Finance Knowledge Share

19/10/2018

Past Performance is not the guarantee of future returns but it helps to understand how the investment manager has performed during each market conditions (like in 2008 crisis and prior boom market).
Evaluating past returns using Quantitative method is only one dimension of the manager selection process, but it is an important one.

Qualitative analysis like process, procedures, quality, fundamental, repeatability, skill etc. play a vital role on hiring, firing or retaining investment managers.

As per my understanding in India we are only dealing with Quantitative analysis of manager selection. It means we have an ample scope to expand our skills towards the qualitative analysis and I think that will be future of India’s Performance analyst/ Consultant roles.
Please feel free to add your thoughts if you agree or disagree.

25/07/2018

Loosing invested principal or interest or both is a RISK.
Investing in risky investment is a RISK
Investing without taking a risk is also a RISK of opportunity loss.
Not investing is a RISK.

17/06/2017

Corpus
Total amount of money invested by all investors in a scheme.

17/06/2017

Investment yield
The annual percentage return which is considered to be for a specific valuation in an investment being expressed as the ratio of annual net income (actual or estimated) to the capital value. It is therefore a measure of an investor's opinion about the prospects and risks attached to that investment. The better the prospects and lower the risks, the lower the expected yield and thus the greater the capital value. The required yield from an investment is estimated in the light of such factors as:

18/01/2017

Leading Indicators
Market indicators that signal the state of the economy for the coming months. Some of the leading indicators include average manufacturing workweek, initial claims for unemployment insurance, orders for consumer goods and material, percentage of companies reporting slower deliveries, change in manufacturers' unfilled orders for durable goods, plant and equipment orders, new building permits, index of consumer expectations, change in material prices, prices of stocks, and change in money supply.

02/06/2016

What is 'Volatility'
Volatility is a statistical measure of the dispersion of returns for a given security or market index. Volatility can either be measured by using the standard deviation or variance between returns from that same security or market index. Commonly, the higher the volatility, the riskier the security.

11/05/2016

What is 'Standard Deviation'
Standard deviation is a measure of the dispersion of a set of data from its mean. The more spread apart the data, the higher the deviation. Standard deviation is calculated as the square root of variance.

2. In finance, standard deviation is applied to the annual rate of return of an investment to measure the investment's volatility. Standard deviation is also known as historical volatility and is used by investors as a gauge for the amount of expected volatility.

24/04/2016

Definition of 'Investment Risk'

Investment risk is defined as the probability or likelihood of occurrence of losses relative to the expected return on any particular investment.

Definition: Investment risk can be defined as the probability or likelihood of occurrence of losses relative to the expected return on any particular investment.

Description: Stating simply, it is a measure of the level of uncertainty of achieving the returns as per the expectations of the investor. It is the extent of unexpected results to be realized.

Risk is an important component in assessment of the prospects of an investment. Most investors while making an investment consider less risk as favourable. The lesser the investment risk, more lucrative is the investment. However, the thumb rule is the higher the risk, the better the return.

15/04/2016

What are indirect taxes?
Indirect taxes are those paid by consumers when they buy goods and services. These include excise and customs duties.

Customs duty is the charge levied when goods are imported into the country, and is paid by the importer or exporter.

Excise duty is a levy paid by the manufacturer on items manufactured within the country. Usually, these charges are passed on to the consumer.

22/03/2016

What is 'Value At Risk - VaR'

Value at risk (VaR) is a statistical technique used to measure and quantify the level of financial risk within a firm or investment portfolio over a specific time frame. Value at risk is used by risk managers in order to measure and control the level of risk which the firm undertakes. The risk manager's job is to ensure that risks are not taken beyond the level at which the firm can absorb the losses of a probable worst outcome.

A statistical technique used to measure and quantify the level of financial risk within a firm or investment portfolio over a specific time frame. Value at risk is used by risk managers in order to measure and control the level of risk which the firm undertakes.

11/03/2016

Sukanya Samriddhi Account Yojana: Key Pointers

Till a girl attains an age of 10 years, the Sukanya Samriddhi account yojana can be opened under her name

Only one account under this scheme is permissible for every girl child

Walk into any post office or authorized banks to open the account

To open an account under SSAY, Birth Certificate of the girl child would be required to submit

The opening amount for the account is Rs 1,000. Thereafter a multiple of Rs 100 can be deposited to the account with a minimum of Rs 1,000 per year

The maximum limit for deposits in the account is Rs 1,50,000 per year

You have to pay in this scheme for 14 years. Suppose you have opened this account when the age of your girl child was X years then you have to pay in this scheme till your girl child age is X +14 years.

The maturity duration of the account is 21 years from the date of opening the account.

Sukanya Samriddhi Account is transferrable to anywhere in India from a Post office or bank to others

The scheme comes from Ministry of Finance under its notification GSR 863(E). This notification was published on 02nd December 2014. The scheme will operate with the name Sukanya Samriddhi Account Rules, 2014.

Please share as much as you can for awareness!

06/03/2016

What is 'Earnings Per Share - EPS'
Earnings per share (EPS) is the portion of a company's profit allocated to each outstanding share of common stock. Earnings per share serves as an indicator of a company's profitability.

Earnings Per Share (EPS)

When calculating, it is more accurate to use a weighted average number of shares outstanding over the reporting term, because the number of shares outstanding can change over time. However, data sources sometimes simplify the calculation by using the number of shares outstanding at the end of the period.

Diluted EPS expands on basic EPS by including the shares of convertibles or warrants outstanding in the outstanding shares number.