Team-BHP > Shifting gears


View Poll Results: Stocks as a percentage of my net assets are -
0 - 25% -- I'm like the most conservative Indians. I love FDs. 301 33.71%
26 - 50% -- I have a few stocks. 394 44.12%
51 - 75% -- I'm an active trader. 134 15.01%
76 - 100% -- Hey, I'm an i-banker!!! 64 7.17%
Voters: 893. You may not vote on this poll

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Old 3rd August 2020, 10:44   #4381
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Default Re: Do you play the stock market

Quote:
Originally Posted by ValarMorghulis View Post
OK, am I missing something?
2.5% pa interest rate is even lower than current FDs. So what's the reason for investing in SGBs?
PS; Not very literate in SGBs.
Hmm, lets see. In any other way that you may buy gold, you do not get any return. You either have to pay for storing and securing it (if in physical form) or you may be subjected to taxes if & when selling at a profit in future but there is only the capital appreciation that is possible (ETFs, MFs with gold exposure, etc.)

This is the only Gold based instrument where you get both - capital gains + assured returns.

So the question is - do you want Gold in your portfolio as an investment or not?

Do not mix the consumption part of it here.
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Old 3rd August 2020, 10:47   #4382
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Default Re: Do you play the stock market

Quote:
Originally Posted by ValarMorghulis View Post
OK, am I missing something?
2.5% pa interest rate is even lower than current FDs. So what's the reason for investing in SGBs?
PS; Not very literate in SGBs.
SGBs are an alternative to physical gold. If you buy physical gold, you will get no interest at all plus the additional task of keeping it safe.

SGB will give you the benefit of appreciation in gold prices, without actually holding physical gold, the interest is pure bonus!!
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Old 3rd August 2020, 11:09   #4383
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Default Re: Do you play the stock market

Quote:
Originally Posted by sunilch View Post
...This is the only Gold based instrument where you get both - capital gains + assured returns.

So the question is - do you want Gold in your portfolio as an investment or not?...
Quote:
Originally Posted by Ferrari1976 View Post
...SGB will give you the benefit of appreciation in gold prices, without actually holding physical gold, the interest is pure bonus!!
Ahh.. thanks guys.. appreciate the quick response...
But is it advisable to invest in these SGBs considering gold is at an all time high? The last gold was even closer to present levels was around 2012 which means a decade of no return..
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Old 3rd August 2020, 11:56   #4384
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Default Re: Do you play the stock market

Quote:
Originally Posted by SmartCat View Post
If you have a such a long horizon, there is no contest - SGB wins hands down. You get 2.5% pa interest and exemption from paying long term capital gains tax.
IIRC the capital gains exemption would apply only if the SGB's are held till maturity.

Does this exemption also apply to those who purchase via the secondary market or only to those purchased via the initial offer?
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Old 3rd August 2020, 12:24   #4385
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Default Re: Do you play the stock market

Quote:
Originally Posted by ValarMorghulis View Post
OK, am I missing something?
2.5% pa interest rate is even lower than current FDs. So what's the reason for investing in SGBs?
PS; Not very literate in SGBs.
SGBs are Sovereign Gold Bonds.

For eg. Say you buy 10 gms worth of SGBs, you pay 10* current price of Gold ( say Rs 5000) so Rs 50,000. Unlike a normal bond where on maturity you get back the same amount you invested, in a SGB the maturity value will be 10* The price of gold at that time.

If the price of gold has appreciated to say Rs 7000, then on maturity you get back 10*7000 = Rs 70000.

So you are basically investing in Gold as an asset.

The 2.5% rate is just an added bonus the Govt. provides so that you invest in these bonds rather than invest in physical gold, which hurts the Balance of Payments. You don't invest in SGBs only for the interest.
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Old 3rd August 2020, 16:37   #4386
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Default Re: Do you play the stock market

Quote:
Originally Posted by anandhsub View Post
SGBs are Sovereign Gold Bonds.
For eg. Say you buy 10 gms worth of SGBs, you pay 10* current price of Gold ( say Rs 5000) so Rs 50,000. Unlike a normal bond where on maturity you get back the same amount you invested, in a SGB the maturity value will be 10* The price of gold at that time.

If the price of gold has appreciated to say Rs 7000, then on maturity you get back 10*7000 = Rs 70000.

So you are basically investing in Gold as an asset.
What if the Gold price drops at the end of 8th year ( just assumption) to a value lesser than the invested amount per gram. I am planning to invest in this, but wanted to know the What if part of it

The 2.5% rate is just an added bonus the Govt. provides so that you invest in these bonds rather than invest in physical gold, which hurts the Balance of Payments. You don't invest in SGBs only for the interest.

Last edited by Chetan_Rao : 3rd August 2020 at 21:00. Reason: Fixed broken quote tags.
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Old 3rd August 2020, 17:55   #4387
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Quote:
Originally Posted by venkikewl View Post
nandhsub;4856537]SGBs are Sovereign Gold Bonds.



What if the Gold price drops at the end of 8th year ( just assumption) to a value lesser than the invested amount per gram. I am planning to invest in this, but wanted to know the What if part of it
How is that different from investing in physical gold? If you buy today and sell later, you take the same risk with physical gold as well. Atleast here, you get a small 2.5% interest every year.
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Old 3rd August 2020, 18:01   #4388
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Quote:
Originally Posted by SmartCat View Post
If you have a such a long horizon, there is no contest - SGB wins hands down. You get 2.5% pa interest and exemption from paying long term capital gains tax. Remember that you need to pay long term capital gains tax on Gold MFs, ETFs and physical gold


.

Will tax exemption still be applicable for purchase from the secondary market if held till maturity, considering that the period for which I held the bond will be actually lower than the mandated 8 years (first few years the bond was with the primary buyer)?

Planning to invest 50% in the upcoming offer and 50% in the secondary market (opens more options for the future).

Last edited by greenoval : 3rd August 2020 at 18:05.
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Old 3rd August 2020, 18:09   #4389
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//Cross posting from the Mutual Funds thread//

Has anybody tried investing in smallcases?

https://www.smallcase.com/

The biggest advantage they claim is that you pay fees only when you transact unlike the expense ratio that you pay every year to mutual fund houses. Compared to direct stocks, smallcases are diversified and backed by professional research. They have their own customized algorithms that they run every 3 months to rebalance the basket of stocks, if required.

Smallcases: Middle ground between mutual funds and stocks
https://www.forbesindia.com/article/...stocks/58239/1
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Old 3rd August 2020, 20:44   #4390
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HDFC Bank is giving me jitters, MD has offloaded his entire stake in the bank prior to his impending retirement, number of very senior functionaries of the bank have quit in last three months, one report says 18 top executives have quit. Is it time to bid goodbye to one of the last true blue stocks in the market. Any pointers will be most welcome.
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Old 3rd August 2020, 20:57   #4391
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Default Re: Do you play the stock market

Quote:
Originally Posted by PGA View Post
HDFC Bank is giving me jitters, MD has offloaded his entire stake in the bank prior to his impending retirement, number of very senior functionaries of the bank have quit in last three months, one report says 18 top executives have quit. Is it time to bid goodbye to one of the last true blue stocks in the market. Any pointers will be most welcome.
Frankly the valuations are too high. Share price is way beyond book value. EPS growth of a peer like ICICI. PE ration of ICICI is 14.2 as opposed to 20.9
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Old 3rd August 2020, 22:47   #4392
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Hi,
Hows you experience with Paul Asset? He seems to have discontinued his advisory services and now is offering a portfolio watch service, where u get to see the stock he buys or sells and can decide based on that. They don't send any reports or anything. he says in the model he can also invest.

Given I am not someone who understand much about stocks, and some of my friend seems to think very positive about him, wanted to know of anyone has any experience before I can subscribe to his service.
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Old 14th August 2020, 16:25   #4393
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Today’s AGR hearing in SC was interesting and JIO has been at the receiving end.

It would be interesting to watch what happens on Monday for the stock and when hearing resumes in SC.

Some transcripts from the hearing today

1) SC asks if Reliance Jio can be asked to pay AGR dues on behalf of R Com since AGR dues emanate from spectrum use.

"Company using spectrum benefits", Justice Mishra

2) Justice Mishra: Jio is using since 2016. Why should we not ask Jio if they are using the spectrum. Who are the beneficiaries? It is shocking state of affairs if revenue is not shared and spectrum is used by somebody else.

Divan: A party has come forward with Resolution Plan.

3) Justice Mishra: Have you been avoiding liability since 2016?

Vishwanathan for Jio : I want to explain. There is no liability.

Justice Mishra: Spectrum is nobody's property. It is Government's. It is public money. It is a revenue sharing regime.

4) Viswanathan: I will explain in 5 minutes. There is something called "Spectrum Sharing Guidelines and Spectrum Trading Guidelines". I am sharing a part of it. AGR is paid by my side.
Justice Mishra: All the details of purchase must be before us in black and white.

SC Adjourns hearing to Monday.

Directions to the Government, Jio and RCOM Resolution Professional to produce necessary documents to bring to light who would be liable for AGR dues of RCOM.
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Old 14th August 2020, 18:02   #4394
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The AGR case now has all the makings of an Abbas-Mustan potboiler with twists and turns when least expected. The hearings continue to keep Vodafone-idea investors, punters and banks on the edge of their seats. Meanwhile, Reliance-Jio, the only one who seemed to have dodged the AGR bullet, has now been thrust into the limelight. A fitting climax to this saga will be if Justice Arun Mishra reserves the final judgement for September 3 which I believe is the day he is set to retire.
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Old 14th August 2020, 20:09   #4395
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Any view on Yes Bank? I have seen both positive and negative views on this counter and would like to get feedbacks on this forum. It seems some mutual funds bought Yes Bank shares in the month of July. LIC also bought Yes Bank shares recently.
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