus, conduct proper research to consider ROI, curriculum, research, facilities, etc.   3. Career counseling helps If you find planning and strategizing your child’s education challenging, you can refer to a career counselor for expert advice. For instance, if you and your child are confused about which is the better country or university for studying psychology, you can approach a career counselor who can guide you better.   4. Shortlist the countries and universities   If you know your child has an interest in studying finance, then it's time to shortlist the best countries and universities that have the infrastructure to build a good career. This step helps you understand the cost involved, and the future career pathway as well as gives you the chance to study indices like lifestyle, cost of living, job opportunities, etc.  source: pixabay 5. Future fees and accommodation cost  Tuition fees and accommodation are the two biggest and recurring expenses. It’s important to budget well and save for these expenses. Tuition fees can be very costly, your child can save up on them by applying for scholarships, getting grants, or fellowships. In terms of accommodation, it’s cheaper to live on campus than in off-campus facilities. It also saves money to share your living space than renting it alone. Your budget should also include food, travel, health coverage, etc.  Miscellaneous expenditures can dismantle your financial planning, so keep some extra money.  6. Consider the cost of entrance exams  Once you have chosen the correct country and institution, read and understand the entrance pathway. Certain universities require students to sit for entrance exams like IELTS, GMAT, TOEFL, GRE, etc. Make sure your child prepares in advance for it. There are application fees for giving these exams that can be expensive so keep the cost in mind while creating a plan of action.  7. Build a plan of action  Once you know where you want to send your child to study, it’s time to start planning for the expense! Get to know the details of the countries and the best institutions. From the application fees of every university to the cost of entrance exams, tuition fees, accommodation to visa costs, and flights, there is a list of expenses that you need to take into account before your child even leaves for their university.    8. Visa process  Visa is the last step in the admission process! Once your child has her/his acceptance letter that’s when the visa process begins. Student visa application can be hefty so it’s important to consider the cost and prepare for it in advance. To apply for a visa, your child must own a passport valid for at least six months from the date of application. You must visit the office with your documents, passport-size pictures, and a duly filled form.   9. Consider their safety  Safety is yet another significant concern of all parents. From finding them safe and secure accommodations to giving them an emergency fund. As parents, your desire to ensure your child’s welfare is your priority.   10. Prepare your child financially  It is a tough emotional decision to send your child abroad. You might not get to meet your child for quite some time and cannot guide them constantly. Your child will be responsible for a host of chores like paying bills, managing their houses, cooking, and budgeting. This is your chance to teach your child money management, how to budget their expenses and spend well rather than carelessly. Having a conversation about money management and budgeting is extremely important and can help your child build healthy financial habits.  There are a host of activities you need to consider before sending your child abroad. At the center of them, all is finance. Budget your finances well so that your child can have the best opportunities to kickstart their careers!  Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

‘Har Rishta Bola, Mere Naam Ki Coca-Cola' - is one of the most successful marketing strategies and ads India has ever seen. Every Indian has had Coca-Cola in his life and gone back for more!   This MNC has been present worldwide and has been doing great business since its inception and launch on 29th January 1892. The Coca-Cola Company (KO) is the most valuable soft drink brand in the world, with worldwide revenues touching 38.66 billion US dollars!  Coca-Cola is also available in nearly every country on the earth. Primarily due to its broad and comprehensive distribution system that ensures that the company's products reach their end customers quickly and efficiently.   It is also a brand with a high level of worldwide brand awareness. Customers worldwide trust the company and are more likely to choose it over its competitors like Pepsi, Keurig Dr. Pepper, or Red Bull. A highly successful marketing campaign has bolstered Coca-Cola.  While Coca-Cola continues to be the most common choice, the company also owns other well-known products and brands such as Sprite, Fanta, and Minute Maid which have been a huge success in the Indian subcontinent.   The company has experimented with minimal sugar and nil sugar products like Coke-Zero, and created beverages like iced teas and flavored water, in response to the rising demand for healthier beverages.  The Coca-Cola Company's shares (KO) are available for investment on the New York Stock Exchange, with all values in US dollars. Let's first look at some basic stuff associated with the company.  source: pixabay Latest market close$62.5752-week range50.17 - 63.02Dividend yield 2.81%Earnings per share$2.25Beta0.66Market Capitalization$ 272 billionAverage Volume (3m)19,665,333PE ratio 27.75 There are three ways in which you can invest in Coca-Cola from India  1. The direct way  You can trade in Coca-Cola from India by registering on a US brokerage account using apps that offer US stocks or foreign investment opportunities. You can either invest directly through its apps through a minimal brokerage or zero brokerage. All you need is a bank account, your Aadhar card/proof of address and your PAN card to get started.    2. The ETF way  Investing via ETFs in Coca-Cola is another way to invest in the company from India. ETF stands for Exchange-traded fund. It is a group of stocks and bonds compiled by ETF managers to help you invest more efficiently.    ETFs are similar to Mutual Funds and they are managed differently. ETFs are traded on a stock exchange like stocks and are a more efficient way to buy shares of big companies and an affordable way to enter a highly competitive market.   Some ETFs like Consumer Staples Select Sector SPDR Fund ETF, which contains Coca-Cola as one of its top holdings. The ETF's holdings include food & essentials, retail, household items, food products, and other industries. You can easily invest in these through different investment platforms from the comfort of your home with no physical paperwork.    Another option for investing in Coca-Cola through investing in S&P 500. For instance, Coca-Cola is a part of the Motilal Oswal S&P 500 Index Fund; by investing in this fund, you can be a shareholder of Coca-Cola!  An exciting fact is that in order to invest in the above ETFs, you don’t need to create a US account! However, if you are planning on investing in MNCs, there are some benefits of creating a USA brokerage account so that you can track errors that directly affect your returns.   3. The Mutual Fund way  Mutual Fund is the third way to invest in Coca-Cola from India! There are various mutual funds that invest in a large set of companies. You can choose the kind you wish to profit from. There are no caps on investment in Indian rupees, there is no investment restriction.   Coca-Cola is included in several mutual funds, such as the ICICI Prudential US Bluechip Equity Fund but the exposure to this company is largely limited and the expense ratio can affect your returns.  The expense ratio is problematic because investors have to pay an additional expense charged by core global schemes in addition to the administration fee charged by Indian fund houses.      These are some ways to invest in Coca-Cola from India! The company is a global mammoth and being an investor with them comes with its own highs and lows. So, before you start investing your money, understand the risks involved before jumping the gun. Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

Previously we discussed can you really do an MBA in the UK for under 25 lakhs? Before you ask your friends and family whether your child can study for an MBA in Canada for under Rs 40 lakhs, you must first understand the different kinds of costs involved from the application process to flying your child to his/her dream university.   What is the average cost of studying in Canada?  This query is a fairly common and reasonable query many parents harbor: What is the cost of studying in Canada? While the cost varies based on your university, province, course as well as lifestyle, the average cost of studying is around CAD 20,000 to CAD 30,000! This cost is increased every year due to the growing demand and influx of international students to Canada. The high cost is also because of the marring effects of education inflation.   Why pick Canada for MBA?  This is because Canada offers the accredited and highest ROI offering- MBA programs. In terms of cost, MBA in the USA can cost you up to Rs. 50 to 1cr, while MBA in the UK from top universities can cost you Rs. 75-50 lakhs. Most of the UK’s popular universities are located in London which exponentially increases the cost of living for international students. Then there is Canada, the costs range wildly from Rs. 30 lakhs to Rs. 1 cr., depending on the university your MBA.   When you are shortlisting countries for higher studies, you must consider the cost of living, the ease of picking up a part-time job, the chances of obtaining a work permit, and how convenient it is to apply for a Resident Visa while the student is there. Canada is ahead of USA and UK in terms of lifestyle, ease of permanent residency, and work permit.  Types of MBA offered by Canadian Universities  Another reason to study MBA in Canada is that its universities offer part-time MBA, full-time MBA, Executive MBA, and also online MBA. Each of these degrees is well accepted in the international business circles and families must check the location, ranking, and placements of the institute while shortlisting the final ones. Some courses offer one-year programs which means your child can join the Canadian workforce after completing their graduation.   Source: pixabay How is MBA in Canada under Rs. 40 lakhs possible?  There are over 40 recognized universities offering MBAs in Canada. Here we list some of the universities where you can pursue an MBA in Canada under Rs. 40 Lakhs - the Memorial University of Newfoundland, University of Calgary, University of Victoria (Double Masters), University Canada West, Vancouver Island University, New York Institute of Technology - Vancouver Campus.   One basic rule of thumb while looking for more affordable MBA options in Canada is central and western Canadian universities are a better bet than the ones on the East coast and the ones that are closer to the US. Many of these universities offer MBAs in a host of subjects ranging from General Business Administration and Finance to International Business and Entrepreneurship. If you are looking for a good university degree, that is followed up by a great work opportunity, most of these names are a good bet.   The course duration ranges from one year to 20 months to two years, depending on the format you choose. Most Canadian university classes are scheduled to allow students to work for 20 hours along with their studies and support their finances.   There are scholarships available to international students offered directly by the universities, others offered by private trusts, that can support a student through the two years of MBA.   Coming back to the question that we began with… when parents ask us, Can my child study an MBA in Canada in under Rs. 40 lakhs, our answer is a resounding yes. Just do your research, start saving early, and ensure the student checks all the academic boxes and is focused where his / her study is concerned.   How you can save Rs. 40 lakhs for your child’s MBA in Canada  Here are some simple ways to save Rs.40 lakhs  Start early  Budget your expenses and make a savings plan  Embrace all financial investment options like FDs, Gold, Mutual Funds, PFP, ETFs, etc  If you have over 5 -7 years in hand before your child leaves the country, invest in growth-oriented instruments. If your investment horizon is 4-5 years or lesser, put your money in debt-based instruments. Check on the lock-in periods and returns. Guard your corpus fund, do not dip into it during emergencies. Constantly monitor your investments and check the changing fees rates and rules of admissions in the universities of your interest.   Do this regularly, and in due course of time, you will have the corpus you need to fly your child out to Canada to do an MBA in under Rs. 40 lakhs. Happy planning and saving! Consult an expert advisor to get the right plan for you TALK TO AN EXPERT