An educational #Thread on Personal Finance Rules we all must know. Have sorted the rules & explained those which are less known to every1 & are very imp. as got many requests to share in details.
Rule of 70
4% Rule for Financial Freedom
100 minus ur age rule
50-30-20 Rule
1/n
1) "Rule of 70"
Divide 70 by current #inflation rate to know how fast the value of ur investment will get reduced to half its present value.
Inflation rate of 8% will reduce the value of ur money to 1/2 in 8.75 yrs.
1 should always consider while calculating net returns!
2/n
3) "4% Rule for Financial Freedom"
Corpus Required = 25 times of ur estimated Annual Expenses.
E.g- if ur annual expense after 45 years of age is 500,000 and u wish to take VRS then corpus with u required is 1.25 crore.
Put 50% of this in fixed income & 50% into equity.
Cond.
Withdraw 4% every year, i.e. 5 lacs.
This rule works for 96% of time in 30 years period.
3) "100 mins your age rule"
It is used for #assetallocation. Subtract ur age from 100 to find out, how much of ur portfolio should be allocated to equities.
Suppose ur Age is 40!!
Cond.
Suppose your Age is 40 so (100 - 40 = 60)
Equity : 60%
Debt : 40%
But if your Age is 55 so (100 - 55 = 45)
Equity : 45%
Debt : 55%
4) "50-30-20 Rule"
It is about allocation of income to expense!!
Divide your income into :-
50℅ - Needs (Groceries, rent, emi, etc)
An educational #Thread on how 1 can identify "Freakout"(Fake Breakout) explained with practical e.g's so that every1 can understand.
Identifying Breakout is not a big challenge but exiting it at the right time if it "fails" with minor loss is imp. which 90% people don't do.
1/n
1st lets learn how to judge that the Breakout is not sustaining & time to exit the trade has come for once.
With digital content available identifying #Stocks breaking resistance is not a big task but exiting these trades timely if they go against us is the most imp. thing.
2/n
Let's understand the abv with recent e.g of USDINR. It gave a breakout abv 75.6 after 8 months. Though we saw a mild upmove after that but it drastically failed& cmp is 74.5.
Now if some1 bought on breakout then usually most will hold it till now or exit at cmp in distress.
An educational #Thread on 200 DEMA & its imp. in current scenario!
To cut things short 200 DEMA is considered as the decider between who is in dominating i.e bulls or bears. Its equally imp. for #investors & #Traders! Price sustaining below it is considered bad for bulls.
1/n
Though major indices like #nifty50 , banknifty, small & mid caps index are all trading above 200 DEMA but the major ones are not far from it. A major concern is the darlings of the market having high weightage have started trading below it.
Lets understand more with e.g's.
2/n
#HDFC Twins - Combined they have 15% weightage in Nifty & the picture doesn't look rosy.
For the 1st time in this entire bull market rally both have closed below 200 DEMA which was earlier a strong support. Though a LL again would be a confirmation of bears dominating both.