PRIMARY OBJECTIVE
MFs : Investments
ULIPs: Protection + Investments
INVESTMENT DURATION
MFs: Works out for Medium term, Long Term Investors. Risky for Short Term investors.
ULIPs: Works out for Long Term Investors only.
FLEXIBLITY
MFs: Very flexible. Plenty of scope to correct mistakes if any wrong investment decisions are made. Portfolios can be easily shuffled in MFs.
ULIPs: Flexibility is limited to moving across different funds offered with policy. Correcting mistakes can turn out to be expensive. Moving funds from one ULIP to another ULIP of a different fund house can be expensive.
LIQUIDITY
MFs: Very liquid. MF units can be sold any time(except ELSS).
ULIPs: Limited liquidity. Need to stay invested for the minimum number of years specified before redeeming.
INVESTMENT OBJECTIVE
MFs: MF's can be used as vechile for investments to achieve different objectives.(Eg: Buying a car three years from now. Downpayment for a home five years from now. Childrens education 10 years from now. Childrens marriage 15 years from now. Retirement planning 25 years from now. Medical expenses after retirement 25 years from now).
ULIPs: ULIPs can be used for achieving only long term objectives (Chidrens education, Childrens marriage, Retirement planning).
TAX IMPLICATIONS
MFs: All investments in MF's don't qualify for deductions. Only investments in ELSS qualify for deductions. Returns on equity MF's are exempt from long term capital gains tax.Returns from debt MF's are taxed.
ULIPs: Provide Tax Benefits. Very flexible in moving between equity and debt funds(no tax implications until maturity of the policy).
STRINGS ATTACHED
MFs: None so ever. There is a small exit load if any.
ULIPs: Some strings attached for policy to be in effect. Minimum number of premiums need to be paid. Minimum fund balance need to be always maintained.
ADVANTAGES
MFs: Better returns than ULIPs.- Lower charges than ULIPs. - Very flexible and flexibility to switch investments from non performing MF's to better performing MFs- Very Liquid can be redeemed at anytime.- Best suited for medium to high risk taking individuals who wish to invest a significant portion in equity funds(atleast 65% exposure in equities).
ULIPS:- Can easily rebalance risk between equity and debt without any tax implications.- Best suited for low to medium risk taking individuals who wish to invest a significant portion in debt funds(atleast 40% or higher exposure to debt). No additional tax burden for those investing mainly in debt unlike in MFs.
Thursday, October 19, 2006
Sunday, September 24, 2006
Markets Have Insurance
Sensex (12236.7) - Nifty (3544.05)
Markets were jittery in the early part of the week as sensex looked to cross its initial resistance above 12000 but once it crossed that level there was no looking back.There looks like a sound insurance for them at the present juncture as they cross resistance levels one after another.Nifty also breached important level of 3500 & 3520 and looks strong and solid.Both NSE and BSE gained 1.8% for the week and it is now ninth consecutive week of positive closing for sensex.Nifty was relatively quiet in the first two trading sessions of the week but took off thereafter before getting mild weakness on friday.
OUTLOOK
Markets can be expected to show a volatile trend in the coming week as both are near there all time high of april-may.The impending settlement of september contracts would also help in ensuring volatility in near future.The markets dont look settled down as of yet despite all the rise week after week and risk averse investors can stay away from this kind of market.There also seems some weakness in the short term chart as both the indices are nearing there all time high.The best course would be to let the markets settle down instead of jumping in it and succumbing to the temptation of rising markets as of now.
SBI
The stock rose to touch a high of almost 1000 to face resistance before turning weak and touched a low of 965 intra week.SBI is losing momentum in the short term, however the medium term outlook looks positive and strong enough to pass rough weather.
Reliance
This stock rose slightly to end the week at 1155 indicating that its still in consolidation phase but very near to a breakout which would very highly be a positive move.There was also an improvement in volumes towards the later part of the week supporting a positive breakout.
Infosys
This stock did not get past the resistance of 1850 last week neither was it weak enough and closed at 1830 above the 1800 barrier.It looks to be now consolidating in this range and if that be the case, it will start a positive movement in the short term.
Markets were jittery in the early part of the week as sensex looked to cross its initial resistance above 12000 but once it crossed that level there was no looking back.There looks like a sound insurance for them at the present juncture as they cross resistance levels one after another.Nifty also breached important level of 3500 & 3520 and looks strong and solid.Both NSE and BSE gained 1.8% for the week and it is now ninth consecutive week of positive closing for sensex.Nifty was relatively quiet in the first two trading sessions of the week but took off thereafter before getting mild weakness on friday.
OUTLOOK
Markets can be expected to show a volatile trend in the coming week as both are near there all time high of april-may.The impending settlement of september contracts would also help in ensuring volatility in near future.The markets dont look settled down as of yet despite all the rise week after week and risk averse investors can stay away from this kind of market.There also seems some weakness in the short term chart as both the indices are nearing there all time high.The best course would be to let the markets settle down instead of jumping in it and succumbing to the temptation of rising markets as of now.
SBI
The stock rose to touch a high of almost 1000 to face resistance before turning weak and touched a low of 965 intra week.SBI is losing momentum in the short term, however the medium term outlook looks positive and strong enough to pass rough weather.
Reliance
This stock rose slightly to end the week at 1155 indicating that its still in consolidation phase but very near to a breakout which would very highly be a positive move.There was also an improvement in volumes towards the later part of the week supporting a positive breakout.
Infosys
This stock did not get past the resistance of 1850 last week neither was it weak enough and closed at 1830 above the 1800 barrier.It looks to be now consolidating in this range and if that be the case, it will start a positive movement in the short term.
Sunday, September 17, 2006
Sensex Last Week
Sensex (12009.5) - Nifty (3478.6)
A momentous week indeed for the Sensex to have touched again the magical figure of 12000 and close above it four months after it fell off that mark with slightly increased volumes. However it was not without the scare it gave on monday which helped to ward off the complacency.Adding to the scare was the volatility for the week.It is now the eight consecutive week of positive gains for the sensex.Nifty, on the oher hand closed almost flat with minimal gains of .2% but with robust volumes.The sensex is now at a very critical juncture and faces resistance at 12100.
OUTLOOK
The medium term outlook still remains vibrant and strong as put down last week.Any fresh positions have to be taken only after sensex closes above 12200 and with increased volumes else long positions can be put off for the time being.FII's which were net sellers in the beginning of the week, turned net buyers in the cash segment as the recovery gained force.
SBI
It reversed from a weekly low of 910 to close at 979 with a return of momentum in the daily charts.Next target for this stock will be 1010 where it can face minor resistance.
Reliance
This stock is still in a consolidation phase and had a flat close at 1140 for the third week running.A positive breakout with good volumes can make the stock touch 1225 and even go beyond it.
Infosys
It managed to close above the pshychological barrier of 1800 this week with a slight increase in volumes.Frsh long positions will have to be initiated after a breakout above 1850 with good volumes as the stock looks weak in short term.
A momentous week indeed for the Sensex to have touched again the magical figure of 12000 and close above it four months after it fell off that mark with slightly increased volumes. However it was not without the scare it gave on monday which helped to ward off the complacency.Adding to the scare was the volatility for the week.It is now the eight consecutive week of positive gains for the sensex.Nifty, on the oher hand closed almost flat with minimal gains of .2% but with robust volumes.The sensex is now at a very critical juncture and faces resistance at 12100.
OUTLOOK
The medium term outlook still remains vibrant and strong as put down last week.Any fresh positions have to be taken only after sensex closes above 12200 and with increased volumes else long positions can be put off for the time being.FII's which were net sellers in the beginning of the week, turned net buyers in the cash segment as the recovery gained force.
SBI
It reversed from a weekly low of 910 to close at 979 with a return of momentum in the daily charts.Next target for this stock will be 1010 where it can face minor resistance.
Reliance
This stock is still in a consolidation phase and had a flat close at 1140 for the third week running.A positive breakout with good volumes can make the stock touch 1225 and even go beyond it.
Infosys
It managed to close above the pshychological barrier of 1800 this week with a slight increase in volumes.Frsh long positions will have to be initiated after a breakout above 1850 with good volumes as the stock looks weak in short term.
Sunday, September 10, 2006
Markets Last Week
Sensex (11918) - Nifty (3471)
Nifty played on a firm wicket gaining 1% again hitting an intra week high of 3490.It was a quite week without any major announcements and everyone was more interested in guessing about sensex hitting 12000 mark again though it didn't obliged, hitting an intra week high of 11983 before reversing.This is the seventh consecutive week of sensex registering a positive close gaining 1.2%. There was a shift of focus from frontline stocks as Midcap index gained 4% and smallcap index gained 3.7%.
OUTLOOK
Markets are expected to be range bound moving around in a tight range this week. There is a slowdown in momentum in the short term although the weekly charts are not showing any signs of weakness thereby indicating strength in the medium term.There is a resistance for nifty at 3495 levels as it reversed from that level last week.
There is an adage which goes "When confused, the best thing to do is nothing". However,this adage is not for high risk takers but risk-averse investors.
Reliance
As envisaged last week, RIL moved in a tight range of 1110-1145 last week.It has been consolidating in this range now for the last two weeks which is a positive sign.Any breakout with good volumes from this range can easily take it to 1225 mark and beyond.
Infosys
This stock hit an intra week high of 1855 before reversing the trend and sliding below 1800 to close at 1794 for the week.Some caution is required here as the stock has come down from overbought territory and after a good runup in the past few weeks.
Nifty played on a firm wicket gaining 1% again hitting an intra week high of 3490.It was a quite week without any major announcements and everyone was more interested in guessing about sensex hitting 12000 mark again though it didn't obliged, hitting an intra week high of 11983 before reversing.This is the seventh consecutive week of sensex registering a positive close gaining 1.2%. There was a shift of focus from frontline stocks as Midcap index gained 4% and smallcap index gained 3.7%.
OUTLOOK
Markets are expected to be range bound moving around in a tight range this week. There is a slowdown in momentum in the short term although the weekly charts are not showing any signs of weakness thereby indicating strength in the medium term.There is a resistance for nifty at 3495 levels as it reversed from that level last week.
There is an adage which goes "When confused, the best thing to do is nothing". However,this adage is not for high risk takers but risk-averse investors.
Reliance
As envisaged last week, RIL moved in a tight range of 1110-1145 last week.It has been consolidating in this range now for the last two weeks which is a positive sign.Any breakout with good volumes from this range can easily take it to 1225 mark and beyond.
Infosys
This stock hit an intra week high of 1855 before reversing the trend and sliding below 1800 to close at 1794 for the week.Some caution is required here as the stock has come down from overbought territory and after a good runup in the past few weeks.
Sunday, September 03, 2006
Rally continues ....
Sensex (11778) - Nifty (3435.4)
The rally continues in the markets though slowly but steadily.Nifty remained positive without giving any surprises and closed with a gain of 51 points, around 1.5% for the week.It hit an intra week high of 3452.3 before closing at its current mark.The intra day rally on friday will certainly boost the sentiments on the street and help to take up nifty further what with this being the month opening and fresh purchases being expected in the derivatives segment.This is the sixth consecutive week wherein the sensex has registered positive closing week on week.Nifty also surged and is currently lying at its resistance zone.
Outlook
The surge intra week and on friday coupled with positive sentiments on the street may help the markets to open gap up on monday morning although the mood of the market looks indecisive in the short term.However this rally has to attract more volumes from now on so as to impart long term worthiness and attract retail investors.
Reliance
The price of this stock moved in a considation phase indicating that the momentum is slowing down although it made a positive closing w-o-w at 1122. It might consolidate at the current mark of 1110-1150 which is again a positive sign after the steep runup it had.
Infosys
This is one big boy which has been able to not only erase all its loss it suffered in may-june bleeding of the market but it has also effectively been able to post new highs after its bonus issue splitting.With a strong positive outlook and a revised guidance it gave in its first quarter results in july, this surely is a great long term story.
The rally continues in the markets though slowly but steadily.Nifty remained positive without giving any surprises and closed with a gain of 51 points, around 1.5% for the week.It hit an intra week high of 3452.3 before closing at its current mark.The intra day rally on friday will certainly boost the sentiments on the street and help to take up nifty further what with this being the month opening and fresh purchases being expected in the derivatives segment.This is the sixth consecutive week wherein the sensex has registered positive closing week on week.Nifty also surged and is currently lying at its resistance zone.
Outlook
The surge intra week and on friday coupled with positive sentiments on the street may help the markets to open gap up on monday morning although the mood of the market looks indecisive in the short term.However this rally has to attract more volumes from now on so as to impart long term worthiness and attract retail investors.
Reliance
The price of this stock moved in a considation phase indicating that the momentum is slowing down although it made a positive closing w-o-w at 1122. It might consolidate at the current mark of 1110-1150 which is again a positive sign after the steep runup it had.
Infosys
This is one big boy which has been able to not only erase all its loss it suffered in may-june bleeding of the market but it has also effectively been able to post new highs after its bonus issue splitting.With a strong positive outlook and a revised guidance it gave in its first quarter results in july, this surely is a great long term story.
Sunday, August 27, 2006
Markets Last Week
Last week,the nifty remained positive in line with general expectations.It gained 29 points or 0.8% to touch and briefly move past the 3400 mark.It closed the week at 3385.95 after hitting an intra week high of 3402.7.
OUTLOOK
However,this week nifty is expected to trade and turn weak due to all the technical indicators and implied factors pointing towards the same.As can be seen, it faces a resistance at 3400 and then a major resistance at around 3430-3440.There is a strong possibility that the nifty may try to move towards its resistance zone given the strong upsurge it has been in for the past few weeks,however if it fails to sustain at present levels,the possibility of nifty then facing a slide in this week is very much live.
Reliance
This stock has been in a major uptrend and was a market outperformer last week.
It hit an intra week high of 1125 before closing at 1110 for this week.As can be seen an upmove is clearly going on the stock and momentum continues to be strong.
SBI
The price took a U-turn on thursday after the report that government was considering to amend the SBI act to dilute govt stake thereby allowing more public participation in the stock.It soared from 855 to a high of 913.8 on friday and closed at 903.The breakout was accompanied by a spurt in volumes,which is very encouraging.
OUTLOOK
However,this week nifty is expected to trade and turn weak due to all the technical indicators and implied factors pointing towards the same.As can be seen, it faces a resistance at 3400 and then a major resistance at around 3430-3440.There is a strong possibility that the nifty may try to move towards its resistance zone given the strong upsurge it has been in for the past few weeks,however if it fails to sustain at present levels,the possibility of nifty then facing a slide in this week is very much live.
Reliance
This stock has been in a major uptrend and was a market outperformer last week.
It hit an intra week high of 1125 before closing at 1110 for this week.As can be seen an upmove is clearly going on the stock and momentum continues to be strong.
SBI
The price took a U-turn on thursday after the report that government was considering to amend the SBI act to dilute govt stake thereby allowing more public participation in the stock.It soared from 855 to a high of 913.8 on friday and closed at 903.The breakout was accompanied by a spurt in volumes,which is very encouraging.
Sunday, August 13, 2006
Market Outlook
Last week,Markets swinged from different central bank meetings to global terror threats.There were two central bank meetings last week alongwith a failed terrorist attempt,reasons enough to throw the markets into deep correction.
Amidst all these,the markets stood rock solid and staid enough to gain three percent in the week.There is still a strong up move going on in the market which started from the low of 8800 and picked up really fast in the last full week of july when markets went up by more than 6% in the week.
However,we should now be ready for a correction also as the likelihood of a sharp reversal is on cards after this steep short term bullish run although there is no confirmation that the short term uptrend has ended or become weak.Still the positions in the market as of now has to be very stock specific and choosy and the mood has to be that of being extremely cautious.
Infosys led from front and surpassed its may 2006 high and closed well above it.This should provide impetus to the script and there could well be a strong upward move starting from here which will be confirmed after another good week.It can well go on to touch 1800 in near term if it continues its present upward move.
Cheers
Amidst all these,the markets stood rock solid and staid enough to gain three percent in the week.There is still a strong up move going on in the market which started from the low of 8800 and picked up really fast in the last full week of july when markets went up by more than 6% in the week.
However,we should now be ready for a correction also as the likelihood of a sharp reversal is on cards after this steep short term bullish run although there is no confirmation that the short term uptrend has ended or become weak.Still the positions in the market as of now has to be very stock specific and choosy and the mood has to be that of being extremely cautious.
Infosys led from front and surpassed its may 2006 high and closed well above it.This should provide impetus to the script and there could well be a strong upward move starting from here which will be confirmed after another good week.It can well go on to touch 1800 in near term if it continues its present upward move.
Cheers
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