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Niranjan Avasthi Profile picture
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7 Mar, 4 tweets, 1 min read
In investing many of us know what to do, but only few know when to do it.

#behavior #investing
Next time you see market crashing, just remember what you did or didn't do in March 2020.

You will figure out what is the right thing to do.
Investing success is less guided by formulas and more by our reaction to other people's behaviour and views.

#investing
We spend most of our time studying and learning from market history.

We barely spend time in learning from history of our own behaviour.

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More from @avasthiniranjan

Niranjan Avasthi Profile picture
8 Mar
A thread to understand all about State Development Loans (SDLs).
Why you should invest now and how?

1. What is an SDL?
They are market borrowing by various States of India in form of bonds. These bonds are auctioned by the RBI on regular basis in the same manner as G-Sec.

1/n
They share similar characteristics such as:

-The coupon rate for each state is decided by the auction process
-The RBI conducts the auction process on behalf of States
-The interest is paid on semi-annual basis with bullet payment on maturity
2/n
- SDLs do not carry any credit risk. As a result, they carry zero risk weight – similar to G-Sec & T-Bills
- SDLs are eligible for SLR investments – similar to G-Sec & T-Bills
- SDLs are eligible for LAF and Repo operations – similar to G-Sec & T-Bills

3/n
Read 20 tweets
Niranjan Avasthi Profile picture
7 Mar
A thread to understand this new category of debt funds - Target Maturity Index Funds.

How it is different from other debt funds, what are the benefits and risks one need to know while investing in such funds.

RT and share if you find it useful.

1/n
What is meant by Target Maturity debt fund?

As the name goes, target maturity debt fund has a specific maturity date on which it matures.

A fund having target maturity as 30th April 2026 will end on that day and proceeds will be given back to the investor.

2/n
These funds invest in bonds that have maturity in line with the maturity of the fund.

A Target Maturity Fund of April 2026 will invest in bonds that will mature on or before April 2026.

The fund hold these bonds till their maturity.

3/n
Read 20 tweets
Niranjan Avasthi Profile picture
28 Feb
Compiling all my threads and articles here.

Do read and share if you fing them useful.
Read 10 tweets
Niranjan Avasthi Profile picture
28 Feb
A thread on Debt mutual fund basics

Let's understand why and how debt mutual fund NAV react to changes in interest rates and how to select a right debt fund and manage interest rate risk.

Share widely if you find this useful.

1/n
Relation between bond price and interest rates.

Bond price fall when interest rates rise and vice-versa.

But why? Let's understand.

Say you invest Rs. 100 in a bond of 2 years which pays an interest of 10% per annum.

2/n
After 1 year, interest rates in the economy rise to 11% since RBI increased interest rates.

Now the bond which you hold has 1 year remaining to mature and pays 10% interest. But a new bond in the market with 1 year maturity now pays 11% interest as rates have risen.

3/n
Read 25 tweets
Niranjan Avasthi Profile picture
14 Feb
A simple thread to understand the meaning of investment cycle (Gross Fixed Capital Formation) in the economy and why it is important?
Which sectors can benefit in such cycle and why?

Do share if you find it useful.

1/n
What is Gross Fixed Capital Formation?

There are essentially 2 methods to calculate GDP of a country. Both methods ultimately tries to measure the total value of goods and services produced in the country during a particular period.

2/n
1. Income Method of GDP calculation adds up INCOME EARNED from all goods and services produced in the country.

2. Expenditure method of GDP calculation takes into account all purchases of goods and services in the country.

3/n
Read 22 tweets
Niranjan Avasthi Profile picture
2 Feb
Union budget proposed big rise in Capital Expenditure. What does does it mean?

A simple thread to understand Capital Expenditure vs Revenue Expenditure and its potential impact on the economy.

And why this may lead to rotation in sectoral winners.

1/n
The expenditure presented by the government is mainly defined in 2 ways

1. Expenditure which results in creation or acquisition of assets.
2. Expenditure on operational expenses that don't create any assets, but are routine spends.

2/n
The 1st is called capital expenditure, and the 2nd one is revenue expenditure.

3/n
Read 16 tweets

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