AVFINPAL- Your Financial Pal

Investing in financial securities such as shares, debentures and bonds is considered one of the best avenues for investing. These investments are profitable as well as exciting. Investing in such instruments involves both rational as well as emotional responses. It is indeed rewarding but at the same time involves a great deal of risk. It is very often (and not even suggested) to find investors putting their entire savings in a single security. Instead, it is always better to invest in a diversified pool of securities. Such a pool of securities is called a portfolio. Creation of a portfolio helps to reduce risk without sacrificing the returns. An optimal portfolio is one which minimizes the risk and provides a higher return. Therefore, this makes portfolio management a very important aspect of your investments. What is Portfolio Management?  Portfolio management means strategically managing an investment portfolio, by selecting the best investment mix the right proportions...

So, recently I have been getting a lot of questions on book recommendations about personal finance and investing. So I thought why not share my top personal favorite books on investing and personal finance. The suggestions are going to be in order so don't just hop to book number 5 if you have not read the remaining books as there will be chances you might not understand the fifth book in the very first reading so consider these books in the order they are: 1. Rich Dad Poor Dad by Robert Kiyosaki:  This classic is a must-read for young investors. Kiyosaki's view is that the poor and middle class work for money, but the rich work to learn. He stresses the importance of financial literacy and presents financial independence as the ultimate goal to avoid the rat race of corporate America. The author points out that while accounting is important to learn, it can also be misleading. Banks label a house as an asset for the individual, but because of the required payments to ...

If you are an investor or someone who is looking to invest in the Indian economy, you must be aware that while the debt market is facing turbulence due to the recent downgrades in the securities of some of the giant companies like "Yes bank", ADAG, DHFL group and even Zee group. At the same time, the equity market is rushing to the sky and is rolling around its all-time high. In this article, we will be discussing what should be your strategy in such a cumbersome economy. While moving forward we will also be looking into the future outlook of the markets. In this article, our primary focus will be on retail and small investors only, as the institutional investors or the big players might already have planned their next move. But these small investors are at the end of the knowledge tail and need some updating. To begin with, let's look at the positive and simpler part of the market i.e equities. The same equity market that has bled red during the last year is on ...

The recent fall in the equity market has led many investor's portfolios to the negative. Where the market recently touched its all-time high last month, the market has completely turned around since last month. This raises the question should you stop your SIPs and redeem your equity exposure completely? In this article, we will be focusing on SIPs mainly as more convenient and preferred behavior in a bearish market is to discontinue the SIPs. Before moving forward lets quickly recall what a SIP is : A systematic investment plan (SIP) is a disciplined way of investing in mutual fund schemes, in which an investor can make equal payments at regular intervals (normally monthly) over an extended period to accumulate wealth over the long run. It inculcates the habit/discipline of saving and building wealth for the future. SIPs make sense only if invested regularly for a long period of time. If you get into a SIP only for a short period, the returns generated are insignificant...

Investing in stocks requires a careful analysis of financial data to find out the actual worth of the company. The simplest way to make a viable investment decision is to look for the favorability of various ratios which are easily available. This approach is less cumbersome and less time consuming than examining the actual figures of the balance sheet, income statement and cash flows. Though this is not a foolproof method, it is a good way to run a fast check on a company's health. "Ratio analysis is crucial for investment decisions. It not only helps in knowing how the company has been performing but also makes it easy for investors to compare companies in the same industry and zero in on the best investment option. In this article, we will be sharing with you some of the key ratios one should look for before investing.  1. Price- earning ratio or P/E ratio: The price-to-earnings or P/E ratio shows how much stock investors are paying for each rupee of earnings. It sh...

So, Sensex and Nifty made fresh all-time highs recently. The Nifty managed to not only hit the 12000 mark for the first time ever and while Sense comfortably attained the mark of 40000. Those who have already invested in the market are bearing the sweet fruit. However, for the beginners, the situation is very much confusing. They are consumed with the dilemma whether is it the right time to invest in the Indian market and should they start investing or should they wait. Also, same is the dilemma with the investors who are looking to invest further in the stock markets. In this post, we will be answering the question of Is there a right time to invest in the stock market and if yes, what is the right time to invest in the share market? So, let us get started. Is it the right time to invest? This question is often asked when the market makes a new high or a new low. When the market is high people would want to wait for the market to make a downturn again. However, when th...

Setting a goal is the very first step of the journey to secure your financial future. When it comes to setting and pursuing our goal we all make a lot of mistakes which can affect our overall financial planning and state of financial well being. In this article, we will be discussing some of these mistakes that people tend to make while setting their financial goals. 1. Seeing your goal in isolation: One of the biggest error in financial planning is not seeing your goals as linked to your other goals and your overall finances. For example, your goal to retire rich depends on how well disciplined your financial lifestyle is today. The better you budget, save and invest your money today has a direct impact on your retirement goal.  Similarly understanding the conjunction between your various goal is also important. Prioritizing your goals that are crucial for your financial situation is important.  If building an emergency fund to cover ...