HOME LOAN : THINK SMARTLY

Think smart...

Invest smartly..

Dear friends,

You all must be paying home loan EMI for your dream home. It pinches a lot. Ever thought of a way to get all the principal and interest back.

Is it possible. How?

If interested, read on...

Invest 20% extra of your Home Loan's EMI in mutual fund Equity SIP and all your home loan principal and interest will recovered with profit in 20 years.

Example: For Home Loan of 20 Lac for 20 Years with ROI 10.50%EMI will be Rs. 19,968.

In 20 Years one will pay total towards HL Rs. 47,92,930. 

Interest: 27,92,930 &

Principal: 20 Lac

For SIP of 4000 for 20 Years with just 15% expected return, Fund Value will be Rs. 6063821

(SENSEX has given avg return 20.4% in Last 36 years from 1979 to 2015)

Thus you get back all your principal and interest back and plus earn a cool profit of around Rs. 1300000..

Happy Investing..

BREXIT

What is 'Brexit'?

It's the issue of whether Britain should exit the European Union or not — a question that will be decided in a historic referendum on June 23. 

What is happening?

A referendum to decide whether Britain should leave or remain in the European Union.  Prime Minister David Cameron promised to hold one if he won the 2015 general election, in response to growing calls from his own Conservative MPs and the UK Independence Party (UKIP), who argued that Britain had not had a say since 1975, when it voted to stay in the EU in a referendum. For a start, those wanting Britain to leave the EU see it as an opportunity to reassert British national sovereignty and in a sense liberate Britain from the bottlenecks of EU both politically and financially.

What is the European Union?

The European Union - often known as the EU - is an economic and political partnership involving 28 European countries . It began after World War Two to foster economic co-operation, with the idea that countries which trade together are more likely to avoid going to war with each other. It has since grown to become a "single market" allowing goods and people to move around, basically as if the member states were one country. It has its own currency, the euro, which is used by 19 of the member countries, its own parliament and it now sets rules in a wide range of areas - including on the environment, transport, consumer rights and even things like mobile phone charges. 

Why do they want the UK to leave?

They believe Britain is being held back by the EU, which they say imposes too many rules on business and charges billions of pounds a year in membership fees for little in return. They also want Britain to take back full control of its borders and reduce the number of people coming here to live and/or work. One of the main principles of EU membership is "free movement", which means you don't need to get a visa to go and live in another EU country. They also object to the idea of "ever closer union" and what they see as moves towards the creation of a "United States of Europe".

Advantages of Brexit 

Economically, Britain would immediately save $12 billion a year in EU budget payments. Freed from famously cumbersome EU regulations, Brexit supporters say, Britain would attract greater investment and become a more dynamic economic hub — particularly if it still had full access to the EU's tariff-free single market. But that's a big if, and would rely on Britain renegotiating a new trade deal with the EU's remaining 27 member states — many of whom, post-Brexit, would want to make a bitter example of the U.K., to discourage other members from fleeing.

Under the EU's labor rules, any citizen of a member state has the right to live and work in another member state — a rule that has allowed some 942,000 Eastern Europeans to move to the U.K. as the EU has expanded its borders. Brexiters say these migrants have overwhelmed the housing system and abused Britain's generous in-work benefits. At least 34,000 of them are getting child benefits for children who do not even live in the U.K. and sending that money — totaling about $42 million a year — back to their home countries. Leaving the EU would allow Britain more control over how many migrants are allowed to enter. That's become a big selling point after the influx of 1 million refugees into EU countries.

Risks of a Brexit

The uncertainty it would create could destabilize the markets and cause the pound to plummet.  Some extreme predictions are  that a Brexit will blow a £100 billion hole in Britain's economy, and Britain will lose 3 million jobs!

What will the referendum question be?

"Should the United Kingdom remain a member of the European Union or leave the European Union?

The two campaigns, "In " and "Out", are likely to form the offical lobby groups for each side in the referendum have set out their positions on the main topics that will form the basis for the referendum.

IIF Chief Warns “Brexit Bigger Threat To Global Economy Than Lehman”

As Brexit appears to gathering pace among British voters,  Hung Tan, executive managing director at the Institute of International Finance in Washington, DC., to understand the global impact of a decision by Britain to leave The EU…

Q: What would happen if Britain voted to leave the EU?

A: It is not Lehman in the short term in terms of markets being in a panic or chaotic mood, because the central banks will try to pacify that. But it is more significant than Lehman in its longer-term impact on global growth. Through trade and investment channels, there will be a downward impact on growth.

Q: Isn’t it just a European issue?

A: It’s not just a vote for the U.K. exiting Europe, it is a symptom of the discontent and unhappiness of citizens with the status quo. They want change, but nobody can articulate what is it that they want. The impact in an exit vote of “leave” winning would be very far-reaching and impact long-term events. Near term there would be significant adjustment in financial markets.

Q: How much could markets move?

A: The Bank of England, ECB and others have said they are prepared to supply a significant amount of liquidity just to calm the volatility. Over a week’s time [after the vote], I think it would reach some kind of lower equilibrium.

Q: What would central banks buy?

A: The Bank of England so far has bought U.K. gilts and they may want to look at high-grade corporate bonds. If they feel they may have exhausted buying in a certain asset class, they may want to widen the list of assets that they are able to buy.

Q: Which countries would suffer most if the U.K. voted to exit?

A: First the U.K. and Europe, but then emanating from there to trading partners of Europe, and then to emerging market countries through the decline in world trade. Large economies able to rely on domestic consumption and the services sector should be able to generate a measure of growth and cope with it better than others. More open economies that have been reliant on world trade as a growth model will suffer more.

Q: What happens to the U.K. after exit?

A: Whatever new arrangement the U.K. may manage to have — the Norway model, the Switzerland model, or relying on the WTO to manage its relationship with the EU — is very problematic. All of those still require U.K. firms to observe and respect EU rules if they want to do business in the EU.  Most important for the City of London, financial services passporting will be either not available or significantly curtailed.

Q: What’s the U.K. economic impact?

A: The true problem is uncertainty causing loss of business confidence and further decline in capital expenditures and investment. That would reinforce the collapse in productivity — which is very pronounced in the U.K. — and make for an even worse outcome in terms of potential growth.

Q: How does it affect the EU?

A: If you put the Brexit vote against a very clear decline in trust and confidence of the citizens of Europe in the EU and its institutions, and the rise in populism and anti-Brussels, anti-EU, anti-integration sentiment, the contagion risk of a successful Brexit vote will be quite

damaging. Periphery countries have undergone a lot of adjustment after the crisis. The cost of fiscal consolidation is perceived to be quite significant and unfairly distributed, so there could be a lot of discontent, and that will support the further rise of populist poltical movements.

Q: What does Brexit mean for trade?

A: The mood is anti-immigration and anti-free trade.In the past year, more than 500 trade protectionist measures have been implemented by governments worldwide, more than twice the number of such measures two years ago. Against ths anti-immigration, anti-free trade public mood — even here in the U.S. — the risk of a further increase in trade protectionism is high.That would continue to depress the growth of world trade, which actually fell in volume terms by 1.6 percent, year-over-year in the first quarter.

Q: How significant was that?

A: There has been some small decline, particularly after 2008-2009, but this is one of the rare instances of outright decline.

Q: Do you expect Britain to exit?

A: I’m an Anglophile, so I believe in their basic reasonableness. I think that reason will prevail — that’s the hope. Everything we have seen in the past 10 days seems to be suggesting that the momentum for “leave” is really accelerating, so that is worrisome.Another lesson we learned in elections is that big momentum is what tends to carry the day.

Just more proxy-scaremongery? Unclear at the moment but markets are certainly acting like this is the case.

But in a new and improved way to scare people, UK Chancellor George Osborne ‘warned’ that taxes would have to rise if Britons voted to leave The EU…

Reduced trade and investment would leave a 30 billion pound ($42 billion) “black hole” that would have to be plugged by increased taxes and cuts to spending on health, education and defense, Osborne is set to say in a speech on Wednesday. The increasingly confident “Leave” campaign will meanwhile be talking about its agenda should it win, pledging legislation to restrict free movement and reduce the influence of EU judges, with the goal of negotiating a so-called Brexit by 2019.

While they’re talking about the next four years, the focus of both sides is the eight days until the June 23 vote. The goal of “Leave” is to reassure voters that departure from the EU would be swift but controlled. Osborne’s aim is to convince waverers that it will hurt

How is Mutual Fund's NAV calculated?

Say, during an NFO (New Fund Offer), an investor (named 'A') invested Rs. 100 and another investor (named 'B') invested Rs. 200. So total assets available with fund manager is Rs. 300. As during NFO a unit costs Rs. 10, 'A' will get 10 units of fund (100/10) and 'B' will get 20 units of fund (200/10).

Then say after an year that Rs. 300 (total funds collected during NFO) becomes Rs. 600 (as fund manager really managed the fund well).

Let us assume that no new investor has invested into the fund and existing investors did not make any redemption in the meantime. Hence total number of units remain same - 30 - 'A' is holding 10 units and 'B' is holding 20 units.

Then fund's NAV will be 20 (Current value of total assets / number of units i.e. 600/30).

So each unit's value (NAV) has changed now from 10 to 20. 'A's investment of Rs. 100 is now worth Rs. 200  (No. of units held × each unit's value i.e. 10 × 20) and 'B's investment of Rs. 200 is now worth Rs. 400 (20 × 20).

Now, let us assume that a new investor (named 'C') invests Rs. 100 into this fund. 'C' will get 5 units (amount invested / NAV i.e. 100 / 20).

So now total value of assets is Rs. 700 (600 + 100) and total no. of units is 35 (30 + 5).

NAV remains same: 20 (700 / 35)

Now, let us assume that existing investor 'B' redeems Rs. 200 from this fund. 'B' is actually redeeming 10 units (amount redeemed / NAV i.e. 200 / 20).

So now total value of assets is Rs. 500 (700 - 200) and total no. of units is 25 (35 - 10).

NAV remains same: 20 (500 / 25)

So when value of total assets changes in proportion with no. of units then NAV remains same.

When value of total assets changes not due to change in no. of units but due to market forces - then only NAV changes.

So movement of NAV only indicates the performance of a particular fund, nothing else. Lower NAV does not mean that a fund is available at cheap price or higher NAV does not mean that a fund is costly.

*The costs and expenses of the fund, such as management fee and operating expenses (registrar and transfer agent fee, marketing and distribution fee, audit fee and custodian fee) are deducted from total value of assets while calculating the NAV. This is not considered in the above example for the sake of simplicity.

Rs 1L = 72 L in next 5 years

It's not easy to strike gold in stocks. But it's quite common to miss out on opportunities. 

Multibagger stocks are a rare breed on Dalal Street, but they remind you of the power that equities wield. 

"There is a higher possibility that a steady investor would receive positive payoffs over time. If history is any indicator, the possibility of negative returns on stocks is almost zero with a 15-year investment horizon," 

 

Five years ago, had you to invested Rs 1 lakh on Indo CountBSE -1.02 %, it would have made you Rs 72 lakh today. Avanti FeedsBSE -1.34 % could have generated about Rs 62 lakh on that investment and 8K MilesBSE -2.52 % Software Rs 47 lakh. 

These are very real wealth creation stories, and not just talk without substance. 

Indo Count reported a 15 per cent volume growth in the March quarter of FY16, which helped its revenue grow 15 per cent. Brokerage firm Systematix expects it to post 29 per cent annualised profit growth in FY16-18 and has a buy rating with target price of Rs 1,373. 

Sandeep Raina, Deputy Vice President, Edelweiss, believes Indo Count can still be a multibagger despite the huge returns it has generated so far. "The growth is there, the Market is there. Financials are very strong. I think the company can be a multibagger over the next two-three years," he said 

8K Miles Software, a multibagger with 4,700 per cent returns over five years, reported 109 per cent profit growth in March quarter as the company built on its recent strong performances. 

"8K Miles has got a solid product pipeline. So there is merit in looking at the stock on a fundamental basis. But the valuations have already reached a level from where incremental appreciation will be difficult," Sudip Bandyopadhyay, an independent market expert, . 

These are among the least talked about names on the Street, a place where the TCSs, Infosys and RILs of the world hog the limelight while smaller stocks like these silently churn out big returns for their investors 

Source(ET)

 

Microsoft - Linkedln $26.2 bn Deal

Microsoft said that it will acquire LinkedIn for an agreed deal sum of $26.2 billion, inclusive of LinkedIn's net cash. After the acquisition, LinkedIn will retain its distinct brand, culture and independence, according to a joint statement.

 

The statement said that Jeff Weiner will remain CEO of LinkedIn, reporting to Satya Nadella, CEO of Microsoft. Reid Hoffman, chairman of the board, co-founder and controlling shareholder of LinkedIn, and Weiner both fully support this transaction. The deal is an all-cash transaction at $196 per share at a premium of 49.5% from Friday's close. 

Microsoft said that the transaction has been unanimously approved by the Boards of Directors of both LinkedIn and Microsoft. The deal is expected to close this calendar year and is subject to approval by LinkedIn's shareholders, the satisfaction of certain regulatory approvals and other customary closing conditions. 

The transaction is expected to close this calendar year. 

The LinkedIn team has grown a fantastic business centered on connecting the world's professionals. Together we can accelerate the growth of LinkedIn, as well as Microsoft Office 365 and Dynamics as we seek to empower every person and organization on the planet. 

"Just as we have changed the way the world connects to opportunity, this relationship with Microsoft, and the combination of their cloud and LinkedIn's network, now gives us a chance to also change the way the world works. For the last 13 years, we've been uniquely positioned to connect professionals to make them more productive and successful, and I'm looking forward to leading our team through the next chapter of our story.

 

Source (Economic Times)

INFLATION AND INTEREST RATE

Interest rates are always a source of conflict. Borrowers demand low rates. Fixed Depositors desire high rates.

In such a scenario, what should RBI do? 

This was beautifully explained by the RBI Governor Dr.Raghuram Rajan with the example of Dosas.

The basic premise of Dr. Rajan's argument is quite simple - one should NOT look at the interest rates in isolation. This will give the wrong picture.

Instead, to assess whether we are better off with high interest rates or low rates, we have to consider the "inflation" factor.

Let us look at Dr. Rajan's example of Dosas to understand this link between interest rate, inflation and our well-being.

Situation on Day 1

Bank balance - Rs.1,00,000

Price of Dosa - Rs.50

No. of dosas you can buy - 2,000

Situation after 1 year

(a) Case 1 (Interest - 10%, Inflation - 10%)

Interest earned - Rs.10,000

New Price of Dosa - Rs.55

No. of dosas you can buy with interest income - 182

(b) Case 2 (Interest - 8%, Inflation - 5.50%)

Interest earned - Rs.8,000

New Price of Dosa - Rs.52.75

No. of dosas you can buy with interest income - 152

Most people look at this picture, and declare themselves as worse off with lower rates. Due to reduced interest income, they can buy less number of dosas. Hence, they always cry and crib for the higher interest rates on their fixed deposits.

This, however, is a mistake:

They fail to account for the impact of inflation on the principal amount.

Is inflation 'rapidly' squeezing the purchasing power of your money?

Situation after 1 year (with principal included)

(a) Case 1 (Interest - 10%, Inflation - 10%)

Interest earned - Rs.10,000

Total savings - Rs.1,10,000

New Price of Dosa - Rs.55

No. of dosas you can buy with interest income - 182

No. of dosas you can buy with principal - 1818

Total number of dosas you can buy - 2000

(b) Case 2 (Interest - 8%, Inflation - 5.50%)

Interest earned - Rs.8,000

Total savings - Rs.1,08,000

New Price of Dosa - Rs.52.75

No. of dosas you can buy with interest income - 152

No. of dosas you can buy with principal - 1896

Total number of dosas you can buy - 2048

Clearly, the interest rate on your fixed deposits - in absolute terms - is not relevant at all for your good financial health.

Instead, the positive difference between interest rate and inflation, is far more critical number to focus your attention on.

In Case 1, the difference between interest rate and inflation is NIL. Whereas, in Case 2 the interest income is 2.50% more than the inflation.

This is the real earning:

Since in Case 1, the real earning is nil, you can buy the same number of dosas after one year.

Whereas in Case 2, where the real earning is 2.50%, you can buy 48 "more" dosas after one year (despite earning lower interest).

Learn: Inflation Demystified

Therefore, fixed depositors should not be fixated on the interest rates alone. They should appreciate that the real value of their principal is depleting day-by-day due to inflation. 

As you can see, because of this inflation, your principal of Rs.1 lakh can buy you only 1818 or 1896 dosas after one year, as compared to 2000 on Day 1. 

This erosion in the value of your principal is a serious threat. Therefore, it should form an integral part of all your financial planning. This would enable you to live comfortably, without significantly downgrading your standard of living.

Beware : Blind Faith In Fixed Deposits Is Destroying Wealth

In fact, I often get mails from my readers that they want to quickly become a crorepati, so that they can retire and live happily ever after.

And I send them a detailed calculation, as to how they would become beggars within 10-15 years. This seemingly huge amount of Rs.1 crore would surely and steadily shrink to ZERO.

Hence, it is imperative that you must consider the (negative) impact of inflation, in your retirement corpus calculations. If not, you will be in for some serious financial trouble, in the later years of your life.

This is precisely why the central banks world over target a moderate inflation. Since inflation hurts the aam aadmi the most, RBI too focuses all it efforts and endeavours on keeping the inflation low.

Solution: How To Earn Tax-Free Risk-Free Income

You have now been forewarned about the disastrous effect of the silent killer inflation. Therefore, you must ensure that your investments earn real positive income and not just high notional interest.

Are you buying insurance blindly?

How would you feel if you invested in a scheme and, after eight years, got back less than your principal? Ask Mahesh Patwal. When he started his career in 2007, the Mumbai-based accounting professional's first investment was in a pension plan that deducted almost 30% of the premium in the first three years. He also bought a 10-year endowment policy that offered barely 5% returns. Last year, frustrated by the low returns generated by his policies, Patwal (see picture) surrendered both policies and got back Rs 1.02 lakh for the Rs 1.29 lakh he had invested 

There are thousands like Patwal who blindly buy insurance policies every year only to terminate them prematurely. India has one of the worst persistency figures when it comes to insurance. Persistency is a measure of the percentage of policies still in force. For some insurance companies in India, the 61st month persistency was as low as 5% in 2014-15. This means, 95% of the policies sold by the company had been terminated by the fifth year. A McKinsey report says that the average one-year persistency in India is 60% compared to 94% in the US (see graphic). 

Terminating a policy prematurely can lead to huge losses. Patwal lost Rs 27,000 but ET Wealth estimates his loss at over Rs 1 lakh. This is because if the same money had been put in the PPF to earn 8.5%, it would have grown to Rs 2.04 lakh by now. 

Though surrender charges on new purchases have been capped by the regulator, terminating an insurance policy still leads to losses for the buyer. "Surrendering the policy leads to losses, especially in cases of endowment plans which levy heavy upfront charges. This is why it is critical that buyers understand the features, terms and conditions of the policy before taking the plunge. Understanding the features of the plan are a must while buying the policy. "Only after understanding the product features, policyholders are able to ascertain its relevance to their needs,

They should also know that other instruments can offer the same benefits they seek in an insurance plan. For instance, PPF and taxsaving bank deposits can help save tax without charging a rupee. Similarly, ELSS funds can save tax and help build wealth at much lower costs. Take the short test on Page 4 to ascertain whether you should invest in an insurance plan. 

Insurance is not investment 

Financial planners never tire of telling their clients not to mix insurance with investment. "If a policy generates investment returns for you, it stops being an insurance policy. It will neither give you good protection nor good returns," says Sanjeev Govila, a Sebi-registered investment adviser and CEO of Hum Fauji Initiatives. 

Yet, almost everybody has an insurance plan in his portfolio. Many buyers like 

Babbu Khanka (see picture) fall into the trap because a close relative or family friend makes them buy an insurance plan from them. Khanka plans to surrender the costly but low-yield money-back plan his father's friend had sold him in 2007. He will get barely Rs 31,000 even though he put Rs 39,000 in the policy. Had he just put the money in the PPF, it would have grown to Rs 66,921 by now. 

To be fair, many insurance buyers are misled by agents and financial advisers. Banks are at the forefront of mis-selling. If you go to a branch, relationship managers pounce on you with unsolicited investment advice. This used to be a problem only in foreign establishments and private banks but now even PSU banks are indulging in these unethical practices. The hefty sales targets and lucrative earnings from commissions (sometime more than the salary) have turned relationship managers into mis-sellers of insurance

However, more needs to be done. One critical step is to ban the sharing of bank account details with the sales team. Most of the mis-selling happens because the sales team knows who has how much in his bank account. The RBI also needs to strengthen the ombudsman system and make the complaint procedure more customer friendly. 

Are buyers also guilty? 

While it is easy to point fingers at distributors, buyers can't escape blame for not doing enough research. Most are happy to let the broker take care of the paperwork. Sure, they don't have to do the tedious task of filling up the insurance form but at least check if the broker has filled it up correctly. He might have opted for plans and add-ons you don't need or given incorrect information about you. 

The next check is the welcome call from the company where the telecaller explains all the terms and conditions of the policy in detail. "These calls ensure that the buyer doesn't feel he has been missold an insurance policy," says Govila. Some companies even try to assess the needs of the customers before selling him a policy. "We have a system wherein the policyholder undergoes a detailed financial need and risk analysis, thereby identifying the best suited policy for him 

Buying a wrong insurance plan can have grave financial implications. If you are paying a huge premium for the insurance policy, you will not be able to save for other critical goals. Worse, the policy will give you a false sense of protection. If you are the sole breadwinner of the family, the cover offered by an endowment policy will not be adequate to support your family.

What your bank FD,KVP do in 8 years

If you had invested in a bank fixed deposit (FD) or Kisan Vikas Patra (KVP) three years ago, you would not have been even halfway through towards your goal of doubling that investment over eight to nine years. 

But had you invested the same money in the top 100 stocks, it would have already doubled by now. Here's how: 

On June 10, 2013, it would have cost you Rs 80,541 to buy one unit each of the Nifty100 stocks. Today, that amount would have become Rs 1.63 lakh, growing at a compounded annual growth rate of 26.43 per cent. 

"We are all familiar with the phrase, 'Do not put all your eggs in one basket'. That way, a diversified portfolio could have resulted in higher returns. One can't eliminate risks completely, but manage the risk level,". 

The return offered by the 100 stocks is higher than most fund managers managed to generate with their multicap funds during the same period. 

While sectors from banking, IT to consumer goods carry more than half of Nifty100's weightage, strong performance by some stocks priced in four digits did the trick for the Nifty100 portfolio. 

For example, Eicher MotorsBSE 0.06 %, which quoted at Rs 3,600 on June 10, 2013, has surged 5.2 times to Rs 18,800 by now. Bajaj FinanceBSE -1.16 % has surged 5.1 times over the past three years. The stock now trades at about Rs 7,700 against Rs 1,500 three years ago. 

"Some growth stocks such as Eicher Motors have performed well because of their niche businesses with dominance play. So they come with higher valuations,"

The return offered by the Nifty100 stocks was higher than a 12.88 per cent CAGR (or 43 per cent return) growth clocked by the NSE100 index during the same period. It even beat the 14.41 per cent CAGR (or 47 per cent) registered by NSE100's equal weight index during the same period. 

But had you invested the same money in the top 100 stocks, it would have already doubled by now. Here's how: 

On June 10, 2013, it would have cost you Rs 80,541 to buy one unit each of the Nifty100 stocks. Today, that amount would have become Rs 1.63 lakh, growing at a compounded annual growth rate of 26.43 per cent. 

"We are all familiar with the phrase, 'Do not put all your eggs in one basket'. That way, a diversified portfolio could have resulted in higher returns. One can't eliminate risks completely, but manage the risk level,". 

The return offered by the 100 stocks is higher than most fund managers managed to generate with their multicap funds during the same period. 

While sectors from banking, IT to consumer goods carry more than half of Nifty100's weightage, strong performance by some stocks priced in four digits did the trick for the Nifty100 portfolio. 

For example, Eicher MotorsBSE 0.06 %, which quoted at Rs 3,600 on June 10, 2013, has surged 5.2 times to Rs 18,800 by now. Bajaj FinanceBSE -1.16 % has surged 5.1 times over the past three years. The stock now trades at about Rs 7,700 against Rs 1,500 three years ago. 

"Some growth stocks such as Eicher Motors have performed well because of their niche businesses with dominance play. So they come with higher valuations,"

The return offered by the Nifty100 stocks was higher than a 12.88 per cent CAGR (or 43 per cent return) growth clocked by the NSE100 index during the same period. It even beat the 14.41 per cent CAGR (or 47 per cent) registered by NSE100's equal weight index during the same period. 

Diversification reduces stock-specific risks and gives better risk-adjusted return. 

BritanniaBSE -1.01 % Industries, Shree CementBSE 0.39 % and Bajaj FinservBSE -1.43 % are some of the other high-value stocks whose prices have surged 3-4 times over the past three years. 

 The market usually looks for companies with visible earnings growth. "As soon as they are discovered, investors start chasing them until their valuations become expensive. One should remember that many a times, investors get trapped chasing higher valuations,  "The stocks look expensive on the valuations front, "But the right way is to look at valuations vis-a-vis their growth profile, quality of franchise, earnings visibility and sustainability of margins. Hence, if one looks at these stocks on the parameters mentioned, I believe these are good investments with a long-term horizon." 

 If you had invested in a bank fixed deposit (FD) or Kisan Vikas Patra (KVP) three years ago, you would not have been even halfway through towards your goal of doubling that investment over eight to nine years. 

Diversification reduces stock-specific risks and gives better risk-adjusted return. 

BritanniaBSE -1.01 % Industries, Shree CementBSE 0.39 % and Bajaj FinservBSE -1.43 % are some of the other high-value stocks whose prices have surged 3-4 times over the past three years. 

 The market usually looks for companies with visible earnings growth. "As soon as they are discovered, investors start chasing them until their valuations become expensive. One should remember that many a times, investors get trapped chasing higher valuations,  "The stocks look expensive on the valuations front, "But the right way is to look at valuations vis-a-vis their growth profile, quality of franchise, earnings visibility and sustainability of margins. Hence, if one looks at these stocks on the parameters mentioned, I believe these are good investments with a long-term horizon."