Whenever you intend to save for an enjoyable retirement, a child’s education, or merely try to increase your worth over time, knowing the objectives of investment is vital. Understanding these goals allows you to make wiser decisions, reduce risks, and attain financial security.
Investment objectives are the financial schemes that let you decide where and how to invest your money. It serves as a very personal standard that agrees with your risk tolerance, expectations with investments, and dreams for the future. Objectives help you decide which financial instruments to use, whether steady income, capital preservation, or very high growth.
Shortly put, one’s investment objective answers the most basic question: What do I want my money to achieve?
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Investment objectives work as a framework. They guide your choices in the ever-expanding financial landscape, from stocks and bonds to real estate and mutual funds. When you define your investment objective, you are also able to:
With this clarity, you can better steer the financial condition, especially in times when the market is just changing.
Setting clear objectives is essential for the establishment of a viable investment strategy. These goals will guide your decision-making concerning finances, which in turn will help you decide on an asset allocation and maintain the commitment through downturns in the market. In general, investment objectives can be classified into primary and secondary types, each having different meanings for your overall financial itinerary.
Primary investment objectives are the fundamental objectives which comprise the rather comprehensive agenda of any investor’s financial roadmap. Derived from fundamental needs, such as capital preservation, income generation, or accumulation of capital over time, those objectives are mostly long-term since they have strong priorities and are usually ranked according to life stage, income level, and risk tolerance.
a. Safety
Safety or protection of capital is of prime importance to conservative investors. It has a goal that the principal amount, which is the very money put in, should remain intact, irrespective of what happens in the market.
For individuals nearing retirement age or who cannot afford to take major financial risks, this is especially important. Safety is generally acquired through low-risk financial products such as:
Though the returns from such investments may not be very attractive, security is the premium these investments offer for hedging wealth from market declines.
b. Regular Income
Regular income serves to maintain a stable cash inflow from investments, mostly monthly, quarterly, or yearly. This meets the needs of those who look for passive income sources to cover daily needs and often includes retirees, part-time workers, and freelancers.
Investment avenues providing such consistent income flows include:
Low risk with varying returns exists in such ways to boost income.
c. Capital Gains
One of the most popular goals for someone investing over long stretches is to realise capital gain: earning profits by selling an investment for a price greater than its purchase cost.
The risk appetite of such investors is definitely on the higher end because of their long-term horizon, whether young professionals or seasoned market participants. This approach speaks of growth instead of income or capital preservation.
Typical instruments for targeting capital gains include:
The potential for returns from such investments has a huge upside; however, a comparatively large downside is there in terms of volatility. Therefore, capital appreciation strategies require sound financial planning and investment discipline.
d. Saving Up for Retirement
Retirement planning is one of the major financial objectives, and investment is the heart of sustainable income for the period after retirement.
This involves systematic investment over time into specific instruments such as:
The key thing is to start early. The longer your money is invested, the more it benefits from compounding, where your returns begin generating their own returns. An approach that encourages disciplined long-term investment will lead to a comfortable retirement, and you will have enough savings to maintain your desired lifestyle.
While primary objectives cater to the core reasons for investing, secondary objectives tend to focus more towards enhancing one’s investment experience. These objectives look at ways to make portfolios more efficient and user-friendly, particularly during uncertain times or during moments of tax planning.
a. Liquidity
Liquidity is the ease of conversion of an investment to cash without loss in value. In case of emergencies, liquidity becomes particularly important when funds are needed at short notice.
These are examples of highly liquid investments:
Having some portion of your portfolio invested in liquid assets is necessary to ensure that you have access to funds in case of unexpected events, like a medical emergency, job loss, or sudden travel expenses, without having to liquidate long-term investments prematurely.
b. Minimising Taxes
An important and often neglected objective of investing is tax efficiency. Tax-saving instruments give investors legal ways to reduce tax liabilities and, therefore, enhance their net return.
Some tax-efficient investment options according to the Indian tax law are:
Thus, by incorporating these instruments into your portfolio, you have the double benefit of securing your financial future and acquiring tax relief, making your investments work extra hard for you.
Following an understanding of investment objectives comes the step of defining how to invest efficiently. Yet this investment strategy does not apply to all; it must be custom-made for every individual, taking into account their financial standing, goals, and risks.
1. Analyse Your Financial Situation
The first step in any investment journey is self-assessment. Check for the following:
These goals may call for different investment strategies. For example, if you plan to buy a house within five years, you will most likely need a conservative portfolio that has very low volatility; whereas retirement planning, which has a more extended horizon, may allow you to take greater risks.
2. Investment Diversification
Diversification can be one of the efficient ways of managing investment risks. It basically involves diversifying your investments across several asset classes:
It helps one to lessen the effect of the performance of a single investment on the portfolio, thus helping to stabilise returns while protecting capital.
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3. Time Period
The investment horizon, the time period you intend to remain invested in, is crucial in selecting the right instruments.
Fit within timeframes through investment, so you need not exit under a market low nor miss opportunities because of market highs.
4. Periodical Reassessment
Having an investment strategy doesn’t equate to “set and forget.” Review and realign now and then to maximise the much-needed changes in life events, market dynamics, and upcoming shifts in the way ahead.
Schedule it quarterly, biannually, or annually, and answer the following:
Periodical reassessment puts you in charge of your finances, thus ensuring that your investments realise objectives irrespective of surrounding changes.
Knowing the three main forms of investments makes it easy to decide how to structure your portfolio according to your objectives.
1. Ownership Investments
Ownership Investments include equities, real estate, and ownership of businesses, which are generally higher-risk investments with potentially greater returns. The benefits of such investments are capital gains and dividends. Ideal for long-term objectives such as wealth creation or retirement planning.
2. Lending Investments
Here, technically, you are lending money to earn interest. Fixed deposits, corporate bonds, and government securities fall under this category. Lending investments are usually considered safer and are preferred for income.
3. Cash Equivalents
These are short-term, highly liquid investments like money market funds or treasury bills. They generate low returns but are indispensable for emergency reserves or short-term requirements.
Even though both terms are often used as synonyms, they have separate meanings.
Savings implies putting away money in a safe place for short-term purposes, either for emergencies or transactions. The returns are low, while the security and liquidity of capital are guaranteed.
Investment typically comes with risks that will give higher returns over a course of time. Investments are held for long-term goals and generating wealth.
In a nutshell, savings are your safety net, and investments are your growth ladder.
There is no universal answer to this question, but the general rule is: start as early as possible. The longer you invest, the longer you can enjoy the benefits of compounding. Early investments will also allow the investor to take advantage of various market cycles and withstand temporary downturns.
Waiting for the “perfect time” often leads to missed opportunities. Creating wealth, if not a fortune, through disciplined investing is possible even during economic slowdowns.
You must think of starting an investment plan once you:
Investing early, however small the amount, is good to build that habit and consistency. With options like SIPs in mutual funds, the whole process becomes automated and easy for those new to investing.
Selecting a partner for your investment journey is as critical as choosing the investment assets. Each investor has a unique story; hence, the services at Pentad are aligned with your goals, be it capital growth, retirement planning, or income generation.
What makes Pentad stand out:
Whether experienced or starting as an investor, Pentad will help you deal with all these investments without fearing rocky roads.
Having knowledge about the goals of investment is necessary for making informed financial decisions. From preserving your capital to wealth accumulation for retirement, all investment objectives determine every aspect of your investment strategy. Identify your goals, ensure the diversification of your assets, and do not forget to review your portfolio regularly, and you can be confident of a secure and prosperous financial future.
It doesn’t matter whether you’re planning for five years or fifty; the time to invest in a brighter future is now. Invest smartly and purposefully.
Have you ever considered or even wished to invest in a company like Nykka, Paytm, or Ola before they hit the stock market? That’s the power of unlisted shares – a hidden investment gives you a sneak peek into tomorrow’s stock market leaders. While most people focus on buying shares from NSE or BSE, smart and savvy investors quietly tap into a less-explored yet high-potential market in the unlisted share markets.
In this blog, we’ll break down everything you need to know — what unlisted shares are, why they matter, how they differ from listed shares, and where exactly you can buy them in India. Whether you’re a first-time investor or looking to diversify your portfolio, this guide will walk you through it in the simplest way possible.
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Unlisted shares are simply shares of companies unavailable on regular stock exchanges like the NSE or the BSE. These could be fast-growing start-ups, subsidiaries of large corporations, or companies gearing up for an IPO. Since they are not publicly traded, these shares are bought and sold through private deals, making them slightly harder to access but often way more rewarding in the long run.
Unlisted financial instruments are investment avenues not traded on traditional stock exchanges (i.e NSE or BSE). These instruments typically involve private transactions, making them less liquid but often more rewarding. Below is a breakdown of key unlisted instruments and what makes each one unique:
1. Unlisted Shares
These are equity shares of companies that are not yet listed on public exchanges. They may belong to start-ups, pre-IPO firms, or subsidiaries of listed companies.
Example: Shares of Tata Technologies, Reliance Retail, or HDFC Securities before their IPO.
Why invest? Early entry into high-growth companies at lower valuations.
2. G-Secs (Government Securities)
G-Secs are debt instruments issued by the central or state government, usually for a fixed term and with a guaranteed return.
Example: Treasury bills (short-term) or government bonds (long-term).
Why invest? Low-risk, stable returns; ideal for conservative investors.
3. Convertible Securities
These are hybrid instruments that can be converted into equity shares at a later stage, offering the benefits of both debt and equity.
Example: Convertible debentures or preference shares.
Why invest? Fixed income now + equity upside later.
4. Preferential Shares
Issued to specific investors at preferential rates, these shares may offer fixed dividends and sometimes carry convertibility features.
Example: Private placements made to institutional investors.
Why invest? Priority in dividends and capital repayment.
5. ESOP (Employee Stock Ownership Plan)
These are shares granted to employees as part of their compensation. While unlisted initially, they may become tradable if the company is acquired or goes public.
Example: An employee receiving shares of a startup or a tech company like Zoho.
Why invest? Employees can gain significantly from future growth or IPOs.
6. Swaps
Swaps are contractual agreements to exchange financial instruments or cash flows between two parties.
Example: Interest rate swaps, currency swaps, etc.
Why invest? Mainly used for hedging or optimising debt structures.
7. Forwards
A forward contract is an agreement between two parties to buy or sell an asset at a predetermined future date for a fixed price.
Example: Forward contracts on commodities, currencies, or stocks.
Why invest? Custom hedging strategy against market volatility.
8. Debentures
These are long-term, unsecured debt instruments issued by companies to borrow money. They typically carry a fixed interest rate.
Example: Non-convertible debentures (NCDs) by private firms.
Why invest? Predictable returns, typically higher than bank FDs.
9. Bonds
Bonds are similar to debentures but can be issued by both corporations and governments. Some may also be convertible.
Example: Corporate bonds from private firms like L&T Finance.
Why invest? A secure income option in the medium to long term.
Each type of unlisted financial instrument caters to different investor goals — whether you seek high growth, regular income, or low-risk stability. The unlisted market, though less explored, is filled with diverse options that, when chosen wisely, can enhance your portfolio’s overall performance and resilience.
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Unlisted shares are often presumed to be for the wealthy, but that ain’t true. It is not just for the wealthy or the insiders, and offers several compelling benefits. Let us have a quick look at some of the benefits of investing in the unlisted shares:
1. High Returns
Early investment in a growing company can lead to 5x or even 10x returns post-IPO or acquisition.
2. Portfolio Diversification
They help balance your investments beyond traditional mutual funds and listed stocks.
3. Exclusive Access
These deals often fly under the radar, giving you access to promising companies before the crowd.
4. Growth Potential
Many unicorns and soonicorns start with unlisted shares – catching them earlier can be a game-changer.
5. Risk Mitigation
Carefully chosen unlisted shares can offer steadier growth and less daily market volatility.
People often wonder if they can buy unlisted shares and how to buy them unlisted shares. Don’t worry, we’ve got you covered on that too. Buying unlisted shares is easier than it seems if you know the right routes. Let us explore some of the most popular ways:
Companies raise funds by directly offering shares to some select investors, usually facilitated by merchant bankers or investment firms.
You can buy shares from existing shareholders, like employees or promoters. These often happen through secondary sales or ESOP deals.
Specialised firms like Pentad connect buyers with sellers in the unlisted market. They help with everything — due diligence, valuation, compliance, and transaction execution.
If you are new to unlisted shares and yet want a hassle-free experience, Pentad is one of the most trusted names in the game. Here’s why the smart investors love to invest via Pentad;
Unlisted shares may not be the mainstream choice, but they sure do offer a gateway to early-stage opportunities, higher returns, and portfolio diversification that traditional markets often can’t match. While they come with their own set of risks, like lower liquidity and limited transparency, investors who do their due diligence can reap substantial rewards.
As India’s startup and private equity ecosystem continues to boom, the unlisted space is becoming more accessible than ever. With trusted platforms like Pentad, even individual investors can explore this once exclusive domain with confidence and clarity.
If you are ready to explore beyond the ordinary and invest where the next big business stories begin, unlisted shares might be one of your smartest moves yet.
With the growth rate of one of the fastest economies, India is enticing global investment. With NRIs investing in India, this is not only an economic decision but an opportunity to participate in the country’s economic growth while securing their financial future. Well supported by an investment landscape of easy policies and promising returns, India is a clear choice for NRI investment.
India is one of the fastest-growing economies in the world, with its GDP growth rate higher than that of many developed nations. The country is undergoing a massive transformation with rapid digitalisation, the government facilitating an easier business environment, and a flourishing startup ecosystem. India’s great opportunity for NRIs in investing is not just to make profits but to take part and play an essential role in building the nation while ensuring their own financially safe future.
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Investments in India will provide NRIs the opportunity to leverage these factors under consideration while also diversifying their financial portfolios to ensure long-term stability.
One of the main reasons NRIs invest in India is to diversify their portfolios across different markets. Diversification indeed helps minimise overall risks and acts as a buffer from any adverse economic conditions in their country of residence. India offers NRIs a plethora of investment options, such as:
Investing in diversified asset classes in India allows the NRI to balance risk across the asset classes and provides ample growth avenues.
India’s dynamic economy and thriving industries have always given strong returns on investments of various types.
Investing in India gives NRIs an outlet to generate wealth while benefiting from India’s economic momentum.
Many NRIs tend to invest in India to fulfill long-term financial objectives such as:
Investments in Indian assets provide an opportunity for NRIs to plan for important financial milestones while keeping their roots planted in the land of their birth.
India offers tax incentives to attract investments by NRIs:
This set of tax incentives makes India an attractive destination for investment for NRIs interested in tax-related financial planning.
The difference between the market rates of strong international currencies (USD, GBP, EUR) and the Indian Rupee (INR) gives NRIs a significant advantage.
Thus, by investing in India, NRIs are in a position to take advantage of any shifts in currency that could help them enhance their wealth.
India is fast becoming a haven for alternative investments beyond the conventional modes of investment:
Alternative investments present more diversification to the portfolios and capitalise on emerging financial trends for NRIs.
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Rather than lending at near-zero interest rates as in many developed countries today, India has very attractive returns on fixed-income instruments.
Compared to many other markets, India has much higher interest rates than many other markets for NRIs wanting fixed-income investment options.
There are various modes of investment in India open to an NRI:
Before investing, NRIs should keep in mind the following:
With this, NRIs can invest in India seamlessly and profitably.
As a trusted investment partner, Pentad simplifies investments for NRIs into India. Providing technical financial knowledge and advice, a customised strategy, and deep insights into market trends, continues to ensure that NRIs are equipped to make appropriate investment choices in furtherance of their financial goals.
Whether it is wealth management, tax optimisation, or compliance with various laws, Pentad oversees the smooth sailing for NRIs through the waters of investment in India.
Gold is a favourite in every Indian home—not only as a valued ornament but also as a sound investment. As an NRI, investing in gold enables you to diversify your portfolio while staying connected to India financially. However, before you invest, it’s important to know the various ways of purchasing gold, the tax implications involved, and the advantages of each method. This guide has been created to assist you in making well-informed investment decisions regarding gold in India, where your wealth is increased while being in line with your financial objectives.
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Gold has always proved to be one of the most secure bets of investment on earth, especially in times of economic turmoil. Its role as an investment means that not only does it help you preserve wealth, but it also helps you stay financially connected to the homeland. The historical viability, protection from inflationary trends, and intrinsic value of this asset make it a global favourite for investors. Here are a few reasons why gold will always remain a preferred investment for NRIs:
1. Hedge against Inflation
Gold is said to be an inflation hedge because its value rises when the purchasing power declines in the fiat currencies. Unlike cash or fixed-income assets, which might get devaluated with rising inflation, gold prices tend to appreciate over the long term. For NRIs earning foreign currency and wanting to invest in India, gold is a hedge against currency movements and inflationary pressures to maintain the value of your savings in the long term.
2. Portfolio Diversification
A balanced investment portfolio requires investing in a mixed bag of assets, whose performances diverge under different market conditions. Gold is a non-correlated asset since it moves independently of the stock market and bond-related movements. Thus, when stock markets are bearish, the prices of gold would typically remain steady or even face upside pressure, acting as a cushion for the investors. NRIs wanting to mitigate total portfolio risk can invest in gold, which acts as a stabiliser during turbulent times.
3. Global Liquidity
Gold remains an asset universally recognised, putting it among the most liquid investments. Gold can easily be sold or converted into cash in international markets whether in physical or digital form. This liquidity is beneficial for you, as it gives you access to money whenever required, wherever you may be. Unlike real estate or other tangible investments that require time to sell, gold can be liquidated quickly without much depreciation.
4. Cultural and Sentimental Value
The cultural and emotional importance of gold in India is so profound that it transcends traditional notions of investment. From weddings to festivals and religious ceremonies, gold is essential. Buying gold, for non-resident Indians, secures financial viability and keeps them tied to the Indian tradition. Gold, inherited or bought by NRIs as gifts for family functions, strengthens the case for the long-term appreciation of this object, as wealth and heritage.
You can invest in Gold through different avenues. Gold investments in India can boldly be classified under the heads of physical and paper-based gold. Each kind of investment will have its own advantages and disadvantages, which will guide investors in making the right choice in accordance with their goals, risk appetite, and convenience.
1. Physical Gold Investment
Most traditional investors favour physical gold as it is tangible and has long existed in human culture. Investing in gold physically, however, comes with the complex issues of storing and securing it, as well as expenses like making charges and GST. There are a few ways you can invest in a physical form of gold. They are:
2. Jewellery
Gold jewellery in India is recognised as the most popular and preferred form of gold ownership. People tend to procure it during special occasions such as weddings, religious ceremonies, and others. However, buying gold jewellery comes with many imposed costs such as making charges that range between 5% and 25% and GST, which is 3% of the purchase cost. Besides, this is a type of asset that is very prone to wear and tear, which may, in turn, reduce its resale value.
3. Gold Coins and Bars
There is a preference for gold coins and bars among those who want to invest in physical gold without paying too much in making charges. They are available in various sizes, from 1 gram to 1 kg. The coins and bars can readily be purchased from banks, jewellers, or the Internet. Gold coins and bars, unlike jewellery, assure greater resale value with extremely low making charges and guaranteed purity. NRIs should ensure good storage, such as bank lockers or secure vaults, to protect their investment.
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4. Paper Based Gold Investments
With the advancement of financial markets, NRIs now have the option to digitally invest in gold without worrying much about its physical storage and security. These investments offer exposure to gold with higher flexibility, transparency, and liquidity.
5. Gold ETFs (Exchange Trade – Funds)
Gold ETFs are financial instruments that are representative of actual physical gold and are traded on stock exchanges. Each unit of Gold ETF is backed by actual corresponding physical gold, thereby maintaining its worth. The investment in Gold ETFs allows NRIs to:
6. E-Gold
NSEL, the National Spot Exchange Limited, permits investors to buy gold in a digital format, with the provision for conversion into physical gold if desired. The beauty of this method of investment is transparency, along with the exposure of impurities in physical gold. However, the latest regulations surrounding E-Gold should be checked by investors, since trading was affected by regulatory changes in India.
7. Sovereign Gold Bonds (SGB)
SGBs are government-backed securities issued by the Reserve Bank of India (RBI). They are a great investment opportunity for NRIs who want to have some regular income (2.5% per annum) and capital appreciation on the same. The salient features of SGBs are:
8. Gold Mutual Funds
Gold mutual funds invest in Gold Exchange Traded Funds (ETF) and gold-related assets, providing an indirect way to invest in gold. These are managed by professional fund managers without requiring a demat account, and are open to NRIs:
Before investing in gold, NRIs must consider the tax implications. Here is a detailed look at the tax liability.
| Investment | Tax Implication |
| Physical Gold ( Bars, Coins and Jeweller) | 20% LTCG tax ( If held for over 3 years ) + indexation benefits. |
| Gold ETFs and E-Gold | Taxed as per capital gains: 15% STCG (if sold within 3 years), 20% LTCG after indexation. |
| Sovereign Gold Bonds | No capital gains tax if held till maturity. |
| Gold Mutual Funds | 15% STCG (if held for less than 3 years), 20% LTCG with indexation after 3 years. |
Gold provides immense advantages for investing NRIs such as financial security, tax benefits, and diversification in portfolios. Although physical gold remains in demand, investments in digital forms such as ETFs and Sovereign Gold Bonds ensure safer modes as compared to taxation-efficient ways of investing. Understand the tax and maximisation details on returns while still being compliant.
If you are an NRI wanting to invest in gold in India, schedule a consultation with Pentad for proper advice on the right option to match your investment goals.
Gold has always been a preferred investment choice in India, symbolising wealth, security and prosperity. With its historical significance, stability, and ability to hedge against inflation, gold remains an integral part of investment portfolios. However, investing in physical gold has taken a backseat in recent years due to security concerns, storage hassles, and making charges. This has led to the rise of Gold Exchange-Traded Funds (Gold ETFs), which offer the benefits of gold investment without its traditional drawbacks.
Gold ETFs are an excellent investment option for individuals looking to diversify their portfolios while maintaining liquidity. In this blog, we will explore everything you need to know about investing in Gold ETFs in India, from understanding what they are to how you can start investing in them today.
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Gold ETFs are exchange-traded funds that invest in gold and track its market price. Each unit represents physical gold, typically 99.5% pure, stored securely by fund houses. These funds are traded on stock exchanges just like shares, making them a convenient and hassle-free way to invest in gold without actually holding it in physical form.
In simple terms, Gold ETFs provide investors with the opportunity to invest in gold without the risks associated with physical ownership, such as theft, impurity, or storage concerns. The performance of Gold ETFs is directly linked to the gold prices in the market, making them an attractive investment option for those who want to benefit from gold’s value appreciation.
Gold ETFs function similarly to mutual funds but are traded on the stock exchange like equities. When you invest in a Gold ETF, you are essentially purchasing gold in a dematerialised form. The asset management company (AMC) that manages the ETF holds physical gold equivalent to the ETF units issued.
Gold ETFs pool investor money to buy physical gold, which is securely stored by fund houses. The value of Gold ETFs fluctuates per gold price, and investors can buy or sell units through stock exchanges during market hours. Since they are backed by physical gold, they provide a transparent and cost-effective alternative to traditional gold investments.
The price of a Gold ETF is directly linked to international gold prices and domestic factors like currency exchange rates and demand-supply dynamics. Unlike physical gold, Gold ETFs are free from making charges and purity concerns, ensuring fair pricing.
| Feature | Gold ETFs | Physical Gold | Sovereign Gold Bonds (SGBs) |
| Liquidity | High | Moderate | Low (Lock-in period applies) |
| Storage Costs | No | Yes | No |
| Purity Concerns | None (99.5% pure) | Possible | Not applicable |
| Interest Earnings | No | No | Yes (Fixed interest rate) |
| Tax Benefits | Yes (on LTCG after 3 years) | Limited | Exemptions on maturity |
| Tradability | High | Low | Moderate (Can be traded after lock-in) |
The pricing of Gold ETFs is determined by the prevailing gold prices in the market. Since Gold ETFs are backed by physical gold, their value fluctuates based on global and domestic gold prices.
Before investing in Gold ETFs, you should consider the following factors to make informed decisions:
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Here’s a more detailed breakdown of how to buy and invest in Gold ETFs in India:
Gold ETFs are traded on stock exchanges, just like shares. To invest, you need:
Before investing, research and compare different Gold ETFs based on:
Investing in Gold ETF offers several advantages over traditional gold investments and let’s have a quick look at how;
While Gold ETFs provide a cost-effective alternative to physical gold, they do involve certain fees and expenses that investors should be aware of. These charges include:
The expense ratio is an annual fee charged by the fund house to manage the ETF. It covers administrative costs, fund management, and operational expenses. Typically, this charge ranges between 0.5% to 1% of the investment value, making Gold ETFs more affordable than actively managed funds.
Since Gold ETFs are traded on stock exchanges, investors need to pay brokerage fees when buying or selling units. The brokerage fee varies based on the broker and the volume of trade, usually falling between 0.01% to 0.5% per transaction. Choosing a discount broker can help minimise these costs.
To hold Gold ETFs, investors must have a Demat account, which incurs:
Unlike stocks, Gold ETFs do not attract STT, making them more cost-effective compared to direct equity investments.
Goods and Services Tax (GST) of 18% is applicable on brokerage fees and transaction charges.
Most Gold ETFs do not impose an exit load, meaning investors can redeem their units without any additional charges. However, it’s always advisable to check individual fund policies.
Investing in Gold Exchange Traded Funds (ETFs) in India offers a convenient and secure way to gain exposure to gold without the challenges of physical storage. To make informed investment decisions, it’s essential to consider several key factors when selecting a Gold ETF:
Carefully evaluate these factors to select a Gold ETF platform that aligns with your investment objectives and offers a balanced approach to gaining exposure to gold. In case you’ve been looking, Pentad is one of the best Gold ETF platforms in India.
Investing in Gold Exchange Traded Funds (ETFs) offers several advantages over purchasing physical gold, particularly in the Indian context. Here are key reasons to consider Gold ETFs:
Market Accessibility: Gold ETFs provide exposure to the performance of gold without physical possession, allowing for easier portfolio diversification and investment management.
While physical gold holds cultural significance and offers the advantage of tangible ownership, Gold ETFs present a modern investment avenue that addresses many of the logistical and financial challenges associated with physical gold. Investors should assess their objectives and circumstances to determine the most suitable form of gold investment.
Pentad Securities is an Online Share Trading and Investment Broker in India, that specialises in goal-based investing to help clients achieve their financial objectives.
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Equity is nothing but part ownership in a company. Equity trading in the share market refers to the buying and selling of company stocks or shares. Each country has its own organised market, known as a stock exchange, where listed company shares are traded.
Have you ever considered equity trading as an investment option? It’s a popular choice for individuals and mutual funds. This article will explore the advantages, risks, mechanics, and everything else you want to know about equity trading.
An equity market serves as a platform for the trading of stocks and shares of companies. These equities can be traded either over the counter or on stock exchanges.
In India, the primary stock markets are the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). The BSE holds the distinction of being India’s oldest stock exchange. Both exchanges operate under the regulatory oversight of the Securities Exchange Board of India (SEBI). Notably, the Sensex and Nifty stand as two prominent market indexes in India, offering insights into the overall performance of the Indian stock market.
To engage in equity trading, individuals require both a Demat Account and a Trading Account. Once these accounts are in place, investors can place bids for stocks at specific prices. If the bid price matches the asking price set by sellers, a trade is executed. In instances where multiple investors bid for the same stock, the highest bidder secures the trade.
The fluctuations in stock prices can be influenced by various factors. For instance, increased demand for a particular company’s stocks can drive up prices, while an abundance of sellers can lead to a decrease in stock prices.
Understanding the eligibility criteria, here are some key considerations:
Eligibility for equity trading typically extends to various entities, including:
The following points highlight the various benefits that equity investments offer to investors seeking long-term growth and income opportunities.
This table highlights the key differences between stocks and equity, including their definitions, scope, types, ownership, income potential, voting rights, liquidity, risk factors, and transferability.
| Aspect | Stock | Equity |
| Definition | Represents ownership in a specific company. | Represents ownership in any company or asset. |
| Scope | Refers to shares issued by a corporation. | Encompasses ownership interests in various assets such as stocks, real estate, or mutual funds. |
| Types | Common stock, preferred stock. | Includes various forms such as common stock, preferred stock, partnership interests, etc. |
| Ownership | Shareholders hold ownership of the company. | Equity holders possess ownership in assets or companies. |
| Income | May entitle shareholders to dividends. | Can generate income through dividends, capital gains, or distributions. |
| Voting Rights | Typically carries voting rights in corporate matters. | May or may not include voting rights, depending on the type of equity. |
| Liquidity | Generally traded on stock exchanges, providing liquidity. | Liquidity varies depending on the type of equity and asset class. |
| Risk | Subject to market volatility and company-specific risks. | Risk level depends on the type of equity and underlying asset. |
| Transferability | Stocks are easily transferable through stock exchanges. | Transferability varies based on the nature of the equity and legal restrictions. |
Starting to trade in equity involves several steps. Here’s a general guide to get you started:
Remember that trading in equity requires careful planning, discipline, and continuous learning. Start with small investments and gradually increase your exposure as you gain experience and confidence in your trading abilities.
For beginners, the best type of equity trading is typically long-term investing in fundamentally strong companies. This approach, often referred to as buy-and-hold investing, involves purchasing shares of well-established companies with solid track records, strong financials, and promising growth prospects. Long-term investing allows beginners to avoid the complexities of short-term trading strategies and focus on building a diversified portfolio of quality stocks that can potentially deliver attractive returns over time.
Traders often lose money in equity markets due to:
To reduce risk in equity trading, consider the following strategies:
“Equity trading” and “Trading on equity” are two distinct concepts in finance:
| Concept | Equity Trading | Trading on Equity |
| Definition | Buying and selling shares or stocks in publicly traded companies. | Using borrowed funds, such as debt or preferred stock, to finance investments in a company’s equity. |
| Objective | Generating capital gains or income from dividends. | Increasing the return on equity investment by leveraging borrowed funds. |
| Nature | Involves trading ownership stakes in companies through stock exchanges. | Involves using debt to magnify returns on existing equity investments. |
| Risk | Involves risks associated with market fluctuations and company performance. | Amplifies both potential gains and losses, increasing risk exposure. |
| Example | Buying and selling shares of Apple Inc. on the stock market. | Using a loan to purchase additional shares of Apple Inc., aiming to increase return on equity investment. |
| Aspect | Pros | Cons |
| Potential Returns | Offers the potential for capital appreciation and high returns over time. | Subject to market volatility and potential for losses. |
| Diversification | Allows for diversification of investment portfolio, spreading risk. | Diversification does not eliminate risk entirely; all investments carry some level of risk. |
| Liquidity | Equity markets are highly liquid, allowing for easy buying and selling of shares. | Liquidity can vary depending on market conditions and specific stocks. |
| Ownership Rights | Provides shareholders with ownership rights, including voting privileges. | Shareholders may have limited influence on corporate decisions. |
| Income Potential | Offers opportunities for dividend income and other forms of distributions. | Not all stocks pay dividends, and income is not guaranteed. |
| Market Access | Provides access to a wide range of investment opportunities and sectors. | Requires knowledge, research, and understanding of market dynamics. |
| Growth Opportunities | Equity investments offer the potential for long-term wealth accumulation. | Requires patience and discipline, as returns may take time to materialise. |
| Transparency | Offers transparency through regulatory disclosures and financial reporting. | Market transparency can be affected by factors like insider trading and market manipulation. |
1. Is fundamental analysis more accurate than technical analysis?
It depends on the investor’s strategy and the market conditions. Both approaches have their strengths and weaknesses, and some investors use a combination of both for a more comprehensive analysis.
2. What is ‘Growth’ in the Equity Market?
“Growth” in the equity market refers to the increase in a company’s earnings, revenue, or market value over time.
3. What is stop-loss in equity trading?
A stop-loss is a predetermined price level set by a trader to limit potential losses on a stock position.
4. Are stocks and equities the same?
Yes, “stocks” and “equities” are often used interchangeably to refer to ownership shares in a company.
5. What Is Equity in NSE?
“Equity” in the National Stock Exchange (NSE) refers to ownership shares of publicly traded companies listed on the exchange.
6. What Are Equity Trading Holidays?
Equity trading holidays are days when stock exchanges are closed, and equity trading activities are suspended.
7. What Are the Timings of the Equity Market?
The equity market in India operates on weekdays from Monday to Friday. The regular trading hours are from 9:15 AM to 3:30 PM Indian Standard Time (IST), with pre-market and post-market sessions also available for certain activities.
How to do stock market investments? Before learning, how should we approach stock market investing? Let’s rapidly review the stock market. The stock market is a marketplace where transactions (buying and selling shares) involving listed companies take place. It is a market for publicly traded corporations, and supply and demand decide the price of the stocks. For purchasing and selling shares, India has two stock exchanges: Bombay Stock Exchange and National Stock Exchange. Understanding the tactics and procedures used in stock market investing might help aspiring investors. Please take note of the methodical process for choosing investments that are in line with your financial objectives.
Long-term wealth accumulation through stock market investing is possible, but it requires knowledge, research, and a disciplined approach. You may improve your chances of succeeding in the stock market by establishing clear goals, diversifying your portfolio, and maintaining knowledge. Do not forget that investing is a journey; with time, experience, and persistence
Insurance is never an investment, rather a protection against risks and contingencies.
Though it may seem like a raw deal, it is in fact not about life but about death. Have doubts? Then, have a look at term insurance in which the family does not get paid if the insured is alive after the term. Be it medical insurance where your medical expenses get covered or vehicle insurance in which your vehicle receives accident coverage, life insurance is all about getting the damage cover for your life.
However, people nowadays insist they get their money back in life insurance.
Though term insurance is regarded as one of the most effective forms of insurance given its lesser premium and bigger sum assured, it is dumped by many as they lose money if the insured is alive after the term.
However, taking term insurance along with an SIP will be an effective form of investment.
Here, let us look at the case of a 30-year-old healthy person who invests in two ways- in a term insurance along with an SIP & in a traditional policy. Studying this, let us calculate the approximate amount of premium and returns he will receive in both these cases.
If he takes a traditional policy with a sum assured of 1 crore, the premium will be around 3, 54,000 per annum and in 31 years, he will have paid 1, 090,000. After the maturity period, the insured gets 2, 570,000 including the bonus amount of 1,570,000.
On the other hand, if he takes a term insurance of 31 years for a sum assured of 1 crore, the premium he will have to pay is 10,000. In 31 years, he will have paid 3, 23,000.
Let us see what happens when he joins an SIP along with this term Insurance. If he does an SIP of 3, 44,000 per annum for 31 years (subtracting 3,54,000-10,000), investor gets a return of 9 crore approximately at the end of 31 years, which is a surplus of 6.7 crore if compared to a traditional policy.
Planning your Term Insurance with an SIP (Systematic Investment Plan)will always give you the edge over doing things conventionally. But let us also not be blinded by the benefits of a traditional policy.
SIP or Systematic Investment Plan has been gaining immense popularity in the financial mainstream these days. There is a huge increase in people who want to know about it and invest in it. Questions are being asked on how to go about in a SIP, best available mutual and equity funds with SIP plans and expected returns.
It is an investment process in which people invest a specific amount in an instrument on a daily, weekly or monthly basis. SIP on a monthly basis has always been the most preferred option. Though people mostly do SIP in mutual funds, it can also be done in direct equity with the help of brokerage firms.
Identifying a suitable mutual fund is the basic step while making a SIP investment. Once you’ve identified, you can provide a mandate to the bank for SIP payment following which money will be deducted automatically. Thus, the process of saving and investing is done at the same time.
Mutual funds such as LIC mutual fund, Reliance mutual fund etc provide daily SIP plans.
Daily wage workers or anyone who gets paid daily will find these useful as the money they receive everyday can be saved and invested instantly.
Some of the advantages of this process are:
It is also important to choose the right investment
For that to happen, one must have a clarity on the purpose of investment, holding period and risk capability. Once the question of what to choose is answered, the work is half done. Once you have made the investment, make sure it is supervised and necessary changes are made every three months.
Once you have decided to invest in mutual funds, the next step must be to increase your knowledge in stock market investments. However, unless you’ve gathered enough experience and knowledge around Mutual funds personally, never manage the mutual fund investments all by yourself. There are advisors or experts who will help you do that.
Honestly, it is not just about knowledge or expertise; there must be ample time at your disposal to monitor the funds. So, even if you seek an expert’s help, gain as much knowledge as possible about the whole process which will help you understand the decisions of your advisor.
Here are some tips that can be followed while doing investments.
Follow these tips and prepare yourself before venturing out into the world of stock market investing.