There’s a growing perspective in certain circles that the traditional “buy and hold” style of investing is no longer viable. It’s easy to see why this viewpoint has emerged. Businesses today are subject to a multitude of ongoing changes, such as technological advancements and shifts in regulations and policies. Simply buying stocks and forgetting about them seems increasingly challenging. So, it appears that “buy and hold” investing has evolved into more of a “buy and watch” approach. Investors should still plan for the long term but remain vigilant about evolving trends.
This is where the concept of Megatrends Investing comes into play. The term “Megatrends” was coined by John Naisbitt in the 1980s to describe long-term changes that have transformative effects on various aspects of society, including businesses. By the early 2000s, many investment firms had embraced this approach to shape their investment strategies. In recent years, the adoption of Megatrend Investing seems to have gained momentum.
What Exactly Is Megatrend Investing?
Change is a constant in our world. Sometimes, these changes follow cyclic patterns, while at other times, they represent transformative forces that shape entire industries and societies. Megatrends are the latter—long-term changes with profound implications for our future. They generate numerous sub-trends as they impact various sectors and industries. Investors who grasp these Megatrends can position themselves to capitalize on the opportunities they create.
Megatrend Investing revolves around identifying and understanding forces capable of reshaping the ways businesses and consumers function. It’s about recognizing the investment opportunities that emerge from these shifts. Short-term investors often focus on immediate opportunities and the next market fluctuation. In contrast, long-term investors take a strategic approach, seeking the direction of sustainable growth and identifying areas where a company’s growth potential is underappreciated. People frequently underestimate the long-term, non-linear growth possibilities. Megatrend Investing helps cut through short-term noise and concentrate on enduring growth prospects.
Successful businesses allocate capital to ideas with substantial future growth potential. Many companies leverage Megatrends to forecast where future profits will emerge and then work backward to formulate strategies to reach them. Investors should adopt a business-like mindset when approaching investments. This method minimizes the likelihood of being caught off guard by foreseeable trends, allowing them to incorporate these trends into their forecasts systematically.
Megatrend Investing as the Core of an Investor’s Portfolio
Studying Megatrends enhances the predictability of forecasted growth, making it a cornerstone of an investor’s portfolio. This approach offers several advantages:
Streamlined Analysis: Instead of conducting exhaustive bottom-up analyses of every company in the market, it’s simpler to identify broad trends and themes with exponential growth potential and then focus on companies poised for significant growth.
Diversification: Megatrend Investing transcends rigid sector or market capitalization classifications, offering insights into the future growth potential of companies while promoting risk mitigation through diversification.
Portfolio Alignment: By assessing the relative potential of various trends and diversifying positions across those with the highest growth potential, portfolios remain aligned with future opportunities.
Profit Dynamics: Studies indicate that equity returns are not evenly distributed across time, industries, or individual stocks. They, however, correlate with profit stream dynamics, which are primarily driven by long-term trends. Hence, a Megatrend approach is well-suited to track profit movements and benefit from them.
Behavioral Bias Mitigation: Investors often fall prey to behavioral biases, such as recency bias, where recent experiences heavily influence future projections. Megatrend Investing helps to understand non-linear changes and exploit market biases effectively.
Through the Megatrend approach, investors build portfolios geared toward high-growth compounders with favorable conditions to create substantial economic value for shareholders. It’s about investing today while anticipating the changes that tomorrow will bring.
by gopal.krishna185Life insurance concept with leaflets and magnifying glass in monochrome
Your monthly income serves as the backbone of your financial stability, covering essential expenses like groceries, household bills, school fees, and even those cherished family vacations. Beyond your routine spending, a portion of your income is allocated for savings, addressing both unforeseen financial emergencies and long-term aspirations such as buying a home, funding your children’s education, and securing your retirement.
Two key financial objectives should guide your financial planning:
Ensuring you have enough savings to meet significant life goals without the risk of outliving your financial resources.
Providing sufficient financial protection for your family, ensuring their well-being in case of your untimely demise.
Life insurance serves as a powerful tool to address both of these crucial needs. Let’s delve deeper into how life insurance plans offer lifelong financial protection.
Financial Protection for Your Family:
In the unfortunate event of the primary income earner’s death, your family requires a financial safety net to maintain their accustomed standard of living. This not only safeguards your accumulated savings for future needs but also shields it from obligations like outstanding loans. Life insurance plans offer the ideal financial protection your family needs.
How Life Insurance Helps:
Life insurance payouts play a pivotal role in helping your family cover regular expenses, including outstanding debts, while also securing future financial objectives such as your children’s higher education. Consequently, life insurance mitigates the financial risk posed by the premature loss of the primary income earner, often referred to as the “dying too young” risk.
Saving for Long-term Requirements:
You likely harbor dreams for your family, whether it’s sending your child overseas for education, purchasing a home, or building a financial cushion for medical emergencies. Regular savings and investment are vital to transforming these aspirations into reality. However, what would happen to these dreams if an unfortunate event were to occur?
How Life Insurance Helps:
Life insurance companies offer savings plans that provide a dual benefit: financial protection and wealth accumulation. These plans are structured so that the premiums you pay over time help you accumulate sufficient savings by the policy’s maturity date, ensuring you have the means to achieve your financial goals and milestones.
Protection Against Outliving Your Savings:
As life expectancy in India increases, individuals are expected to live longer after retirement. This presents a financial challenge due to the impact of rising annual inflation on retirement income and potential health emergencies.
How Life Insurance Helps:
Life insurance companies offer plans designed to provide financial protection to families in case of the insured’s untimely demise while also allowing for investments to secure future needs like retirement. These plans ensure that, upon surviving the policy term, you have ample savings to address your retirement requirements. Life insurance providers offer various retirement income options, such as annuities, allowing you to choose from regular income for a fixed period, continued income for your spouse after your passing, return of the principal amount, and more.
In conclusion, the need for lifelong financial protection is evident. Life insurance plans act as steadfast companions, shielding your family from various risks and ensuring all your family’s dreams are realized. They serve as a comprehensive solution to secure your family’s financial future and provide peace of mind.
Real estate is a well-known appreciating asset, historically offering robust returns to investors. As Franklin D. Roosevelt famously said, “Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world.” Today, this holds true as real estate remains one of the best assets for investment and wealth preservation.
Investing in property presents an opportunity for a comfortable retirement, extra savings, or an additional income source. With the right timing, developer, and maintenance, stable rental income can be guaranteed. The real estate sector has evolved over the years, with shorter buying and selling cycles due to a younger, educated, and more informed buyer base. The COVID-19 pandemic accelerated these changes, highlighting the importance of spacious and functional homes suitable for remote work.
The pandemic increased the demand for larger living spaces, leading to a 65% surge in sales during the second quarter of 2023 in Pune alone. Notably, luxury properties accounted for 18% of total sales in 2022, compared to just 7% in 2019. India’s growing economy, coupled with development across various sectors, makes it an opportune time to invest in real estate.
Low bank home loan rates and attractive financing options, along with tax benefits on interest payments, make buying a home financially sound. The Real Estate (Regulation and Development) Act (RERA) has further bolstered the sector’s safety and transparency. Rental income from non-occupied properties is on the rise, often covering maintenance costs and part of the EMI.
On a national scale, real estate is the second-largest employer and supports over 250 industries, contributing nearly 6-7% to the country’s GDP. This is projected to grow to approximately US$1 trillion by 2030, contributing 13% to India’s GDP by 2025. The process of selecting a property has become more accessible and convenient, thanks to technology and online resources. Virtual reality allows for property viewing from anywhere in the world.
In today’s buying scenario, developers and channel partners handle property registration and documentation, enhancing the seamless buying experience. Government property records are readily available online and lost registered documents can be easily procured. Bank loans often include property title verification, providing peace of mind to buyers. Property re-development projects further enhance returns, adding to the long-term value of your investment.
The current real estate market offers ease of buying and safety through RERA compliance. Factors like Unified Development Control and Promotion Regulations (UNDCPR), which offer Floor Space Index (FSI), are attractive to new buyers. Developers are maintaining competitive pricing to sustain sales and cash flows. Given rising land prices and input costs, property prices are likely to increase in the future, making it an ideal time to invest in real estate. A property purchased in a promising location with good amenities from a reputable developer is akin to a liquid asset that can be monetized quickly when needed.
In Delhi, the price of 10 grams of 22K gold is ₹55,100, while the price of 10 grams of 24K gold is ₹66,100. Gold prices increased by ₹10 on Sunday. According to the website Goodreturns, one gram of 22K gold was priced at ₹5,495, while 24K gold costs ₹5,995.
‘K’ or carat is a term used to measure the purity of gold. 24K gold is called pure gold as it has 99.9 percent purity, is in a liquid form, and does not contain traces of other metals. On the other hand, 22K gold has traces of other metals like copper and zinc and is commonly used for making jewelry.
Here are the gold prices for major cities on September 24:
Delhi: 22K Gold – ₹55,100, 24K Gold – ₹60,100
Mumbai: 22K Gold – ₹54,950, 24K Gold – ₹59,950
Kolkata: 22K Gold – ₹54,950, 24K Gold – ₹59,950
Chennai: 22K Gold – ₹55,210, 24K Gold – ₹60,230
Bengaluru: 22K Gold – ₹54,950, 24K Gold – ₹59,950
Gold prices are influenced by various factors, including currency exchange rates, interest rates, global demand, and government policies. When the Indian rupee weakens against the US dollar, gold prices tend to increase. International factors such as global economic growth, the strength of the US dollar against other currencies, and overall demand for gold also impact its price. Additionally, interest rates play a role; when interest rates rise in countries like the United States, gold prices tend to fall, and vice versa.
Silver Prices: The price of silver increased by 30 paise on Sunday. One gram of silver is worth ₹75.80, while in Delhi, Mumbai, and Kolkata, the price of 10 grams of silver is ₹758. In Chennai and Bengaluru, the cost of 10 grams of silver is ₹793 and ₹742.50, respectively.
Silver is considered more affordable than gold, and its price in India is influenced by various factors, including gold rates. If gold prices rise, silver rates often follow suit. Furthermore, silver prices can be influenced by large purchases.
On Friday, Mahindra Finance acquired a 20% stake in Mahindra Insurance Brokers Ltd (MIBL) for ₹206.39 crore, making it a wholly-owned subsidiary of the company. The acquisition was completed after receiving approval from the Insurance Regulatory and Development Authority of India (Irdai).
Mahindra Finance purchased 20,61,856 equity shares of ₹10 each of MIBL at a price of ₹1,001 per share. As a result, MIBL became a wholly-owned subsidiary of Mahindra Finance, effective from September 22, 2023.
JPMorgan has made the decision to include India in its widely followed emerging market debt index, which is expected to pave the way for significant inflows into India’s economy, benefiting its current account and fiscal deficits. India’s local bonds will become part of the Government Bond Index-Emerging Markets (GBI-EM) index and the index suite, which is used as a benchmark by global funds totaling approximately $236 billion, according to JPMorgan’s announcement.
This development is seen as a crucial moment for India, one of the world’s fastest-growing major economies, as it strives to enhance its presence in international financial markets.
JPMorgan has identified 23 Indian Government Bonds (IGBs) with a combined notional value of $330 billion as eligible for inclusion in the index. These bonds all fall under the “fully accessible route” for non-residents.
JPMorgan anticipates that India’s weight in the GBI-EM Global Diversified Index will reach the maximum threshold of 10%, and it will represent approximately 8.7% in the GBI-EM Global Index.
Following this announcement, India’s benchmark 10-year bond yield initially dropped 7 basis points to a two-month low of 7.0788%, and the rupee strengthened against the US dollar. India’s Chief Economic Adviser, V. Anantha Nageswaran, welcomed this development, highlighting the confidence that financial markets and participants have in India’s potential, growth prospects, and macroeconomic and fiscal policies.
The inclusion of Indian bonds in the index is scheduled to commence on June 28, 2024, and will take place over 10 months with 1% increments in its index weighting. This gradual approach aims to bring India’s index weighting to a maximum of 10%.
While this development is expected to have positive implications for India’s interest rates and foreign exchange markets, it may lead to outflows from domestic government bonds of other countries, resulting in reductions in their index weightings. Thailand is projected to experience the largest reductions at 1.65 percentage points, while South Africa, Poland, the Czech Republic, and Brazil are expected to see reductions of 1-1.36 percentage points, according to JPMorgan.
India initiated discussions on including its debt in global indexes in 2019 and took steps to make its bonds more accessible to foreign investors by removing foreign investment restrictions on some government securities in 2020.
Foreign investors currently own less than 2% of India’s outstanding government debt, but this is expected to increase, with some estimates suggesting it could rise to 5%.
JPMorgan’s announcement also mentioned that Egypt’s eligibility in the GBI-EM series would be reviewed for three to six months due to reported “material” obstacles in currency repatriation. If these obstacles persist, a status review will be triggered for Egypt’s potential removal from the GBI-EM series.
Egypt will remain in the index during the review period.
With the increasing number of credit card defaults, individuals struggling to pay their credit card bills in full may find a balance transfer to be a useful solution. Balance transfers typically offer lower interest rates compared to regular credit card rates, and some issuers even provide introductory offers, such as zero interest for a limited period, which can be beneficial for quickly paying off credit card debt.
However, before opting for a balance transfer, it’s essential to comprehend the interest rates and changes in terms and conditions once the introductory period expires. Balance transfer fees can vary from one bank to another, ranging from 0% to 2% per month, depending on the card issuer.
Understanding the associated charges is crucial. Many card issuers impose a processing fee, typically between 1% and 3% of the transferred amount. Some banks may also charge a flat fee for balance transfers, which can range from INR 100 to INR 300 or more, depending on the card provider.
Using the balance transfer feature responsibly is vital, as frequent transfers and delaying interest payments can negatively impact your credit score.
Adhil Shetty, CEO of Bankbazaar.com, suggests that before transferring your debts, you should check interest rates, balance transfer fees, and payment duration, and identify any hidden charges. Opt for cards that offer zero charges on a certain number of transfers, or choose a card with a low interest rate to avoid additional costs.
Paying only the minimum due can lead to substantial finance charges on the remaining balance, and new purchases may not qualify for the interest-free period. Rohit Chhibbar, head of Credit Cards Business at Paisabazaar, explains that by transferring the balance to another credit card, individuals can save on high-interest charges, as the entire amount is converted into EMIs at a lower interest rate. However, not all individuals with outstanding balances on their cards may be eligible for a balance transfer offer.
Comparing interest rates is essential. Cardholders should compare the interest rates on their existing credit cards with those offered by the new credit card to which they plan to transfer the balance. The goal is to secure a lower interest rate on the transferred balance, significantly reducing the cost of carrying debt.
Cardholders must also check if the new credit card charges a balance transfer fee, typically a percentage of the transferred balance. This fee could offset potential savings from the lower interest rate. It’s crucial to ensure that the new credit card has a sufficient credit limit to accommodate the desired balance transfer.
While balance transfers can be a suitable option, especially for those incurring substantial monthly credit card interest, individuals should consider whether they can save significantly and clear their dues promptly. A personal loan with a lower interest rate may also be a wise alternative. Personal loans offer longer terms than balance transfers, making them a better choice if more time is needed to repay the debt. On the other hand, a balance transfer with a zero percent or low promotional interest rate can be an excellent short-term solution for quickly eliminating credit card debt.
“A personal loan can be especially helpful in consolidating multiple credit card debts instead of transferring balances from card to card. Moreover, a longer tenure translates to a lower monthly EMI, but you would have to pay a higher amount in the long run as interest. Hence, carefully calculate the total cost of each alternative before choosing one,” advises Chhibbar.
Credit cards may charge interest rates of 2-3% per month, depending on the card type and grace period, while personal loans may be available at interest rates ranging from 12-20%. Individuals can negotiate for a lower interest rate based on their credit score and income. Banks evaluate the borrower’s profile and offer loans based on eligibility criteria.
Therefore, it’s crucial to compare options and select the one that imposes the lowest financial burden and helps you eliminate debts promptly before they negatively impact your credit score.
The Federal Reserve, in its latest policy meeting, chose to maintain its benchmark interest rate unchanged, marking the second time it has done so in three meetings. This decision suggests a shift towards a less aggressive stance against inflation as price pressures have abated.
Furthermore, the Fed’s policymakers indicated that they anticipate a single rate hike later this year and expect their key interest rate to remain higher in 2024 compared to most analysts’ previous expectations.
At the conclusion of their latest meeting, the 19 members of the Fed’s rate-setting committee expressed increased optimism regarding their ability to successfully control inflation, bringing it down to their targeted 2% level without triggering the severe recession that many economists had feared. This optimistic outlook aligns with what economists refer to as a “soft landing.”
In their newly released quarterly projections, the policymakers shared their expectations for faster economic growth and reduced unemployment in the current year and the next when compared to their projections from three months ago. Despite anticipating robust growth, they also anticipate a continued moderation in inflation.
These expectations signal that the Fed officials believe they can achieve gradual disinflation without causing disruptions in the labor market or triggering a significant recession. As Subadra Rajappa, the head of rates strategy at Societe Generale, noted, they appear confident that they can achieve their objectives without causing major economic disruptions.
Consumer inflation in the United States has dropped from a peak of 9.1% in June 2022 to 3.7%. Fed Chair Jerome Powell emphasized the importance of further data to ensure that inflation remains on a sustainable path toward its target level. However, he indicated that the Fed is nearing the end of its cycle of interest rate hikes, and a soft landing seems plausible.
Powell stated, “We’re fairly close, we think, to where we need to get,” highlighting the Fed’s primary objective of achieving a soft landing without causing a significant economic downturn.
The latest decision maintains the Fed’s benchmark rate at approximately 5.4%, a result of the 11 rate increases implemented since March 2022. Powell noted that these earlier rapid rate hikes now allow for a more cautious approach to rate policy.
The Fed officials’ projections for next year include just two interest rate cuts, a reduction from the four cuts forecasted in June. They anticipate their key short-term rate to remain at 5.1% by the end of 2024, a level higher than it had been since the 2008-2009 Great Recession until May of this year.
Reducing the number of projected rate cuts for 2024 is a positive sign, as it suggests a decreased likelihood of an economic recession that would require multiple rate cuts for economic support.
The Fed’s approach to rate increases reflects a growing awareness of the risks associated with raising rates too high, as opposed to the previous focus on the risks of not doing enough to combat inflation.
While inflation has declined overall, certain services such as auto insurance, car repairs, veterinary services, and hair salons are experiencing faster price increases compared to pre-pandemic levels. Despite this, recent data indicates progress toward the Fed’s desired outcome: Inflation, excluding volatile food and energy prices, has posted its lowest monthly readings in nearly two years for June and July.
Several factors pose potential threats to rekindling inflation or weakening the economy. Rising oil prices have led to increased gasoline costs, potentially worsening inflation and reducing consumer spending. Additionally, the ongoing limited strike by the United Auto Workers union against major U.S. automakers could contribute to higher vehicle prices.
The Rajasthan High Court has upheld the removal from service of a constable with the Rajasthan Armed Constabulary who was found to be in a live-in relationship with a married woman, also a constable with the Central Reserve Police Force (CRPF). The court rejected the constable’s argument that his actions were justified by Indian mythology.
Background
The constable, Hari Singh, was served with a charge-sheet in September 2007 after he was found to be living with a married woman while serving in the Rajasthan Armed Constabulary. The authorities dismissed him from service for violating the Rajasthan Civil Services (Classification, Control and Appeal) Rules, 1958.
Court’s Decision
Justice Ashok Kumar Gaur, in a single-judge bench, dismissed the constable’s contention that he had the right to lead his personal life as he pleased. The court emphasized that government servants are bound by certain code of conduct rules, even outside of working hours, to maintain high standards in private and public life.
The constable’s argument that Indian mythology justified his conduct was also rejected by the court. It stated that customs and references to Indian mythology could not be used to violate statutory provisions governing conduct rules for government servants.
The court upheld the action against the constable, noting that he was living in an illicit relationship while serving in a disciplined police force and failing to meet his legally wedded wife and children.
Conclusion
The Rajasthan High Court’s decision underscores the importance of government servants adhering to prescribed code of conduct rules and maintaining high standards in their personal and public lives.
The Calcutta High Court has taken action to expunge aspersions cast against the State Crime Investigation Department (CID) by Justice Abhijit Gangopadhyay in a money laundering case. The case pertains to the alleged failure of a cooperative society, the Alipurduar Mahila Rindan Samabay Samity, to return deposits to several individuals, amounting to approximately ₹50 crores.
Background
Justice Gangopadhyay had transferred the investigation of this case from the CID to central agencies, the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED), on August 24. Subsequently, he rejected a plea by the CID to recall the transfer order on September 15. In this order, Justice Gangopadhyay criticized the CID for allegedly playing with the court and termed the plea “absolutely frivolous.”
High Court’s Decision
The CID challenged the September 15 order before a division bench of the Calcutta High Court. The bench upheld the transfer order but quashed Justice Gangopadhyay’s observations against the CID. It expressed that the single judge may have been influenced by emotions while making those remarks. The division bench also set aside the ₹5 lakh cost imposed on the CID and expunged the aspersions cast against it.
The division bench maintained that the CID’s plea for a recall of the transfer order was rightly rejected by Justice Gangopadhyay on merits. It found no fault with the single judge’s decision to transfer the case to the CBI, given the magnitude of the alleged offenses and the need to inspire public confidence.
Conclusion
The Calcutta High Court’s decision highlights the importance of maintaining objectivity and professionalism in court proceedings and underscores the significance of public confidence in investigations involving substantial sums of money.
