CHAPTER 1

The
fundamentals
of
Investment.
 Investing is like putting money away
What to grow it over time, just like planting
a seed. You put in a little now (the
seed) with the hope of getting
does something bigger and better in the
future (a plant). In the world of
investing, that bigger and better thing
investment could be more money from selling
stocks, a steady income from renting

means?
out a property, or simply having more
saved up for your future.
 The ABCs of investment.

What are the 1. Minimize Risk: This is for cautious investors who
prioritize the safety of their money over high returns.
2. Grow My Money (Capital Appreciation): This is for
ambitious investors who are comfortable with some risk in
exchange for potentially bigger returns.

ABCs of
3. Get Regular Income: This is for investors who want their
investments to generate a steady stream of cash flow.
4. Save on Taxes: This is for tax-conscious investors who
look for ways to reduce their tax burden through

Investment?
investments. These objectives can sometimes overlap. For
instance, some investments might offer both capital
appreciation and some regular income. The key takeaway
is that understanding your own investment goals is crucial
for choosing the right investment options.
 • Savings: Great for short-term goals, emergencies, and easy access to cash, but
vulnerable to inflation.
• Investing: Offers the potential for higher returns to grow wealth and combat

Why is
inflation, but comes with risk and may not be as liquid.There are some crucial
point that saving alone might not be enough due to inflation and long-term
goals. Here are some additional thoughts on your points: Inflation-An inflation
rate of 10% means that if you save 100,000 today, then after one year it will be
worth ₹90,000 only. Saving without investing can eventually lead to a shortage

Investment
of funds in the future.
• Small expenses depleting savings: Small expenses means "corroding" savings. A
helpful strategy is to automate transfers to a savings account, so you "pay
yourself first" and avoid the temptation to spend that money.III prepared for

a better
big-ticket expenses-Savings are good for short-term and small-ticket expenses.
But for large-ticket expenses like children's education or retirement planning,
investments are a must. Savings: Great for short-term goals, emergencies, and
easy access to cash, but vulnerable to inflation.
• Investing: Offers the potential for higher returns to grow wealth and combat

option than
inflation, but comes with risk and may not be as liquid. There are some crucial
point that saving alone might not be enough due to inflation and long-term
goals. Here are some additional thoughts on your points: Inflation-An inflation
rate of 10% means that if you save 100,000 today, then after one year it will be
worth ₹90,000 only. Saving without investing can eventually lead to a shortage

Savings?
of funds in the future.
• Small expenses depleting savings: Small expenses means "corroding" savings. A
helpful strategy is to automate transfers to a savings account, so you "pay
yourself first" and avoid the temptation to spend that money.III prepared for
big-ticket expenses-Savings are good for short-term and small-ticket expenses.
But for large-ticket expenses like children's education or retirement planning,
investments are a must.
 There are numerous investment options in India, each

What are
with its own risk-return profile and suitability for
different goals. Here's a few points you mentioned:

the • Savings Accounts: Offer low returns but maximum

safety and liquidity.
• Bank Fixed Deposits (FDs): Popular choice for

different guaranteed returns for a fixed tenure.

• Bonds & Debentures: Debt instruments issued by
companies or governments, risk depends on the issuer's

investment creditworthiness.
• Mutual Funds: A professionally managed pool of funds
offering diversification and various investment

options?
objectives. Choose a fund that aligns with your goals.
• Equity (Stocks): High-risk, high-reward potential,
requires research and market knowledge.
 The early bird analogy perfectly captures

Why is it the benefits of starting to invest early.

Early Start, More Risk Tolerance:
Investors have a longer time horizon to

important recover from potential investment

mistakes, allowing them to take
advantage of potentially higher-return

to start opportunities.The Power of

Compounding: Starting early allows your
money to grow exponentially through

investing compound interest. Even small amounts

invested regularly can accumulate
significantly over time.Encourages

early? Discipline: Regular investment instills a

habit of saving and discourages
unnecessary spending.
CHAPTER 2

Understanding
Mutual
Funds
What A mutual fund is a pool of money
from many investors that's managed
by a professional. This professional,
are called a fund manager, decides how
to invest the money in different

Mutual assets, like stocks, bonds, or even real

estate. The goal is to grow the overall
value of the fund, which benefits all
Funds? the investors involved.
 • Mutual funds are regulated by the Securities and
Exchange Board of India (SEBI), which ensures that
they follow certain rules and guidelines to protect
the interests of investors.

How do • Mutual funds have different schemes or plans, each

with a different investment objective, risk profile,
and asset allocation. Investors can choose the
scheme that suits their goals, risk appetite, and

Mutual •
time horizon.
Mutual funds charge fees and expenses to cover
the costs of managing the fund, such as fund

Funds manager’s salary, administrative expenses,

marketing expenses, etc. These fees and expenses
reduce the returns of the fund and vary from
scheme to scheme.

work? • Mutual funds are subject to market risks, which

means that the value of the fund can fluctuate
depending on the performance of the underlying
securities and the market conditions. Investors can
lose money if they sell their units at a lower NAV
than the purchase price.
 Shares
Ram couldn't buy during the IPO (Initial Public Offering), which is

What is the the first time a company offers shares to the public, but the
secondary market allows him to buy from existing shareholders
like Viren, where the buying and selling of existing shares happen,

difference
facilitated by marketplaces like the Bombay Stock Exchange (BSE)
and National Stock Exchange of India (NSE).
As mandated by SEBI, each AMC provide three important
documents to inform investors about every scheme:SID (Scheme

between
Information Document)KIM (Key Information Memorandum)SAI
(Statement of Additional Information)
Mutual Funds

Mutual Vikram's situation represents the challenges many investors face:

Lack of knowledge or time to research individual stocks. Difficulty
navigating the complexities of the stock market. Parth, on the
other hand, the expertise that a Mutual Fund offers. Vikram gives

Funds and his money to the Mutual Fund. The Mutual Fund gathers money
from many investors like Vikram. The Fund Manager, with their
expertise, invests the combined pool of money in various assets

Shares?
like stocks, bonds, or real estate. As the value of the investments
may goes up or down. The Fund may distribute earnings from
dividends or interest payments on the underlying investments.
Vikram receives a portion based on his investment. When Vikram
 Types of Mutual funds based on Investment Objective.
Growth Funds: Focus on capital appreciation over the long term (typically 5+ years). Suitable for
investors comfortable with higher risk for potentially higher returns.
Income Funds: Aim to provide regular income through investments in fixed-income securities like
bonds and debentures. Generally considered lower risk than growth funds, but also tend to offer
lower potential returns.

Types Liquid Funds: Designed for short-term investment goals (less than 3 years) with low risk
tolerance. Invest in highly liquid assets like treasury bills and commercial papers, offering easy
access and minimal price fluctuation.

of
Tax-Saving Funds (ELSS): Equity Linked Saving Schemes (ELSS) offer tax benefits under the Indian
Income Tax Act. They invest in stocks, so they carry market risk, but can potentially offer high
returns.
Types of mutual funds based on specialization

Mutual
Sector Funds: Focused on a specific sector, such as technology, healthcare, or banking. This
allows investors to target a market they believe has high growth potential, but also increases
risk.
Index Funds: These funds aim to replicate the performance of a particular market index, like the

Funds
Nifty 50 or BSE Sensex. They passively track the index by investing in the same companies and
proportions as the index. This offers a way to gain market exposure at a lower cost than actively
managed funds.

Emerging Market Funds: These funds invest in companies or countries in developing economies.
Emerging markets can offer higher growth potential but also come with greater political and
economic risks.
International Funds: These funds invest in stocks and bonds from companies outside of India.
This allows investors to diversify their holdings beyond the Indian market and potentially benefit
 Single Investment or Lump Sum Investment: This involves
investing a larger amount of money all at once. This can be a
good option if you have a windfall or a large amount of savings
available.

Various Systematic Investment Plan (SIP): This is a popular method of

investing money at regular intervals (weekly, monthly,
quarterly). SIP inculcates discipline and benefits from rupee-

modes of cost averaging, where you purchase more units when the price
is low and fewer units when the price is high.
Systematic Transfer Plan (STP): This allows you to transfer a

investing in
fixed amount of money from one Mutual Fund scheme to
another at regular intervals. This can be useful for gradually
moving your investment from a high-risk to a low-risk fund as
you approach your financial goals.

Mutual Dividend Transfer Plan (DTP): This is a plan where the

dividends earned by a Mutual Fund scheme are automatically
reinvested into the same scheme. This allows for compounding
of returns over time.

Funds Systematic Withdrawal Plan (SWP): This allows you to

withdraw a fixed amount of money from your Mutual Fund
scheme at regular intervals. This can be a good way to
generate income from your investments during retirement or
other life goals.
CHAPTER 3

Why
Mutual
Funds?
 Risk management
Don't put all your eggs in one basket!. The farm maid's story beautifully illustrates the concept of
diversification. Diversification: By investing in a variety of assets within a Mutual Fund (different
stocks, bonds, etc.), you spread your risk. If one investment performs poorly, it's hopefully offset
by the positive performance of others. This reduces the overall risk of your portfolio compared to
holding just a few individual stocks. Risk-Return Tradeoff: You've rightly pointed out the high-risk,
high-reward relationship. Generally, investments with the potential for higher returns also carry
greater risk of loss.

Why Tax Benefits

ELSS (Equity Linked Saving Schemes) are a popular type of Mutual Fund that offers tax benefits
under Section 80C of the Income Tax Act in India.

invest in Here's some key points:

Section 80C: This section allows taxpayers to deduct certain investments from their taxable
income, thereby reducing their tax liabilities Tax Benefits: Investments up to ₹1.5 lakhs (as of 2024

Mutual
budget) in ELSS Funds qualify for deduction under Section 80C.Tax Savings Advantage: This
deduction can significantly reduce your tax burden, making ELSS an attractive option for tax-
saving purposes.

To withdraw or not to withdraw

Funds?
We can opt for tax saving schemes ELSS (Equity Linked Saving Schemes): ELSS typically have a 3-
year lock-in period. This can be a good way to enforce long-term saving, especially for those who
might be tempted to withdraw funds prematurely. On the other hand, we can also opt for a
regular mutual fund with no restriction on withdrawals.

Open-ended Funds
These are the most common type of Mutual Fund and offer high liquidity. You can generally
redeem your units (sell them back to the fund house) at the prevailing Net Asset Value (NAV) on
any business day. This provides flexibility to access your money when needed.
 Lyndon B Johnson famously said - 'NOTHING COMES FREE.
NOT EVEN GOOD, ESPECIALLY NOT GOOD', investments come
at a price - fees, charges and most importantly TAX.

Does How do Mutual funds helps in tax saving?

Mutual funds offering Tax Deduction:

investing
ELSS investments qualify for a deduction under Section 80C of
the Income Tax Act, reducing your taxable income.
Deduction Limit: The maximum deduction amount is ₹1.5
lakhs.

in Mutual
Lock-in Period: Mandatory lock-in period of 3 years.
Capital Gains Tax: For long-term capital gains (held over 1
year), there's a concessional tax rate of 10.4%.
Mutual funds offering tax exemption:

Funds help ELSS (Equity Linked Saving Schemes): These are popular tax-
saving Mutual Funds. The maximum deduction amount of
₹1.5 lakhs (as of 2024 budget). This deduction reduces your
taxable income, lowering your tax liability.

in tax saving? Long-Term Capital Gains (LTCG): This applies to profits earned
on redemptions from equity funds (including ELSS) where the
investment holding period is more than 1 year. LTCG on
equity funds are taxed at a concessional rate of 10.4%
(including indexation and cess).
CHAPTER 4

All you need to

know before
investing in
Mutual Funds
 The most common concepts of Mutual Funds:
New Fund Offer: An NFO is the initial launch of a new

Basic
Mutual Fund scheme by an Asset Management Company
(AMC) to raise capital from investors.
Like an Initial Public Offering (IPO) for companies, an NFO
allows the AMC to gather funds to invest in securities

concepts (stocks, bonds, etc.) for the new Mutual Fund scheme.

SEBI Mandate: The Securities and Exchange Board of

related to India (SEBI) mandates KYC compliance for all investors

dealing with Mutual Funds and other financial
institutions.Purpose: KYC helps prevent money

Mutual laundering, terrorist financing, and other financial crimes

by verifying investor identities.

Funds
The KYC Registration Process:Downloading the KYC form
from a SEBI intermediary.Filling out the form with proper
instructions.Providing self-attested copies of required
documents.In-Person Verification (IPV) with originals of
documents.Submitting the complete application to a SEBI
 What is KYC?
Purpose: Verifies the identity of investors to prevent money laundering, terrorist
financing, and other financial crimes.
Verification Methods:
Identity Proof (IPV): In-person verification ensures the person matches the
documents presented.Officially Valid Documents: Documents like PAN card, Aadhar

KYC, Its
Card, or Passport establish the investor's identity.
Ultimate Beneficial Ownership (UBO): This identifies the real people who ultimately
benefit from the investment, helping to prevent misuse of financial products.
Occupation & Income Details: Understanding an investor's occupation and income
helps assess their risk tolerance and suitability for different investment products.

Importance and Modes of KYC Registration

Paper-Based Method: Involves downloading a KYC form from a SEBI intermediary
(Mutual Fund, broker, etc.)Filling out the form with proper instructionsProviding

Documents
self-attested copies of required documents (PAN card, address proof, identity
proof)Submitting the form and original documents for In-Person Verification (IPV)
at a SEBI intermediary's office.
Online KYC:Offers a more convenient and faster alternative.Various methods are
available, subject to SEBI guideline.

Required to be Video KYC: Verification happens virtually through a video call with a KYC
representative.
Aadhaar-based KYC: Utilizes Aadhaar information for identity verification.
Digi-locker KYC: Leverages documents stored in the investor's Digi locker for

KYC
verification.

Documents required to be KYC complaint

Proof of identity(POI)

Compliant.
1. Unique Identification Number (UID) (Aadhaar) | Passport | Voter ID card |
Driving license
2. PAN card with photograph3. Identity card/ document with applicant's Photo,
issued by any of the following:
1. Central/State Government and its Departments
 Importance of an Independent Financial Advisor

Importance When investors look for assistance with their

investments, they are faced with many options

of an like:

1. Free Online Advice

Independent 2. DIY Approach
3. Engaging a Financial Advisor

Financial Why do I need a Financial Advisor?

Advisor • Financial products are known to have hidden

costs which are not made clear to people.
• Regulatory compliances can take up a lot of

(IFA) time and effort.

• Lack of knowledge about the current and prior
market trends.
 Goal-based investments (Reasons for investing)
The key is to strike a balance between thoughtful planning and taking
action:
Educate Yourself: Gain a basic understanding of financial concepts.
Start Early: Even small, regular investments can grow over time due to
compounding.

Reason
Seek Help if Needed: A financial advisor can provide personalized guidance
based on your goals and risk tolerance.
Investment goal- Tax benefit
Many investors look for investment options that offer tax benefits.

for Tax Benefits in Investments:

Tax Deductions: These reduce your taxable income, lowering your tax
liability.

Investing
Tax Exemptions: Returns earned on certain investments are exempt from
taxes.
Investment Options:
Debt Options (Lower Risk):
PPF (Public Provident Fund): Offers guaranteed returns, tax
deductions, and long lock-in period (15 years).
EPF (Employees' Provident Fund): Employer-sponsored retirement
savings scheme with tax benefits.
Equity Options (Higher Risk, Higher Potential Returns):
ELSS (Equity Linked Saving Schemes): Mutual funds that invest in
stocks, offering tax deductions, capital appreciation potential, and a 3-year
THANK
YOU!!!!