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Kirtan A Shah, CFP® Profile picture
@KirtanShahCFP
Dec 13, 2020 • 31 tweets • 11 min read • Read on X
Here’s a compilation of Personal Finance threads I have written so far. Thank you for motivating me to do it.

Hit the 're-tweet' and help us educated more investors
Yes Bank’s additional Tier 1 bonds, written off. Lakshmi Villas Banks Tier 2 bonds, written off. Understand what & why of ATI and Tier 2 bonds in this thread.

(1/n)
'Floating Rate Funds' - A case for debt investing in the current interest rate situation (2/n)

Fixed Income investment strategies

It’s a misconception that FD, RBI Bond, PPF etc have no risk. The reason we don’t see the risk in them is because for us, risk ONLY means loss of capital. (3/n)

Index Funds v/s ETFs

While index funds and ETF’s look similar, there are multiple differences you need to keep in mind before investing in either of them. Let me highlight the important ones (4/n)

Physical Gold v/s Digital Gold v/s Gold ETF v/s Sovereign Gold Bond (SGB) (5/n)

With Kotak launching its International REIT Fund of Fund NFO, it is worth revisiting our old thread on Real Estate Investment Trust (#REIT). The Idea is to educate readers on REIT & share our view on the Kotak #NFO (6/n)

Alpha is not fund return – index return (excess returns over benchmark), that’s called active returns and not Alpha. Alpha means excess returns over ‘minimum expected returns’ from the fund (7/n)

Parag Parikh Long Term Equity fund will be introducing 'covered call strategy' in the fund. This can be a game changer for the fund in a market that does not steeply go up or moves up gradually or stays sideways or even falls (8/n)

There seems to be a fair bit of confusion amongst investors on what’s happening in arbitrage funds. Let me explain the arbitrage space and how it works with MFs. (9/n)

What was the NBFC package by RBI all about and will it help MFs? (10/n)

I am afraid that media reporting that FT investors will receive money around the average maturity of the fund may not really work that way. Reports say, if FT Ultra short is 0.62 years Average Maturity, pay back will be roughly 7-8 months, I doubt! (11/n)

RBI announced 50k cr Liquidity to the MF industry through banks. How does it work? (12/n)

What is Long Term Repo Operation (LTRO) (13/n)

What are #perpetual #bonds (perps) / additional tier 1 capital bonds (14/n)

What and how of the National Pension Scheme (NPS) (15/n)

Liquidity is fueling the stock market rally says everyone. What is this liquidity? How does it get created? How does it fuel stocks, commodities? (Thread) (16/n)

In this #IPO frenzy market, lets talk about some basics around
-Angle/VC/PE
-Allotment process
-IPO Funding
-Grey Market

(17/n)
In such a low interest rate scenario, what if I tell you, there is a product, which pays 8.5%, tax free, default risk free & also gives you deduction under 80C, would you invest?

Follow this thread on EPF v/s VPF (18/n)

Markets at 40 PE and yet not falling. How do valuations actually work? A basic premier on valuations for retail investors (19/n)

A basic primer on the banking sector, demystifying commonly used terms,
CASA
Wholesale Banking
Net Interest Income (NII)
Cost of Liability
Advances Growth
Gross v/s Net NPA
Provisions
SLR/CRR
Capital Adequacy Ratio
Net Interest Margin (NIM) (20/n)

A basic primer on the Indian Paint sector

With the listing of Indigo paints, JSW entering the paint sector & now Grasim announcing to invest 5,000 cr in the sector, lets explore,
-Products
-Industry
-Company (21/n)

Immediate take aways from the budget 2021 for the tax payers and investors (22/n)

A primer on 'Investing in Debt Mutual Funds' for retail investors.

Do hit the re-tweet and help us educate more investors (23/n)

The what, why and how of the new 'Retail Direct' announced by RBI to allow retail investors to directly invest in the G-Sec market (24/n)

What is currently happening in the Debt markets?

- RBI announcing 14 days variable reverse repo
- Government talking about 12L cr of borrowing
- RBI announcing 20,000 cr of OMO

Lets demystify! (25/n)

After writing on Banking & Paints, this thread focuses on the 'Logistic Sector'.

This thread covers,
- Macro
- Business Model
- 3PL & 4PL
- Valuation (26/n)

Why increase in Bond yields is creating panic in the equity market?

Also, how does Gold generally react in such times? (27/n)

Trying a YouTube video instead of a thread this time.

Topic - Invest in Passive at market bottom & active strategies at market top.

Video Link - (28/n)
Personal Finance 101 - All my learnings from the mistakes I made & see investors make. (29/n)

Not sure of how will the Debt mutual funds react to the change in valuation rules of AT1 & Tier 2 bonds and what should you do? (30/n)

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More from @KirtanShahCFP

Kirtan A Shah, CFP® Profile picture
Nov 6
Bond markets are expecting higher inflation with trump winning & hence the yields are going up, not a good sign for India equity. Let me explain (1/4) Image
(1) If Trump increases duty, it is inflationary as the imports will become costly & hence yields are going up

(2) If trump reduces corporate taxes, it means more stress on the government finances, more borrowings & hence higher yields (2/4)
While FED main continue to lower rates, the rate cut cycle will reduce in an inflationary situation. Remember FED can only impacts the shorter end of the curve with rate cuts. The longer end of the curve is market determined & hence the yields are up because markets feel inflation is coming back with Trump (3/4)
Read 4 tweets
Kirtan A Shah, CFP® Profile picture
Dec 13, 2023
Continuing our Mutual Fund educational series, here’s the 4th 🧵 in the series,

Topic - “Everything you need to know about Mutual Fund Taxation”
 
Do ‘re-tweet’ & help us educated more retail investors (1/13) Image
If you prefer watching a video instead, here’s a link to the 15 minute detailed video on the same topic -
 
Do subscribe & hit the bell icon to get notified everytime we post an educational video (2/13)
In Mutual Fund taxation, you first have to be able to classify your fund either as,
 
(a) Fund investing less than 35% in Equity - This fund will get Debt Taxation

(b) Fund investing between 35% - 64% in Equity - This fund will get Debt + Indexation Taxation

(c) Fund investing 65% & more in Equity - This fund will get Equity Taxation (3/13)
Read 13 tweets
Kirtan A Shah, CFP® Profile picture
Dec 7, 2023
Continuing our Mutual Fund Education Series, here’s the 3rd thread; this will demystify the Hybrid Mutual Fund categories for you.
 
Do ‘re-tweet’ & help us educate more investors to make the right investing decisions (1/9)
(Q1) What are Hybrid Funds?
 
Hybrid funds are funds, which invest in multiple asset classes like
- Equity
- Debt
- Gold
- Preference Shares
- REITs & InvITs

With an objective to reduce volatility (vs pure equity funds) & try an generate better risk adjusted returns (2/9)
(Q2) Types of Hybrid Funds?
 
- Conservative Hybrid Fund
- Balanced Hybrid Fund
- Aggressive Hybrid Fund
- Dynamic Asset Allocation (DAAF) or Balanced Advantage Fund (BAF)
- Multi Asset Allocation Fund
- Arbitrage Fund
- Equity Savings Fund (3/9) Image
Read 9 tweets
Kirtan A Shah, CFP® Profile picture
Dec 1, 2023
Continuing our Mutual Fund series, this thread will focus on ‘Demystifying the Debt Mutual Fund Categories’
 
Do ‘re-tweet’ & help us educate more investors (1/10)
Debt Mutual Funds have 16 different categories & these categories are differentiated on 3 major parameters,
 
(1) Average Maturity
(2) Mac Duration
(3) Credit Risk (2/10) Image
What’s Average Maturity?
 
Average maturity is similar to your tenure in FD. If your FD has a 3-year tenure, you expect the FD to mature in 3 years. Similarly, if the average maturity of a debt fund is 3 years, it means that all the bonds in which the scheme has invested, their weighted average maturity is 3 years. Open ended mutual funds do not mature as such but Average Maturity gives you an idea that 3 years is atleast what you should have as a time horizon if you want to invest in this scheme with a 3 years of average maturity. (3/10)
Read 10 tweets
Kirtan A Shah, CFP® Profile picture
Nov 30, 2023
"Should we invest or wait now that the markets are at an all time high?" - an investor asked.

I dint want to sound technical & hence told him about India's liquidity story. Do 're-tweet' this quick small 🧵, retail will benefit I think (1/8)
- I remember in the early days of my career, I was told markets fell ~60% during Lehman crises because FII's withdrew $2B
- Go back 10-15 years & FII's were a major reason markets moved in India
- Not any more
- Today FII's have only 16.5% holding in India, a decadal low (2/8)
The biggest reason market falls in India are shallow is the domestic money now,
- $2B is the monthly SIP book of the MF industry (remember Lehman?)
- Plus lumpsum investments in MF
- Plus Insurance & pension money

And still only 5% of India is invested :) (3/8)
Read 8 tweets
Kirtan A Shah, CFP® Profile picture
Nov 29, 2023
There are 1500+ schemes in mutual funds spread across multiple categories. To build the right portfolio, you need to understand the categories well. It’s less about the scheme & more about the category you choose in Mutual Funds.

This 🧵 is all about the Equity Category. Do ‘re-tweet’ & help us educate more investors (1/11)
As per SEBI guidelines, mutual fund schemes are classified as,
 
(1) Equity Schemes - Investing in Large, Mid & Small Cap Equities
(2) Debt Schemes - Investing in Bonds
(3) Hybrid Schemes - Investing in a mixture of Equity & Debt
(4) Solution oriented Schemes - For retirement & Children planning
(5) Other Schemes - Index Funds, ETF’s & Fund of Fund (2/11)
In this post, we will focus on Equity Schemes. In Mutual Funds there is a clear definition of what is called a large cap, mid cap & small cap.
 
- Large Cap Stocks are the top 100 stocks by market capitalization
- Mid Cap Stocks are stocks from 101 to 250 by market capitalization
- Small Cap Stocks are 251 & below in market capitalization (3/11)
Read 11 tweets

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