skip to main |
skip to sidebar
Sachin Karpe explains the shadow banking system is a network of financial institutions comprised of non-depository banks e.g., investment banks, structured investment vehicles (SIVs), conduits, hedge funds, non-bank financial institutions and money market funds. Shadow banking institutions generally serve as intermediaries between investors and borrowers, providing credit and capital for investors, institutional investors, and corporations, and profiting from fees and/or from the arbitrage in interest rates says Sachin Karpe. The shadow banking system may still be exposing the larger financial markets to excessive systemic risk. While all investments expose the investor to some level of risk, the unknown consequences of having such a large shadow banking system may lead some investors to prefer more conservative investment strategies in the years ahead. Shadow financial institutions still aren't subject to the same regulations as traditional, depository banks. This means they remain highly leveraged, with a high ratio of debt relative to their liquid assets on hand to pay immediate claims. Higher leverage equates higher returns, but it also carries outsized risk.
Many people start an SIP in a mutual fund and terminate it when the market is on the decline. This defeats the very purpose of investing via the SIP. As with any investment, you should link the SIP with a specific financial goal. If you don't keep an eye on your goals, you will invest in a haphazard manner and fall short of your requirements. List your financial goals in order of priority, fix a time frame for achieving these, and finally, quantify each goal in terms of the corpus required says Sachin Karpe. Fund houses allow SIP investments on specific dates of a month. One can provide ECS mandate or a direct debit instruction to be carried out on, say, the 1st, 5th, 15th, or 20th day of a month.
There are thousands of people around who either know very little about investing in mutual funds or are bogged down by the myths surrounding them. Nielsen Company, through its consumer behaviour surveys, has find out some common myths and tried to debunk them, which should make your mutual fund investment process a happy experience says Sachin Karpe. Here are the top 3 sources to purchase mutual funds: Advisors - These are certified to provide financial advice as well as sell mutual funds to investors. Banks - They sell mutual funds through their employees. One can visit a bank to identify the funds and complete the investment process.
