Stock Advisory Service: Your Stock Investment Insurance
Stock Advisory Service: Your Stock Investment Insurance
Jun 22, 2018 | 18:01 PM IST
Jun 22, 2018 | 18:01 PM IST
Stock investment is messy. Yes, there is a big growth potential but if you are doing it on your own and you don't have the experience of fundamental analysis, it can be an uphill task. That is one of the reasons why most of the investors who understand the potential of equity, invest in the equity mutual funds instead of direct equity. A mutual fund is an ideal solution but it still falls short to match the towering growth potential of direct equity investment. Even the best of the best mutual funds can't give you more than 16% annualised returns. That's good enough but in direct equity, some stocks can comfortably surpass the best performance of the best mutual fund.
Why Do You Need Equity Investment?
Money is important to live a happy life. From education to health to leisure we need money in every walk of life. But the important question is not how much many money you need for all these things, the important question is - what are you doing to get the utmost value of your money? Investment plays a huge role in amplifying the value of your capital. If you choose right investment avenues you will get good value. Unfortunately, a majority of people don't make right choices. They waste their money as well as time.
If you are young professional you have to understand the power of equity to live the life your dreams.
There are two ways of investing in equity - mutual funds and stock investment. It can't be said conclusively that one method is better than other. There are pros and cons for both. As a smart investor, you have to get the best of both. Here's how you can do that.
The mutual fund route to equity is easy. You have to find the best performing fund and start investing it on a long-term basis. The only challenge that you might face is that there are a lot of funds and often with confusing names. The best way to go about this challenge is to go for regular funds through a mutual fund distributor. This way you can nullify the risk of choosing a wrong fund.
The bigger challenge is to find an ideal way to invest in the stock market through which you can minimise risk (if not, totally nullify).
If the only roadblock is research and analysis of stocks, that can be easily taken care of with the help of a stock market advisory firm. Signing up for a good, SEBI registered advisory company is like hiring a personal stock advisor. Following are some of the features which of a stock advisory firm.
Stock Screening To Pick The Best Stock At The Right Time
The stock market is huge. All sort of stocks ranging from blue-chip stocks, midcaps to small-cap are listed on both the indexes i.e. BSE & NSE. To find the stocks which are good and will perform well in the future needs skills. One has to separate quality stocks from the overwhelming junk that occupies most of the space
To identify the best stocks with the best prospects one needs years of experience and top-notch analytical skills. Naturally, not everybody has the financial acumen to do their own analysis. Thus, it makes sense to sign up with a good share market advisory firm as genuine, well-researched stock advice it will heighten your chances of getting good returns from the stock calls provided by their research analysts.
Build An Investment Plan To Meet Your Financial Goals
The work of an advisory firm is not only limited to finding undervalued stocks for their clients. They assume a bigger role of designing an investment plan which perfectly complements the financial goals of the clients. Every individual has a long-term and short-term financial goals and they have to manage their money wisely to meet these goals. An advisory firm plays a key role in giving goal-based clarity to their clients with short-term and long-term stock calls. They also provide answers to difficult questions like 'where to invest', 'how much to invest', etc. Providing customised investment plan is the salient feature of stock advisory firms.
Tried & Failed? Get Your Existing Holdings Reviewed From Experts
Usually, every person who knows the potential of equity, in the beginning, tries to manage his stock investment on his own. Only to realise that it's too complicated to handle. When such people turn to an advisory firm they already have some stock holdings. The good thing is that advisory firms offer the service of reviewing your existing holdings. Through this exercise, it becomes easier to do away with bad investments and build on good investments, it there are any. From here onwards an advisory takes an active role. They keep a close eye on all the open calls and give periodical updates of what to hold and what to let go. It is critical because any form of investment needs to be monitored on regular basis to understand its performance and growth.
Get Informative Research Reports For Investment Rationale
One of the best qualities of an advisory firm is that all every stock call comes with a research report which carries in-depth study of the fundamentals of the proposed stock. It explains all the positives that the analysts see in a company. It's an important document which helps subscribers understand the investment rationale. The key constituents of a research report are the analysis of the market capital and management of the company, financial ratios of the stock, YoY sales and margin growth, debts of the company, etc. These details help investors get an insight of the company and its growth prospects.
Customised Service Experience
One of the key features of a stock advisory company is that they provide a personalised experience to their clients. Most of the firms let their clients interact with the stocks analysts for stock suggestions and strategy discussions. This helps to understand the needs of the clients and to design the best investment plan to meet their short-term or long-term financial goals. Furthermore, you get an expert advice on all your queries related to investment.
However, if just getting stocks calls and research reports are not your ideas of personalised service there is a level above it - Portfolio Management Service.
Portfolio Management Service - Portfolio Management Service (PMS) is like a backdoor entry for those investors who don't have the working knowledge of stock market. PMS allows you to reap advantages of equity with the help of professionals.
Benefits Of Portfolio Management Service
Signing up for a PMS can make your life a lot more easy and rewarding. Here are some of the highlights of getting professional help to manage your portfolio.
Highly Skilled Management
PMS provides professional management of portfolios with the objective of achieving steady long-term performance while managing risk.
Regular Performance Tracking
The portfolio managers understand the dynamics of equity as an asset class. Therefore they are the best people to be in control of your investments with the focused view of maximizing the profits.
Being professionals, you can expect highly thought out investment strategy which acts as a guiding principle in establishing your investment universe. Also, apart from the working knowledge of the market, PMS providers are well-equipped with state-of-the-art portfolio management software and technologies that help the buying/selling, monitoring and the risk management processes.
Highly Convenient For Retail Investors
Managing your own portfolio can be a hack of work. You have to keep track of many things. At the same time, there are many things which can potentially have an impact on your investment. The best part of a Portfolio Management Service is that it relieves you from all the day-to-day hassles of stock investments. On top of that, you get all the updates through periodic reports on the performance and other aspects of your investments.
The core of PMS is that someone is taking investment decisions on your behalf. But that doesn't mean you are not in control of your investment. To make your experience fully transparent, the advisory firms shares regular account statements and performance reports with you. Not just that, you get the web access of your portfolio which enable you to track all information in real time. With portfolio access, all your investments and statements are just a click away, literally. You also get half-yearly and yearly reports for tax filing.
A Relationship Manager At Your Service
To build a smooth line of communication with any agency it is important to have a single point of contact. Portfolio Management Service providers assign dedicated relationship manager to all their clients. This helps to personalised service and to understand the financial goals of every individual. The relationship managers make sure that you get periodic updates and account performance reports on time.
Extremely Personalised Service
In PMS, you get personalised service as you get direct access to professional stock analysts and money managers who actively handling your portfolio. You are always in the know of all the investment strategies employed for your account. This interaction may come in different forms including in-person meetings, conference calls, etc with the fund management team.
Is PMS Better Than Mutual Fund?
It is natural for most of you to think if the PMS is so rewarding then why invest in equity mutual fund at all? That's a valid question. But we have to understand why one invests in mutual funds. The objective of equity mutual fund is to disregard the market cycles and keep on investing a certain amount on a regular basis. On the other hand, PMS is more time sensitive. Here the portfolio manager has to directly answer the clients and have to produce good returns regardless of how the markets are behaving. Therefore, if you have subscribed to PMS, you will not have the liberty of being carefree. You will have to take tough decisions but you will have experts to guide you through.
Let's understand the clear distinction between mutual fund and PMS.
|Portfolio Management Service||Equity Mutual Fund|
|Methodology||Skilled portfolio manager manage your portfolio which makes the process hassle-free for layman investors. These professionals are equipped with in-depth research and study of global and domestic market situation. Also, they continuously monitor your stocks which is impossible for retail investors to do.||The mutual funds are monitored by fund managers. Unlike PMS, in a mutual fund, all the money is pooled from various investors and goes in a single portfolio of the asset management company.|
|Good For Whom?||Gives exposure to direct equity investment. It's a product designed to prevent retails investors from making common stock investment errors. Retail investors tend to get swayed by the emotions and lack the skills to carry out research and analysis on their own. For such investors, PMS is the best service.||Gives you indirect exposure to equity. Thus, its best for those who dont have big capital ready and prefer to build their corpus brick by brick.|
|Charges/Fees||Fees/subscription of PMS are negotiable. There are some companies which have the standard charges while some prefer certain percent in profit. In any case, there is no entry or exit load in PMS. One can start and stop the service anytime he/she likes.||The fees for a mutual fund are adjusted from your corpus. All the Asset Management Companies (AMCs) have to adhere to the regulations set by SEBI. The entry load has been totally abolished but all the mutual funds come with a condition of exit load. Exit load has to be borne by the investors if they exit the scheme within a certain period (Mostly, 1 year) of entering the scheme.|
|Conditions||SEBI has laid out guidelines for PMS. The minimum investment required for subscribing a PMS product is Rs.25,00,000. There is no upper cap.||The investor needs to be KYC compliant. Apart from this there are no significant conditions.|
A Pro Tip - As a smart investor, you should invest in mutual funds but it doesn't hurt to keep your big chunk of money in PMS instead of fixed deposits.
What If You Don't Have Required Capital For PMS?
PMS is the best way to get the hands-free equity investment experience but it comes with rigid conditions. You need to have at least 25 Lac capital to avail the service. Then what if you need the same service for your investment but don't have minimum required capital?
Niveza p360. is your one-stop solution to get personalised research service. Here all you need is a demat account and minimum 2 lac capital.
Niveza Editorial Desk :
We are a team of stock market nerds trying to stay ahead of the herd. We spend our grey cells everyday to a pave a smooth road for our clients in the shaky world of stock market. While tracking the mood swings of the market we bring our clients the most rewarding deals.
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