What is political corporate mafia? How is it causing harm in India?

"Political corporate mafia" refers to a nexus between politicians, corporate entities, and criminal elements that work together to exploit resources, manipulate regulations, and engage in corrupt practices for their own benefit. This term implies a collusion where political power is used to advance the interests of corporations, often at the expense of public welfare and democratic principles.

In India, the concept of political corporate mafia has been associated with various forms of corruption and abuse of power. Here are some ways it causes harm :

 1.       Corruption :  Political corporate mafia often engage in bribery, kickbacks, and other forms of corruption to influence government policies, contracts, and regulatory decisions. This leads to the misallocation of resources and undermines the rule of law.

 2.       Resource Exploitation :  The nexus between politicians and corporations can lead to the exploitation of natural resources without regard for environmental sustainability or local communities' well-being. This often occurs through illegal mining, land grabs, and deforestation, causing ecological damage and displacing indigenous peoples.

 3.       Tax Evasion :  Corporations colluding with politicians may evade taxes through various loopholes and illicit means, depriving the government of revenue needed for public services such as education, healthcare, and infrastructure development.

 4.       Monopoly and Crony Capitalism :  Political corporate mafia can create monopolies or oligopolies in certain industries by manipulating regulations and stifling competition. This leads to reduced consumer choice, higher prices, and lower quality of goods and services.

 5.       Undermining Democracy :  When corporations exert undue influence over politicians through financial contributions or other means, it erodes the democratic process by favoring the interests of the wealthy and powerful over those of ordinary citizens. This can lead to a loss of public trust in democratic institutions. 

Overall, the political corporate mafia in India undermines economic development, environmental sustainability, social justice, and democratic governance. Efforts to combat this phenomenon require strengthening transparency, accountability, and institutional integrity, as well as promoting civic engagement and the rule of law.

How to learn to read stock charts.

Learning to read stock charts can be a valuable skill for investors, but it takes time and practice. Here's a roadmap to get you started :

1. Grasp the Basics :

·      Chart Types : Understand the different chart types - line, bar, and candlestick - and what information each conveys. Candlestick charts are popular due to the visual representation of opening, closing, high, and low prices.

·     Key Data Points : Familiarize yourself with terms like open, high, low, close, volume,  and moving averages. These form the building blocks of chart analysis.

2. Identify Trends :

·   Support and Resistance : Recognize support and resistance levels. Support is a price area where the stock tends to find buyers, and resistance is where it tends to meet selling pressure.

3. Learn Chart Patterns :

·   Common Patterns : There are various chart patterns, like head and shoulders or double tops, that may suggest future price movements. Remember, these patterns are not foolproof and should be used in conjunction with other indicators.

4. Additional Indicators :

·    Volume : Look at volume bars to understand buying and selling intensity. High volume with a price increase suggests strong buying pressure, while high volume with a price decrease suggests strong selling pressure.

·    Moving Averages : Moving averages smooth out price fluctuations and help identify trends.

Learning Resources :

·     Online Brokers : Many online brokers offer educational resources on chart analysis.  

https://www.investopedia.com/ 

https://stockcharts.com/ 

https://tradingview.com/ 

·         Investment Websites : Websites like Investopedia or The Motley Fool provide excellent guides on stock charts.  

https://www.morningstar.com/ , 

https://www.investopedia.com/

·        YouTube Channels : Educational YouTube channels can provide visual explanations of chart patterns and analysis. https://www.youtube.com/ has a wealth of video tutorials on stock charts for beginners.

Important Tips:

·     Don't Overload : Start by learning the basics before diving into complex technical analysis.

·       Practice Makes Perfect : Use paper trading or virtual simulators to practice your chart reading skills.

·      Charts Tell a Story : Look for confirmation from multiple indicators before making investment decisions based on charts.

·     Don't chase Holy Grail : There's no single perfect indicator or pattern. Combine technical analysis with fundamental analysis for well-rounded decisions.

Remember, successful investing involves a combination of factors, and chart analysis is just one piece of the puzzle. By understanding stock charts, you'll be better equipped to make informed investment decisions.

Are mutual funds really as good as advertised on TV.

Mutual funds can be a good investment for many people, but they are not as good as advertised on TV. Mutual fund ads often focus on the potential for high returns, but they often fail to mention the risks involved.  Here are some of the advantages and disadvantages of mutual funds :

Advantages :

·         Diversification : Mutual funds allow investors to diversify their portfolios by investing in a basket of stocks or bonds. This can help to reduce risk.

·         Professional management : Mutual funds are managed by professional fund managers who have the expertise to pick and choose stocks or bonds.

·         Liquidity : Mutual funds are liquid investments, meaning that they can be easily bought and sold.

·         Affordability : Mutual funds are affordable investments, even for small investors.

Disadvantages :

·         Fees : Mutual funds charge fees, which can eat into your returns.

·         Risk : Mutual funds are subject to market risk, meaning that you can lose money.

·         Past performance is not indicative of future results : Just because a mutual fund has performed well in the past does not mean that it will continue to perform well in the future.

It is important to do your research before investing in any mutual fund. You should consider the following factors :

·         Investment objective : What is your investment goal? Are you saving for retirement or for a short-term goal?

·         Risk tolerance : How much risk are you comfortable with?

·         Time horizon : How long do you plan to invest for?

·         Fees : How much does the mutual fund charge in fees?

·         Past performance : How has the mutual fund performed in the past?

You should also compare different mutual funds before making an investment decision. You can use a mutual fund comparison tool to compare different funds based on their investment objective, risk tolerance, time horizon, fees, and past performance.

Overall, mutual funds can be a good investment for many people. However, it is important to do your research before investing in any mutual fund and to understand the risks involved.

What is the 15x15x15 rule in mutual funds

The 15x15x15 rule in mutual funds is a simple rule of thumb that suggests that you can invest in mutual funds to generate a corpus of Rs. 1 crore by investing Rs.15,000 per month for 15 years at an annual return of 15%. It is a powerful illustration of the magic of compounding.

Here is a simple example of how the 15x15x15 rule works :

·         Investment amount: Rs. 15,000 per month

·         Investment period: 15 years

·         Annual return: 15%

Total investment : Rs. 15,000 x 12 months x 15 years = Rs. 27,00,000. 

Corpus : Rs. 27,00,000 x (1 + 15/100)15 = Rs. 1,00,27,601.

This can be calculated using the following steps :

a.    Convert the investment amount and annual return to decimals :

·         Investment amount = 27,00,000 

·         Annual return = 15/100 = 0.15

b.    Calculate the compound interest :

·         Compound interest = Principal * (1 + Interest rate)^Number of years

·         Compound interest = 2700000 * (1 + 0.15)^15

·         Compound interest = 1,00,27,601

Therefore, the total amount after 15 years will be Rs. 1,00,27,601.

As you can see, even with a relatively modest investment amount, you can generate a substantial corpus over time by investing in mutual funds and taking advantage of the power of compounding.

It is important to note that the 15x15x15 rule is just a simple rule of thumb. The actual returns you generate will depend on a number of factors, including the mutual fund scheme you choose, the market conditions, and your investment horizon. However, the 15x15x15 rule is a good starting point for investors who want to start planning for their financial future.

Here are some tips for following the 15x15x15 rule :

·         Choose a mutual fund scheme that has a good track record and is aligned with your investment goals.

·         Invest regularly and consistently. Even if you can only invest a small amount each month, it will add up over time.

·         Stay invested for the long term. The longer you stay invested, the more time your money has to grow.

·         Rebalance your portfolio regularly to ensure that it remains aligned with your risk tolerance and investment goals.

If you are looking for a simple and effective way to invest in mutual funds, the 15x15x15 rule is a good place to start

Types of Mutual Funds

Balanced Funds

Mutual funds that invest in equity as well as debt and money market instruments are termed as balance funds. Normally equity instruments are the major portion of the investment profile ranging from 60 to 80% and rest in debt and money market instruments. The fund house with a variation percentage predetermines the equity to debt investment ratio that they can use to switch majority of the investment into debt at any given point of time.

Large-cap funds

Funds that invest in companies with large market capitalization are known as large cap funds. The definition of large cap stocks are defined by each fund differently and so understanding the fund investment style helps understanding what kind of diversification one can achieve investing in the fund.

Blue-chip, Top 100, Top 200, Equity funds are some of the common names used for large cap funds but investing in each of those funds from same or different fund house does not diversify mutual fund investments.

Mid Cap & Small Cap Funds

Funds that invest primarily in medium size companies or medium market capitalization companies are termed as mid cap funds and funds that invest in small size companies or small market capitalization are termed as small cap funds. Ideally mid and small cap companies are clubbed together into one group by fund houses to name the fund as mid and small cap funds. The idea is to invest into small and medium companies without too much segmentation.

Small and mid cap category of funds tend to avoid the market leader and try to invest in future leaders and have higher returns but with at the price of higher risk.

Arbitrage Funds

Arbitrage funds are funds that remain in cash or debt investments and look for arbitrage opportunities in various market segments like difference in pricing between cash and derivatives segment.

Index Funds

An index fund is benchmarks an index for investment. Some of the popular indexes for mutual funds are Nifty, Sensex, Nifty Junior, Nomura MF Index, and CNX 500 etc.

Investing in Index funds along with a large cap fund may not provide the needed diversification and it may just lead to investing in the same companies through different funds.

Tax-saving ELSS Funds

Funds that have 3 years of locking period and provide tax benefit under the section 80C are termed as tax saving ELSS funds. Every fund house has one tax saving scheme and normally this fund invest in large cap stocks. Check fund specific investments if you prefer to diversify your assets with tax saving funds.

Remember investing in an ELSS fund with a large cap fund may not provide the needed diversification.

International Funds

As the name suggest, funds that invests in opportunities outside India. Some of the funds in this category include L&T Indo Asia Fund, Birla Sun Life Intl. Equity Fund, and DSPBR World Gold Fund. Investing in international fund can provide great deal of diversification. Remember that there are quite a few international funds but all the international funds are not same and some invests in International Equities, where as other invest in international commodities like gold or oil.

Sector Specific Funds

Funds that invest in particular sectors like infrastructure, banking, Information technology, FMCG, power etc. are call sector funds. Like International funds, sector specific funds provide better diversification but unless you want to be diversifying the complete portfolio yourself, it is better to be investing in diversified funds.

Diversified Funds

Funds that neither invest in any particular sector nor invest in any particular sized companies are termed as diversified funds. Diversified funds can be a large cap, mid cap, small cap or even an international fund but normally if a fund is in those categories we tend to name them with those categories and not name them as diversified fund but any fund that does not invest in any given sector is ideally a diversified fund.

Funds of Funds

Funds of Funds or FoF is a mutual fund which invests in different mutual fund schemes instead of stocks and the biggest advantage of investing in funds of funds is you get access to high end closed ended funds and schemes which a retail investor may not be able to invest because of minimum investment limits.

There are 2 kinds of funds of funds i.e. equity oriented and debt oriented. Equity oriented fund of fund invests majorly in equity funds and debt oriented fund of fund majorly invests in debt funds.

Gold Funds

Gold funds primarily invest in Gold ETFs. Investing in Gold ETF’s directly than investing in Gold funds.

Debt Funds

Debt funds invest in short-term or long-term bonds, Central Government Loan, State Development Loan, NCDs or Non Convertible Debentures or any other money market instruments. There can be lock-in periods for investments in such Government instruments but you can invest in those instruments through debt funds without any lock-in period.

Apart from lock-in periods, you are also able to invest in good schemes at any given point of time that may not available when you want to be investing in a debt fund. 

Hybrid Funds

Most of the Balance funds invest majorly in equity to be treated as equity fund for taxation (needs 65% of investment in equity) but funds that do not have equity major investment profile and invest in equity, debt as well as any other money market investment instruments are known as hybrid funds.

Rate of Returns and the Risk Level for the various Investment Products currently in India

Instrument	Average Returns	Risk
Savings Account	4%	Very Low Risk
Fixed Deposits	8 to 9%	Very Low Risk
Corporate Bonds	8 to 12%	Low to Medium Risk
Government Bonds	8 to 10%	Low Risk
Equity Mutual Funds	15% or More	High to Very High Risk
Balanced Mutual Funds	12 to 15%	Medium to High Risk
Debt Mutual Funds	10 to 12%	Low to Medium Risk
Direct Equities	30% or more	Very High Risk
Gold	12 to 15%	Medium to High Risk

All numbers above are indicative and average only. The actual returns may depend based on the type of Instrument being bought and the returns offered by the actual instrument.