Time Value of Money Time value of money implies that money paid or received in the future are different from the money paid or received today. This is one of the most important concepts in finance. It implies that money paid or received in the future are different from the money paid or received today.…
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In investment world, returns is a big deal. It probably gets more attention than almost any other metric out there, and occupies the largest mindshare among most investors. As an investor, you should be aware of 2 commonly used metrics which are used to represent returns. They are CAGR & XIRR. In this episode, we…
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Rebalancing is a simple technique of adjusting % of holdings of various asset classes. Rebalancing is not an one time activity and it should be an on-going process. So we need to maintain the allocation by rebalancing at times. In simple terms, we go to gym to get fit, shed extra weight. Periodically rebalancing your…
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How dividends are handled by mutual funds? Equity Mutual Funds primarily invest in stocks of various companies. So from time to time, the Mutual Fund can receive dividends from one or more of the companies it has invested in. The dividends received by a Mutual Fund do benefit investors even though the money is not…
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What is a dividend? And How to make best use of it? Everyone deserves reward for hardwork. After a long day’s work, there is no better reward than a nice steaming cup of tea/coffee. Likewise companies also give out rewards to those who show trust and invest in their company. This reward is called a…
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Difference between Bonus issue & Stock Split We often hear in the news that some XYZ company has announced bonus shares to its investors and some other company is going for stock split. Sometimes, we also see that whenever a company announces Stock Split or Bonus Issue, it will have an immediate impact on stock…
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What are bonus shares? And How it benefits Investors? What are bonus shares? Just as the name suggests, they are extra shares given along with the shares you already own of any company. This bonus is very simple, it means a free share. Any company, from time to time, declares a bonus share instead of…
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What is stock split? and how stock split works? I’m eating a cookie. But just because I’m breaking it into two, doesn’t mean I’m going to share it. Both pieces still belong to me. Both are going to end up in my stomach. Likewise, breaking a cookie into 2 doesn’t make it into 2 cookies…
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I just read a very interesting story in which a shop owner loved his products so much that he went back to his customers and bought them all back. I’m sure this sounds very strange to you but in the stock market, it happens quite often. This process is called a share buyback. So today,…
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What is Rights Issue? And Why you should never miss a rights issue? Rights issue is one of the way to raise funds for publically listed companies. Through this mode, the company makes an offer to existing shareholders to buy additional shares in the company at a discounted price (rights offer price) within a prescribed…
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