Risk: is the maximum loss you can have Reward: is the maximum profits you can get Though it sounds very easy, most traders do not set the risk:reward before entering the trade They get into the trade thinking they can dynamically vary the maximum profits or maximum losses, but it does not work. That is…
You might have heard about IPO — Initial Public Offering, wherein the owners sell a percentage of their company to the public for cash. example: owners may sell a 15% stake for a total sum of 5000 crores. Owners will use this 5k crore to build their company and as a result, the price of the shares…
A dividend is a portion of profits that it pays out to all the shareholders. A company can choose to pay dividends or re-invest the entire profit for more growth. Dividend yield on the other hand is more important for us If we invest 1 lakh in stock and the Dividend yield is 5% — it means…
EPS is earnings per share When you divide the total net profits by the total number of shares = you get EPS Usually, the total number of shares does not go up that frequently (so the denominator remains constant), whereas profits go up or down. If the EPS = 5, it means you will get…
TAX tip today.. NPS — national pension scheme will give you additional tax savings of Rs50000 under 80ccd. This is above the Rs1.5 lakhs benefit from 80c So if your income is taxable, then use this option to save… 80c + 80ccd = total 2 lakhs reduction in taxable income
1. Equity 2. Debt 3. Hybrid Equity mutual funds mean the entire investments will go into buying shares of different companies. These types of mutual funds are further divided into 1. index funds 2. large cap 3. mid cap 4. small cap 5. flexi cap 6. elss tax saver 7. sector funds Debt funds mean — the…
Monetary means the decisions taken by the RBI and Fiscal means the decisions taken by the Central Govt. Monetary policy could have 2 impacts on the economy 1. growing economy 2. slowing economy Similarly, Fiscal also has the same 2 impacts So at any point, the combination of monetary + fiscal could either be added…
P/E = share price/EPS (EPS we learned earlier — earnings per share) What it means in layman’s language is how much money you need to invest in a company to get Rs1 as returns if P/E = 20, it means if you invest Rs20 — that company will give you Re1 returns on investment If P/E = 40, it…
To calculate HLV, you have to divide your annual income by the 1 year FD rates. For example, if your annual income is 10 lakhs, and the FD rate is 7% then HLV = 10 lakhs/7% = 1.4285 crores. It means that your annual insurance coverage should be nothing less than 1.42 crores. In layman’s…
