Mutual Funds is an Investment product available in the hand of the smart investor through which they can invest in multiple asset class of their choice. The asset class can be Gold, International Equity, Equity, Debt, Real Estate and Alternative Asset Class etc. The investor can invest in such schemes according to his future financial goals, the objective of the investment, the ability to take risk and time horizon of the goal.
The investor who chooses to invest through mutual funds will be able to use the service of the fund manager who will make an investment decision with professional expertise, diversification and risk management.
AMFI is the regulatory body that governs the Mutual Funds.
SEBI is the primary regulator of Capital Markets and RBI is also involved when investment related to foreign exchange, international markets and money market
Types of Mutual funds Based on Schemes:
Open Ended Fund: An open ended scheme allows the investor to invest and redeem the units in the scheme on a continuous basis at the current NAV prevailing in the market till perpetuity.
Close Ended Scheme: A Close ended scheme is for a fixed tenor where an investor can invest when the scheme opens and can make an exit only when the tenure of the scheme is matured. The investor will not be able to make an entry and exit. The scheme is redeemed when the maturity of the fund is over and the fund ceases to exist.
Interval Fund: Interval fund is the variant of Close ended fund which becomes open ended at regular interval for an investor to make an exit just like open ended schemes.
Active Fund: An Active Fund selects stocks in the portfolio based on the strategy to generate a higher return than the benchmark with the asset allocation, selection of stocks and timing to generate positive Alpha.
Passive Fund: Passive Fund invests the fund in the same proportion in companies that represent the index/benchmarks such as NIFTY50, SENSEX30. Fund Managers tend to generate returns same as index. He does not use his skill to outperform the benchmark. An investor who wants to mirror the same return of the index can invest in passive funds.
Categorization of Mutual Funds Based on Asset Class:
Equity Fund: The Fund Manager invests the fund in Equity Shares and Equity related instruments. An Investor with a high-risk appetite and long-term goal horizon should invest in Equity Funds.
Diversified Equity Fund: Diversified Equity Funds invest the fund across all Segments, Sectors and Size of the Company.
Segment of the Market: Fund Managers may focus on the size of the companies which belong to a particular segment, such as large-cap, mid-cap and small-cap, based on the market capitalization of the companies.
Sectoral Funds: The Sectoral Fund invests the fund in companies that belong to a specific sector, such as automobiles, banking, technology, etc. The risk in Sectoral funds is higher than in diversified funds as the investment is concentrated in a particular sector.
Thematic Fund: Thematic Fund invests the fund in multiple sectors and stocks that belong to a particular theme as per the economic scenario or new opportunity. Such a fund is more diversified than a Sectoral fund but still has a high concentration risk. Forex: The housing opportunity fund can invest in sectors which is a part of the housing scheme, like Cement, Metals and Infrastructure Sector.
For More information on Equity mutual Funds, you can enrol for stock market course in Delhi
Fund Based on Strategies and Style of Selection of Securities:
Growth Fund: Growth Funds invest in a portfolio of companies whose earnings are expected to grow at a rate higher than the average rate given the fundamental outlook of the economy. It aims to provide capital appreciation to investors.
Value Funds: Value Funds invest in companies which are undervalued due to short-term demand and supply scenarios with the expectation of an increase in share price when the market recognizes its true or fair value. These funds tend to have a comparatively lower risk.
Dividend Yield Fund: These funds invest in shares that have a high dividend yield. This fund pays a large amount of profit to investors in the form of dividends every year, which suits conservative investors who need regular income.
ELSS: ELSS is a special type of investment in Equity Funds that gives tax benefit under section 80C up to a limit of RS.1,80,000/- with a lock-in of 3 years with allocation in equity of 80%.
Arbitrage Fund: Arbitrage Fund is a low-risk fund that invests for a short term in the cash and derivatives segment to take advantage of mispricing. It suits an investor who tends to take advantage of low risk by hedge position and mispricing in two different segments
Advantage of Investing in Equity Based Fund:
Capital Appreciation: The investor will get the capital appreciation of 15 to 18% compounded annual growth throughout a 7, 10 and 15-year horizon.
Diversification: An Investor will get the advantage of diversification by investing a small amount every month and thereby have the advantage of not timing the market by investing directly in individual stocks.
Risk management: Diversification of the equity portfolio will help the investor to reduce Risk by allocating funds in multiple schemes based on his objective.
Tax Arbitrage: Equity fund helps the investor to gain an advantage in tax management as it provides long-term capital gain benefit as well as investing in ELSS will give principal, capital appreciation and maturity proceeds tax-free.
Startup Equity: some securities are not available to retail investors due to wholesale placements to qualified institutions. Mutual Funds provide access to such securities through their portfolio.
Disadvantage of Investing in Mutual Funds:
Higher Cost: The cost of Investing through Mutual Funds is higher given the fact that the fund is managed by professional fund managers who charge fees to render the service of investment.
To gain more insights on Mutual funds for investment, you can join Stock Market Institute in India to pursue a course in Investment Advisory and Portfolio Management.
Are you looking for an ideal trading strategy to help you with increased profits from the stock market? Then, check out this article to learn more about hedging.
The word hedging might make you think of gardening practices. But in the stock market, this word has a whole new meaning. It protects your portfolio against the unpropitious moments of price.
Quite incomprehensible, right? Let's understand with an example: you might have heard of life insurance policies and how they articulate about protecting your family in case you die. Although it won't save you from dying, it somehow reduces the financial impact on your family.
A similar thing goes for hedging since their basic meanings are the same, but hedging is far more complicated than life insurance. It's a technique that judiciously uses investment instruments to counterbalance any risk emerging from adverse price movements.
So investors, whether beginners or advanced, should be aware of this helpful technique. stock market trading courses in Delhi will further help you with the market tricks.
Hedging is nothing but a risk management strategy used by an investor to secure his investment from being lay-bare to a risky situation that may lead to the loss of value.
Through this strategy, the investor covers themselves from all the unforeseen dangers & adverse events of every investment he invests in. For some reason, if a bad event happens and an investor is appropriately hedged, then the outcome of the event is minimized.
Also Read- Benefits of Stock Market Course for easy tips to increase your profits.
Hedging is broadly classified into three types which aid investors in making money by trading in different currencies, securities & commodities. These are:
Purchasing, borrowing, short-term lending, and selling with a maturity period of one year- all these are the components of the money market. Money markets enclose a broad range of financial transactions like trading of currency & calls on stocks.
These are the standardized agreements required between two independent parties who wish to sell or acquire underlying assets on a specific date and time at a predetermined price. It also includes a variety of contracts, such as
Commodity's future contracts.
Currency future contracts & etc.
These are the non-standardized agreements required between two independent parties who wish to sell or acquire underlying assets on a specific date and time at a predetermined price. It includes a wide range of contracts, such as
Forward exchange contract for currencies.
Forward exchange contract for commodities & etc.
Including foreign currencies, are associated with numerous risks, such as volatility risk, currency risk, etc.
Includes metals, agriculture items & energy products that are associated with commodity risk.
Security risk or equity risk includes investment in equities, bonds, stocks, and indexes.
Hedging works as a balance that supports any investment.
Derivative or contract is the standard form for hedging used by investors to measure an asset's underlying value.
Let's say, for example, an investor buys the stock of any company with the hope that that stock's price will increase. But unfortunately, the price plunged, and the investor was left with a loss.
Now to alleviate such incidents, investors can choose an option that will balance off the negative impact of such an event.
Here, the word option means an agreement that lets investors buy or sell a stock at a specific price within the prescribed time.
There are various types of hedging strategies that have their unique factors. And if an investor wants to achieve impeccable results, then using more than one strategy is recommended. Algorithm trading will help you generate computerized profit from stock markets which might not be possible for a layman trader to execute.
Below mentioned are the types that every investor should consider:
It is accomplished by diversifying an investor's portfolio across multiple assets.
For Eg: 50% invested in stocks and the remaining 50% in assets to balance your portfolio.
Arbitrage is a straightforward yet incredibly clever strategy.
In this strategy, investors buy a share and immediately sell it at a higher price in the NSE, BSE, and derivative markets. The profit in this strategy is small but steady. Investors in the stock market commonly use this strategy.
Let's take an example; suppose an investor has 10,000 equity shares of TCS whose value is Rs 565 & in the future, the rate of the same share goes to Rs 575, so the investor sells that lot at the increased price.
It is accomplished by investing some amount of the portfolio in debt instruments that ensure stability and the remaining ones in derivatives which protect against various dangers.
It contains asset call and put options, which allows the investor to safeguard his portfolio directly.
The approach of this strategy is straightforward.In this type the investor keeps part of his money in cash to protect his investments from potential losses.
This type of strategy is often used by investors, which involves acquiring more units of a particular product or share even though the CP & SP of the product has declined.
For example, an investor buys more shares of a previously purchased stock if its price drops significantly. Then the profits from the second purchase may offset losses from the first if the price rises between the two buy prices.
One of the most successful investors in the 20th century, Warren Buffet, has defined call and put options as a weapon of mass destruction. In simple words, A call option is a right but not an obligation with an investor that he has to buy stock or underlying assets at a specific price(set price) on or before the expiration of the date.
For instance, on 8th December 2020, the price for one lot of Reliance shares was Rs 1800/share, and the call option for the lot was Rs 2200/share available with a premium of Rs 50.5, which will expire on 31st December 2020.
Now here
The spot price is Rs 1800
The strike price is Rs 2200
Premium is Rs 50.5
In order to exercise the call option, the investor must wait until the price for one lot of shares rises to Rs 2200/share. If the price rises, the seller must sell the lot since he is bound to a contract with the investor.
But if the price doesn't uplift until the expiry date, the investor can cancel the call option by losing his premium amount. A put option, on the other hand, is a right but not an obligation with an investor that he has to sell stock or underlying assets at a specific price(set price) on or before the expiration of the date.
Before going further, let's first understand the primary meaning of CFD.
CFD stands for contract for difference between a broker and an investor. Like stocks, it is also traded on an exchange, but with one significant difference: You don't own the asset you trade. Hedging through CFDs is a widespread practice as they enable traders to make long or short trades without acquiring the underlying assets.
Let's understand this with a hypothetical example:
Mr. Amitabh owns 15000 shares of Tesla on his separate broking account, and he's pretty concerned that the price of the share will drop due to its poor financial report.So, he decided to short-sell his 15000 Tesla shares through his CFD trading account, hoping that if any loss occurs, it can be offset by victorious short trade. Unfortunately, after some time, the price of Tesla shares was fallen by 10%, which made MR Amitabh's account worth less in value. But, his CFD trading account made a gain of 10%, which nullified the loss.With the lower price, Mr Amitabh can purchase his Tesla shares again.
Hedging is used to secure investors' profit.
Allows traders to undergo arduous marketing conditions.
One of the main perks is to increase liquidity in financial markets.
It will enable investors to utilize complicated trading techniques to optimize profit.
Effective hedging protects investors against inflation, interest rates, currency exchange rates, etc.
With multitudinous asset classes, you can diversify your trading portfolio effectively.
With lesser margin expenditure, it provides a more flexible pricing strategy.
It substantially reduces losses.
Investors are allowed to invest in various assets, enhancing their liquidity.
Risk and reward are parallel threads. Lower risk means a lower profit.
Hedging comes with a cost that tends to outweigh the gain.
Traders who engage in short-term trading, such as day traders, find that hedging is a challenging strategy.
The benefits of hedging are minimal if the market is doing well or moving sideways.
Trading options and futures often have higher capital or margin requirements.
It takes good trading skills and experience to succeed with hedging.
These were some basics to understand what hedging is all about in the financial market. As financial markets can change suddenly and unforeseeably, hedges are essential protection for investors who cannot control the manipulation to safeguard their investment. And if you are a newbie investor who wants to be the OG in the stock market and wants to learn various skills.
In that case, There is no better program to gain more knowledge about stocks than the Stock Market Institute In India which has a comprehensive list of courses on the stock market, like BSE, NSE, SEBI, NISM, and NCFM, to help you invest like a bull.
So what are you waiting for? Grab your seats in NIWS and be an eminent investor.
As quoted by the legend of the investment community- Warren Buffet;
" Never invest in a business you cannot understand, and never invest at unreasonable variations."
The lure of big profits from equities has always attracted investors in the lap of stock markets. But, making profits through trading is not easy. It requires extraordinary fundamental analysis skills, research analysis, discipline, and patience.
Stock traders prefer technical strategies to buy and sell holdings. These strategies help arbitrage the market volatility, increasing profits from different call options. These strategies have worked most of the time and helped many of our students become stock market wizards and create wealth.
Smart investors, come ready! Our Elite-certified courses are a full-proof game plan. You can take calculated risks for high returns with the proper knowledge and insight.
To learn all about successful trading strategies, enrol in the Stock Market Institute In Indore for courses including:
A trading strategy is a systematic approach preferred by stock market traders for buying and selling securities in a volatile market. These strategies are formulated after understanding the psychology of investors or traders, secondary market participants, global economic culture, and companies’ potential. Having a strategy is essential when making trading decisions.
A trading strategy might sound like a technical term. However, it is a simple summary of different considerations like:
Market Capital,
Technical Indicators,
Investment Style,
Fundamental Analysis,
Level of Portfolio diversification,
Industry sector,
Risk tolerance,
Holding period or time horizon,
Tax considerations,
Leverage.
Most trading strategies are based on fundamentals or technical and consist of quantifiable information that can be back-tested for accurate decisions. These strategies are also periodically tweaked or re-evaluated according to investors' goals and market conditions to maintain their effectiveness.
1. Intraday Trading or Day Trading Strategy:
As the name suggests, positions under this trading strategy are closed on the same day. Investors need to settle their securities—buy and sell—on the same trading day before the closing bell for stock markets hits. An intraday trading strategy is highly volatile and may require fast decision-making.
2. End of Day Trading Strategy:
An end-of-day Trading Strategy is part of intraday trading. Securities are settled daily, but most orders are executed near the closing bells. Technical charts can predict the closing and the next day's opening. An end-of-day trading strategy might be suitable if an investor is willing to bear the overnight risk.
3. Swing Trading Strategy:
In a swing trading strategy, investors or traders use Fibonacci retracements, support and resistance levels, Channel trading, 10-—and 20-day SMA, MACD, and a few more technical charts to make short-term gains. Elliot wave theory is very significant in swing strategy. To execute this strategy, one needs to be an expert in technical analysis and have high predicting powers for market trends and activities.
4. Position Trading Strategy/ Fundamental Trading Strategy:
Many people opt for this strategy. Investors do thorough fundamental research of the company and industry using different statistical formulas and then invest in shares anticipating multifold growth in the company, which will be reflected in their increased share prices. Investments are made for a longer time, for months or even years. Investors need technical and fundamental expertise to win with the strategy and gain from high prices over time. This strategy has a high chance of rewarding investors with high profits and involves less stress.
5. Technical Trading Strategy:
As the name suggests, a technical trading strategy is based on technical analysis knowledge. With the right tools and interpretation, traders can identify the entry and exit points. Any decision on nifty, Sensex or share follows the indicators of Moving Average (MA) ., EMA Exponential Moving Average, Relative Strength Index, and others.
Under this strategy, there's no particular time limit for holding securities, which may range from days to months and sometimes years.
6. Scalping Trading Strategy:
In this strategy, investors aim to extract profits from the most negligible trade with minor price changes, hoping that these small amounts will accumulate to a considerable profit. If planned with a disciplined exit strategy, scalping may help ensure profits in each trade. But, if any technical or fundamental aspects of this strategy are excluded, then gains may easily be replaced with losses.
7. Trend Trading Strategy:
There are two trends in the stock market: bullish trends (when the market is at its peak) and bearish trends (when prices are falling significantly). An accurate system or knowledge base is essential to determining the movement, and if effectively done, it may help with immense success in stock markets.
But risks and trends run parallel. Therefore, investors need a well-defined exit strategy with a trend trading procedure to settle in the bearish phase.
8. News Trading Strategy:
News and events play an essential role in the stock market, as a short announcement can have tragic effects on prices. News Trading Strategy is based on market expectations and news, which may travel at the speed of light on digital platforms.
Traders must have immediate news, updated details, and quick-decision-making skills to profit from this strategy.
Risks and stock markets are parallel threads, and one must address all the risks per trade factor before being tempted by the profits. Taking all necessary precautions before investing will elevate profitability, further associated with lower risks.
However, risk-taking ability is personalized and may vary from trader to trader. Therefore, traders must continually monitor the market to analyze trends, events, and news. Holding time for a stock or share plays a significant role in determining its risk.
Make sure you opt for an ideal strategy for your investment, considering the total funds you have, the amount you're willing to risk, and the period for which you are investing. Again, highlighting the importance of research and the basics, investors already well-versed in all the stock market basics will easily identify the low—and high-risk factors.
The Stock market is a vast universe; an investor must be well-versed in all the planets to gain accuracy. One might have expertise in day trading techniques and procedures, but they must also keep up with the latest stock market alerts, news, and events that might affect their investments. One should always have that intellectual strength from highly qualified trainers with the top Stock Market Course in Jaipur of NIWS.
All these events include the details of:
Interest Rate Plans,
Leading Indicator Announcements,
Financial, business, and economic updates.
To gain expertise in stock trading, investors must always begin with a list of stocks and should regularly scan their updates. Stock trading learning is a never-ending process; you must update your portfolio and sheet with recent news and events.
Investors must always decide, commit and assess the amount of capital they're willing to risk in daily trades. Successful traders risk only 1% to 2% of their trading accounts on each trade.
This minimizes the chances of losses in day trading, and if occurred, the small portion can easily be covered with future profits. Therefore, designate a fixed surplus of funds for each trade and always be prepared to lose.
Day trading and other stock market investment strategies require time and attention. Therefore, you must give most of your time and be patient with your holdings. Don't consider stock trading strategies if you have limited time to spare.
Stock Market opportunities can arise at any time, and a trader must be completely aware of the market to spot them. The key is to move quickly and be aware of the events.
Being a newbie in the market, start with a small process. Invest in two or three stocks in a session, as finding opportunities and trading with limited stocks is more accessible than a diverse portfolio.
Fractional Shares have also recently become popular among traders. These allow you to specify smaller amounts you can invest with your Demat.
Most investors think the stock market is at its best in the morning, as soon as it opens, and they start initiating their trades after that. However, the stock market's opening time reflects its volatility and high graph fluctuations.
A seasoned player will use the morning opportunity to analyze and record patterns. This will give them the best chance for a profitable deal. The market's middle hours are usually stable and the best trade time. If you wish to hold the rush hour opportunity, you must sit until the closing bell, the safest time for beginners to trade.
A beginner usually looks for affordable and low-price deals, ending up with penny stocks. However, these stocks are generally illiquid and may not have a high chance of hitting the jackpot. Penny Stocks trade between Rs. 1 and Rs.10 and are often delisted from stock exchanges.
However, some stocks listed between Rs. 9 and Rs. 12 are excluded from the penny stock category and may yield higher returns. So, do more research to identify such golden opportunities.
Market orders are executed at the best daily price and bear no price guarantee. In contrast, limited orders guarantee prices but have risky execution spots. In a limit order, investors decide the price and place orders simultaneously. Therefore, there is a chance that the market doesn't meet the quoted price, which will not fill the order, and investors will be unable to escape.
Investors must decide the type of orders they'll use to exit or enter trades. For example, experienced investors or day traders opt for different option strategies to hedge their positions as stock market trading strategies.
The stock market is highly volatile, and specific stock trading strategies may not always succeed. Most successful traders hit the jackpot in 40% to 50% of trades. They follow a rule of "gains on profitable trades > losses on losers, " which further ensures a profitable exit.
Always hold a limited financial risk on trades and ensure that all the entry and exit methods are clearly defined.
The stock market may tempt investors with profitable opportunities, but an investor and trader's journey is more about losses than profits. Moreover, day trading is challenging to master as compared to other options. In this, a trader needs to exit from each day's trades, recording profits for the clients, and this requires discipline, skill, and time.
Stock Market Trading Strategies may be proven to ensure profits, but they're useless unless you know technical and financial basics.
If you're willing to earn profits through daily trades or want to seize profitable stock market opportunities, then the Stock Market Course in Indore by NIWS can be your saviour. The highly expert and professional faculty will offer guidance on the share market from scratch, revealing their experienced tips to minimize losses.
How to invest in the share market: Are you one of those new individuals in the world, and investing seems complicated to you. If yes, then don’t worry about this article. You will learn how to invest in the share market easily just by sitting at your home via online applications on mobile phones or direct websites. As a beginner, learning plays an essential role in every field. In the case of the stock market, it is also the same for investing in the right way or manner. One must have to enrol in Stock Market Course In Delhi.
Are you looking for the right ways or places where you can learn about how to invest in the share market? Or how to buy shares through the online process? Then below the simple and easy steps are mentioned by following one can easily buy or invest in the share market of India just by sitting at their home.
Perhaps for opening a DEMAT account, individuals need some essential things or documents with themselves. Check the complete list of some documents which are mandatory while opening a DEMAT and trading.
Some factors should be kept in mind for those individuals who want to learn how to invest in the share market. Below the complete list of some essential elements is mentioned.
Identifying the financial goals should be the first work that every investor does before taking the step of investing. The purpose of every investor is different so never think that the goals of investing are universal.’
Deciding the investment horizon before investing in the share market is mandatory. And if you are wondering how to invest in the share market, then also start wondering how to make the right financial goals.
Risk-taking capacity is another essential factor that should be important while investing in stocks. If you are an investor and your ability to take risks is low, it is advisable to invest in those stocks that give stable returns and infected less because of market validity.
The loss can be prevented by maintaining a diversified portfolio. In simple words, we can say that the more you invest your money in different sectors, the risk capacity becomes more lower your investment.
Investing in stocks can be done in two major markets:
When any private company wants to go public by offering its shares for the first time, through Initial Public Offering (IPO), once the claims are open, interested individuals can apply for them. It is mandatory to have a DEMAT account if an individual is interested in applying for an IPO.
Investors will get a certain number of shares depending upon the company's market performance. Simply put, we can say that based on demand and supplies, the number of shares allotted to investors.
Once the shares are listed in the primary market, trading these shares can also be done quickly in the secondary market.
Generally, the secondary market is where every investor talks to invest his money. A DEMAT and Trading are mandatory if an individual wants to trade in the secondary market.
When investing in the share market, it is mandatory to learn everyday things about share market investing. Before investing in the share market, keep certain things in your mind that you never invest in without making a proper plan. Because it is not fixed that you will earn higher returns from investing, there might be chances of loss also. But the loss can be minimised just by basic knowledge of investing in the stock market. NIWS, the best Stock Market Institute in Delhi offers complete share market guidance that helps every investor make the best investment decision.
Generating savings or plans to invest has different benefits. An individual can make short- and long-term investment plans. Because of the risk management, there are various investors you would like to invest in mutual funds. However, before investing in mutual funds, every investor must know the advantages and disadvantages of mutual funds. In this blog, one will get complete information about the advantages and disadvantages of mutual funds.
A mutual fund contains money pooled from various investors. A dedicated and professional fund manager invests the pooled money in different investment securities in each type of mutual fund scheme. Investing securities can be silver, gold, stocks, bonds, treasury bills and commercial papers.
Investing in mutual funds is based on different classified securities. Hybrid funds, equity, and debt are the most prominent of all the types of securities. Equity funds invest their money in stocks or shares, and debt funds invest in fixed-income securities. However, in the case of hybrid funds, cash is invested in different proportions in both stocks and fixed-income securities.
However, choosing from these types depends on the investor's choice and objective.
Below is the complete list of the advantages of mutual funds. Learn about the benefits of mutual funds in this article and then decide to invest in mutual funds at your comfort. Perhaps, after reading this article, if you are confused or have some questions you have to ask, you can visit the share market classes in Indore, and under the guidance of experts, you can solve your every query.
In India, the fund house hires asset managers or fund managers who help manage mutual funds. These managers perform sound research and find the right stocks in which an individual can generate profit by investing his money.
In mutual funds, money is invested in multiple sectors of shares or stocks. By diversification, the loss in one asset class can be minimized by the profit earned in another.
The most overlooked advantage of mutual fund investing is liquidity. Buying and selling mutual funds can quickly be done during market hours, which is why they are considered highly liquid. Funds like ELSS are not highly liquid, as there is a need to invest in a specific lock-in period.
An individual can invest a minimal amount in mutual funds. The fund manager's fee in India ranges from 1% to 2.5%. The low cost of investment allows one to make higher returns if one stays for the long term. Returns growth is based on the amount grown over a given time frame.
Individuals can benefit from tax savings if they invest in mutual funds via the equity market. Up to Rs 1.80 lakh, the investment made in ELSS is free from tax as per the government's section 80C
Individuals can start investing in mutual funds with a minimum amount of Rs 500. Hence, one can opt for an SIP or a lump sum method of investing in mutual funds as per their convenience and comfort.
Investing in mutual funds comes with high transparency. All companies need to work under the guidance of SEBI by following its rules and regulations. Hence, they make every disclosure.
Below is the complete list of the disadvantages of mutual funds. Be aware of these disadvantages; avoiding them can increase the chances of loss.
In the above section, we mentioned cost as an advantage and disadvantage. In India, some mutual funds are associated with higher prices. Sometimes, you have to pay extra charges as a penalty if they exit from mutual funds before the predetermined time. Perhaps before the given or predetermined time, money withdrawal is not possible.
Through diversification, you can prevent the chances of loss, but on the other hand, it can also be a disadvantage as it prevents the possibility of earning profits. Various sectors can generate huge profits; not investing in them can be a significant loss.
A lock-in period is The worst disadvantage of mutual fund investing. Before the expiration of a predetermined time, it becomes difficult to withdraw your invested amount. Hence, converting your money into liquidity during an emergency becomes quite challenging.
The returns on mutual funds have fluctuated based on market conditions. Hence, returns are not fixed when investing in mutual funds. However, investors must know the risks before investing in mutual funds.
Perhaps it doesn't seem very easy to choose the right investment type, or if after selecting the investment, it's challenging to find where to start, then join the Stock Market Course in Indore at NIWS and learn how to invest in the right investment type. At NIWS, the experts will guide you and teach you how to make the right decisions on your investment path, which makes the track hurdle-free.
If you are willing to pursue the stock market or select the stock market as a career option and search for the right share market training in Indore, then NIWS (National Institute of Wall Street) is your answer. At NIWS, with the NISM certification course, students can easily find the different ranges of courses that suit their needs and financial goals. NISM certification courses are the best way to kickstart your career in the financial market.
This blog will discuss every important thing about the NISM exam, so keep your focus here.
The national arm of SEBI (Security Board Exchange of India) is NISM (National Institute of Security Market). In 2006, SEBI founded NISM as a public trust and conducted a range of courses, including currency derivatives certification, merchant banking system, and investment advisory. It provides market players with credentials. This institute has six schools that teach people about the professionalism and standards of the security markets.
It doesn’t matter what your educational background is. NISM certification is open to all, including students, workers, and employees.
Once you know what NISM is and how to apply it, it’s time to satisfy your curiosity by providing information about different NISM certifications.
1. Series I: Currency Derivatives Certification Examination: If any student wants to build a career in forex trading and international trading, then this course is the right to enrol. Hence, in this course, students will gain basic knowledge and information about the currency derivatives market.
2. Series II: Registrar and Transfer Agents Certification Examination: This NISM certification has been divided into two parts: a mutual funds transfer agent and a corporate transfer agent. Both certifications are mandated by themselves. Hence, one can enrol to build a career in the same field.
3. Series III: Securities Intermediate Compliance Certification Examination: If you are willing to become a stockbroker, depository participant, sub-broker, merchant broker, or underwriter, then you must choose securities intermediate compliance certification. This series also includes a B-part exam. This helps determine compliance requirements for compliance officers. However, this exam is optional or depends on the participant's choice.
4. Series IV: Interest Rates Derivatives Certification Examination: Enrolling in this certification acknowledges you about the interest rate derivatives markets and fixed income securities. Hence, any student who wants to build a career in the derivatives market must choose this course.
5. Series V: Mutual Fund-Related Examination: This exam is for the employees of AMCs that distribute and sell mutual funds. Students must cover three sub-modules, and the third module is optional.
6. Series VI: Depository Operations Certification Examination: This NISM course suits individuals who want to work in the NSDL and CSDL depository.
7. Series VII: Risk Management and Securities Operations Certification Examination: This kind of NISM certification requires working at a settlement firm and a stock broker.
8. Series VIII: Equity Derivatives Certification Examination: If you are willing to pursue or develop your career in options trading and futures, then go for this certification. Hence, working in the equity derivatives segment is mandatory.
9. Series IX: Merchant Banking Certification Examination: If you are among those participants who are willing to develop a career in sectors related to banking, then this course and certification is the only one which suits best based on your career requirement
10. Series X: Investment Adviser Certification Examination: This NISM certification course has two different types of modules, which both are mandated to cover. After completing this course, guiding your clients on the right path to investment becomes easier. Allocating funds in different instruments is the best example.
11. Series XII: Securities Markets Foundation Certification Examination: We all started as beginners at some point. Hence, NISM also knows this. That's why, to help every beginner at the end of entry-level, NISM introduced this examination. As a beginner, this exam is mandated for every participant. This course teaches you the financial market prospects from the basic level to the advanced level.
12. Series XIII: Common Derivatives Certification Examination: This NISM certification conducts separate exams on currency, derivatives, equity, and interest rates. However, in this series, all of them are covered simultaneously.
13. Series XIV: Internal Auditors for Stock Brokers Certification Examination: Did you know how an internal audit for a broker is conducted? This exam is conducted to obtain the knowledge required. Hene Individuals can also skip these exams if they are not interested in them, as this exam is non-compulsory.
14. Series XV: Research Analyst Certification Examination: For those participants in the financial market who want to work as a research analyst, completing this course becomes mandatory. By clearing this exam, you can quickly analyse the company's fundamental analysis. Hence, if you want to invest wisely in the stock market, enrol in the Stock Market Course in Indore.
15. Series XVI: Commodity Derivatives Certification Examination: Investing in the commodity market is one of the best ways to diversify your portfolio. If you want to invest in the commodity market, enrol in this NISM certification exam.
16. Series XVII: Retirement Adviser Certification Examination: Planning for retirement at an early age becomes more essential. Because most of the time, generating active income in old age becomes quite tricky. After clearing this exam, you can guide people on how they can save and invest money for retirement. Nowadays, this option for building a career has become lucrative.
17. Series XVIII: Financial Education Certification Examination: To assess your final literacy, this certification helps you. Hence, this exam is taken as voluntary.
18. Series XIX-A: Alternative Investment Funds Distributors: Like mutual funds, alternative funds work. Hence, this exam or NISM course teaches the correct way to invest in alternative funds. Further, this exam is considered voluntary.
19. Series XXI-A: Portfolio Management Services Distributors: Did you know the right place where rich people invest their money? For managing their money, this exam will make you qualify.
Below are some important points that may help answer your question about why you should take the NISM certification examination.
⇒ SEBI orders conduct both exams and institutions. SEBI also funds the NISM exam, which is why NISM is considered the best financial institution in the country.
⇒ The NISM certification has a tremendous and positive impact on your CV. It can increase your chances of job opportunities in financial markets.
⇒ The NISM provides a concise kind of study material. Any student or participant can easily pass the NISM certification exam by learning the given study material. Hence, there is no need to use any other or external resource to pass the exams.
⇒ NISM courses are less expensive than other financial courses. The cost of NISM certification ranges between Rs 1500 and Rs 3000.
⇒ You can apply for the NISM exams based on your academic background. Hence, there are no particular restrictions for any individual. All you need to do is develop your curiosity about this topic of the financial market.
For various security market participants, NISM helps to conduct certification exams, and SEBI (Security Board Exchange of India) also functions as an Intermediary as a mandate. However, if any person or student is eager to learn about the stock market or Indian Security market, they take the exam.
For the NISM examination, having an exceptional degree or being at a specific age is not compulsory. Anyone eligible to take the NISM certification exam or willing to learn about the Indian stock market or security market can also enrol.
Every student who enrols in the NISM examination must pay Rs 1500. Payment can also be made through debit/credit cards and other mobile wallets.
The value of certification remains valid for three years. The certificate's validation details are available on the Association of Mutual Funds (AMFI) website.
After reading about all the courses, one can quickly become confused and can’t decide which option is best for himself. But don’t worry. The National Institute of Wall Street (NIWS) is always here to solve every problem related to the financial and stock markets. If your motive is to build or develop your career in the stock market, then visit NIWS and take complete guidance from the 15 years of well-experienced faculty and build your dream career with the best finance experts.
Start with a demonstration class.
