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ETFs vs. Actively Managed Funds


You must have heard enough about the need for a strong investment plan. Each investor has a different set of investment goals. The capital available for use, the liquidity expected the plan for emergency funds and many such factors are known to influence the investment strategies. If you are looking to make large profits and cut down taxes, and if you do not have the time to do this, you would be able to approach an investment advisor to get the best recommendations.

With investments, there are funds that you can fully control yourself. These are great choices if you know the chosen investment option well and if you have the time to watch the market and take all the vital decisions. But if you are looking for assistance in managing your funds, then there are many managed funds available. Among them, ETFs and actively managed funds are the most popular choices.

ETFs or exchange-traded funds

There is an assortment of assets picked for the ETF. The ownership of these assets is then shared. The bulk ownership is distributed in this case and the individual investors do not have ownership of any of the underlying assets. But the shareholders can all claim their share in the profits made by these assets.

Actively managed funds

With trading and investments a lot has changed and now there are even automated bots taking care of the entire process. But there are many who still feel more comfortable working with a personal fund manager. Actively managed funds are where there is a fund manager allocated to handle your funds. The active involvement of the fund manager results in higher fees but you also get the best recommendations if you choose the right fund manager.

Portfolio management

With ETFs, there is one major advantage and that is the relatively lower fee. Actively managed funds and mutual funds in general still hold a major share in the managed funds category. But there are more and more financial institutions now offering ETFs where the active management is removed resulting in a lower fee. This is thus becoming one important choice for small level investors who are not willing to pay large fees to the fund managers.

With ETFs, you get to access your portfolio and understand the transactions every single day. With actively managed funds there is very little control that the investor has in terms of the transactions that take place. There might be periodic disclosure of the portfolio. But the fund manager handles all the transactions.

Tax matters

With ETFs, there is the transfer of securities that take place. Each of the shareholders that share the ownership is not entitled to the absolute ownership of any of the assets. Without ownership, the taxes to be also come down. In terms of tax efficiency, ETFs are thus slightly better than actively managed funds.

Net asset value

With actively managed funds the fund manager invests the capital on mutual funds and the NAV or net asset value is calculated when the session closes even if you place a closure request much earlier. With ETFs, the closure can happen at any point of the day when the session is active.


Altcoin is the abbreviation for “Bitcoin Alternative”. “Altcoin” is the combination of two words “alt” signifies alternative and “coin” signifies cryptocurrency. Together they are described as alternative cryptocurrencies of Bitcoin. After the success story of the first ever Cryptocurrency Bitcoin, there are many peers to peer digital cryptocurrencies are emerged in the trading market to taste the same success. While Bitcoin remains the first and best-known cryptocurrency in history, other digital cryptocurrencies are trying to improve their level equivalent to Bitcoin.

Majority of the altcoins are improved upon the basic framework provided by Bitcoin, thus they are peer to peer, decentralized network, involves mining process by which users have to solve complex problems to unlock blocks. It offers an inexpensive and efficient way to carry out transactions in the network. Even with overlapping features, altcoins differ widely from each other. Altcoins differ from Bitcoins by different types of algorithms, different types of ways to mine energy, etc.,

The first ever Altcoin introduced in the market was Namecoin. It was based on the Bitcoin code, uses the same proof of algorithm. It was introduced on April 2011, Namecoin primarily varied from Bitcoin by making the users less visible, making it private decentralized network and allowing users to Register and Mine on their own using .bit domains, which was aimed to resist censorship and increases anonymity. Some of the recent examples of Altcoin are Litecoin, Dogecoin, Ethereum, Ripple, Etc., Litecoin is the closest competitor to Bitcoin in the current market.

Below are the Top 10 Altcoins launched in the digital market:

  • Ethereum: Ethereum is not just a cryptocurrency, it is blockchain platform empowered by digital cryptocurrency that enables developers to build and deploy decentralized applications.

  • Ripple: Ripple is nothing but the Real Time Gross Settlement system that ensures solutions for global financial settlement. It is an open source protocol which allows fast and easier transactions all over the world.

  • Litecoin: Litecoin is Peer to peer digital currency that allows instant and low to zero cost payments at any time to anyone in the world.

  • Dash: It is a combination of two words”Digital” and “Cash”.They are quick and transactions are instant.

  • NEM: It is an acronym for “New Economy Movement” which is designed to offer the streamlined method to secure the transaction ledgers. It is the worlds first “Smart Asset” Blockchain.

  • Ethereum Classic: Ethereum Classic is public, open source, blockchain based technology platform that enables Smart contract functionality.

  • Monero: The specialty of this cryptocurrency is that it allows the user to send and receive funds in the blockchain platform without the transactions are visible public.

  • Zcash: It provides privacy to the users by shielding the transactions rather than making it private like Monera cryptocurrency.

  • Decred: Digital currency invented to be decentralized, secured, sustainable, self-ruling currency with consensus algorithm.

  • PIVX: Private Instant Verified Transaction is a form of online digital money that can be transferred all over the world using blockchain technology.

Understanding Inflation and Effectively Managing it


Inflation is the periodic increase in the price of goods and services. This causes a wide change in our cost and standard of living. This is pure economic definition, but in general, it means that over time we need to spend more of our money to satisfy our needs ranging from day to day to long term. Inflation has an effect on the economy as a whole. It has connected effect when it affects the value of a common currency, for example, the dollar.

When the price of goods increase, our cost of living will decrease and this has an effect on our standard of living and that is why inflation is considered bad for an economy and its people.


  • Inflation is caused when the demand for particular good and services in an economy increase continually. This happens when the money supply in an economy increases.
  • Inflation occurs when there is an increase in the cost of production in an economy. This means the manufacturing a good from the first step till its completion and the costs associated with this is increasing and thus the producers impose this increased cost on the price at which it will be sold to the market.

Measures of inflation:

The government has formulated certain figures or indices to measure inflation effect on the rise of prices. They are:

1. Consumer price index: this is the value of the rise in the price of necessary goods in daily use like groceries, gasoline etc. These are called consumer goods. This measures price change from the perspective of the purchaser.

2. Producer Price Index: this measures the change in selling prices over time and this affects the perspective of the seller.

Some of the other measures which determine inflation are:

  • GDP Deflator: a measure of the rise in the price of a good with regard to the gross domestic product of the economy.
  • Asset price inflation: an increase in the price of fixed assets or financial assets like land, stock etc.
  • Regional inflation: price variation in different places which fall under an economy and the effect of these on the entire economy.
  • Historical inflation: making a calculation of price change in the country in periodic effect, comparing the living standards from previous econometric date obtained.

Such calculations and findings help in knowing what causes inflation and what will be the effect of it on the standard of living. This is helpful in regulating measures to manage the blow on the cost of living of people and economic challenges. Hence the inflation can be managed accordingly by the research of the changes in the economy.




What Can Entrepreneurs Learn From Stock Market Variations?

It is said that the best of a man’s capabilities is revealed only when he/she is made to perform under extreme conditions. Similarly, variations and fluctuations in the stock market can be viewed as an opportunity rather as a threat that needs to be feared, as these present business leaders and managers with several different real-life scenarios that can make them a better a leader and their company a better performing business entity.

Some of the things that entrepreneurs can learn from stock market variations include:

  • Not taking decisions or getting involved in the process of decision-making in a hurry based on the declining market trend. Rash decisions will create bigger losses than the under-performing stock market

  • Possess the capability to notice specific trends and cycles that will repeat itself naturally. This is a good way to seize profitable opportunities, while carefully avoiding the non-profitable ones.

  • Understanding where to invest money and when. Market fluctuations can be a trying period, however, if you know where to put your money, then the burden is reduced to half

Some of the interesting things that a stock market fluctuation presents to business entrepreneurs include:

  • It provides an opportunity to tap into the company’s internal venture during the stressful period, which can be further pursued to generate profits.

  • It forces businesses to innovate and invent newer methods and strategies that are developed purely based on the knowledge of the organization’s presently available resources and capabilities.

  • It allows the management and the employees to learn new business cases and adopt low learning.

  • It promotes the development of the organization’s strong and intangible competencies in the areas of specific domains that the firm is comfortable in doing business.

  • It also provides businesses with an advantageous position to leverage the developed competencies to the organization’s benefits.

  • It provides scope for improvement based on internal competencies and innovations to deal with the present fluctuating market from past business-specific experiences.

  • It bestows the management and staff of the business to develop certain market-specific expertise and skills to avert major blows that could affect the regular business operations.

Thus, it is important not be stressed or remain under pressure during economically changing times. Rather, entrepreneurs must stay stable and invest in stocks that are clear and understandable. Moreover, experiences and trade history can teach a thing or two in recognizing profitable trends and opportunities based on the entrepreneur’s tolerance for risk.

The real benefits of investing in real estate

There are now various ways to plan your investment. You might have personal finance assistants helping you with your personal finance. But one of the oldest types of investments that we know about is the investment in real estate.

You do not have to be an expert in investment strategies to invest in real estate. All it takes is meticulous planning and the right timing, and, of course, a reliable source of capital! And when you have all that, you have with you an investment that would never go a waste.

Appreciation value

If you choose the right property in the right spot then you can be assured of an impressive appreciation value. There are some places where real estate boom has result in the investment getting multiplied several folds in a span of a few years.

Tax cuts

You would be paying taxes on the property being owned but there might be a lot of other places where the collective tax paid goes down. If you have applied for a loan for purchasing the property then taxes on that loan would be cut off. Rental income also attracts lower tax than similar investments in business and other modes of self-employment.

The ownership of a tangible asset

A brick and mortar establishment almost always never goes a waste. If you have a residential property that you have invested in then you could either use that as your place of residence or rent it out. If there is a commercial property then it would definitely fetch some large rental incomes. You have the absolute freedom to work on your property and modify it, spend on it and renovate it as and how you please because you are the absolute owner of the property.

Easy loans

There is a surge in the number of home loan options. So you also have the benefit of choosing from a variety of loan interests and tenures. The repayment structure as well as the loan closure process is also simpler. On the whole financing for real estate is one of the most convenient options.

Do not worry about inflation

When inflation hits the market everyone but homeowners are happy. This is because with the increase in the price of everything around you it also results in the increase in the rent that could be levied on the property. And the property value also appreciates in this case. So you have a reliable hedging option against inflation.

The liquidity might be relatively lower than most other investment options but in the long run, every investor has to consider real estate investment for the many benefits it offers.

Need For A Financial Model

A financial model is basically a decision-making tool that helps in taking and making all and any type of decision. It might help a company in decisions regarding starting a new venture, a new project entry, investments in some big companies or even merger and acquisitions.

For any company to have a clear idea or overview about any of the above, it is important that they get a clear view about how the finances would be and how would they be able to manage their existing funds into both investments and their routine running of the company.

What would a financial model do?

Now that we know the reason behind why people or business insist on having a financial model, it is now important and essential to know what would this financial model do when it is implemented.

Yes, this helps a company in creating a mock scenario of an investment, the impacts and effects it has on its customers, the outcomes from its implementation and the success ratio it would have when implemented in real. Now this gives a complete understanding and overview of how it would be to have it in the market real-time.

Technology plays a very important and essential role here wherein companies use many different software and applications in creating and designing these models. But predominantly it is the simplistic excel sheets that help us come up with one of this kind.

A proper financial model recipe

A well built and a properly planned financial model would be like this consisting of all the essential details in detail.

  • A properly assumed model with the essential and realistic assumptions.
  • A proper flowing model with no mismatching steps or confusing assumptions.
  • No huge numbers. This would make the assumptions too unrealistic and something that might not be related to or applied in a real-life situation.
  • It should be clearly designed in a way understandable and agreeable to all those this is presented with so that the model is assumed complete because when this reaches the end-customer, who is the target ultimately, it needs to be transparent.
  • There should be clear instructions so that in case of any confusions, people are able to follow them without any assistance.
  • Everything should be in a printable format.
  • All the information, assumptions and facts should mandatorily come with a back up so that they are brushed back for any clarifications.

Microfinance benefits

The latest growth is in the financial service that aims at providing in a better life to the underprivileged people; is the Microfinance. There are a lot of people who live in a very small earning, just as low as $2, and sometimes even find this earning as impossible.

So, what are the benefits of microfinance, why is it getting more popular?

Gives the underprivileged an access to credit:

Since money is the biggest problem here to all, especially in the underprivileged group; microfinance helps those people to gain access to some smaller credit notes and improve their business or develop one or help themselves in times of drought.

Read the Ethereum Code review

The life of debt that most people live is extremely bad, that lets them die in poverty. No larger banks offer a homeless, a jobless person a loan to come up in life, to provide basic facilities in life. That’s where the microfinance comes in the picture, it gives them a lease of life by offering loan without any collateral. This, in turn, helps in reducing the poverty levels across the world.

Better rates than ordinary banks:

The rate of interest offered by traditional banks are way too high and is standardized no matter what! But, in microfinance, the concept is mainly focusing on helping people live a better life, to start living on their own. Hence the loan is sort of biased, but on good terms, the person who is found more capable of earning and repayment is given lower interest rates and also offered a newer loan once the first loan is repaid. This is helping more women to come out of their homes in developing their business, be it in baking or basket making.

Helps in educating the underprivileged:

Education is the biggest weapon that one can use in eradicating the illness of the world, like the poverty, malnourishment, lack of job, early marriage and pregnancy, abuse and harassment and many others. When a flock is educated they tend to pass on the knowledge, the learnings to their group and encourage them to live a better life.

So, this small finance help families in educating their children, give them a future, a ray of hope to build a better nation and also to earn a good stable income once their children settle down with jobs. This is more fruitful in girls especially, as they educate others and also a whole family in turn.






Commonly Used Stock Charts By Technical Analysts

Technical analysts use stock charts to analyze their trades. These charts are used to analyze what the trend of the stock is and which are the support and resistance levels where the stock should be bought or sold.

What is a stock chart?

A stock chart is a graphical representation of the price of the stock and how it has changed with time. The chart can be plotted in various ways and you need to use the one that you can read the best.

There is two axis in the stock chart, the horizontal axis, and the vertical axis. The horizontal axis represents the time period for the chart and the vertical axis represents what the trading volume is that corresponds to the time period.

Technical analysis uses many kinds of charts; however, the popular ones used are the line chart, bar chart, candlestick charts and the point and figure charts. The nature of how the price is inputted varies for different charts as well as how the data is represented is different in each chart.

Line chart

This is the simple way to plot stock chart. It shows how the price has changed over time. The chart uses the closing price of the stock and depicts it as a point. Once there are series of this points they are joined to form a straight line. The chart can be plotted for any time frame. It is easy to use but it does not show a lot of information that is needed to trade using technical analysis.

Bar chart

This is an advanced version as compared to the line chart. The bar chart marks the open, high low and close price of the stock. The bar chart is not continued like the line chart. The advantage of the bar chart is that it lets the trader see the pattern formation easily. Also, the data that is plotted on the bar chart is more than that on the line chart.Since the bar charts are not colored this is why it loses out to candlestick charts which use different colors for bearish and bullish candles.

Candlestick chart

Candlestick charts trace their origin to Japan where it was first used some 30 years before. This is the most popular chart that is used by traders. The candlestick chart also plots the open, high, low and close of the candle but shades the bearish and the bullish candle with different colors. This makes it easier to visualize what is happening.

Point and figure chart

These charts only show some significant price information like the X’s and the O’s without giving any consideration to time. The price is placed on the horizontal axis and the time unit is determined as per when the trend changes.

A Practical Example Of Earnings Multiplier

Earnings Multiplier is perhaps the most analyzed and handy tool to assess the value of a company or business under consideration for the sale, acquire or partnership. The owner also can take a look into how his company has grown in terms of cash flow through the years since it helps to compare the current market price of a stock with respect to earnings per share over the different time periods. It also demonstrates the position of the company in comparison to its counterparts or competitors.

Both the seller and the buyer can take fruits out of the basket by business valuation. While the buyer gets a chance to financially and logically examine the consequences of buying the business under consideration. The seller can utilize this detailed report to study the operation of his business, how it has transformed over the years and if he can change any negative plunges instead of handing it over completely to another owner.

A simple example to illustrate the tool

You have a company manufacturing textiles which you inherited from your father. The company had gone public when your father was the owner and was priced at $30 per share. The company then had earnings of $10 per share. The earnings multiplier is $30/$10 per year = 3 years, which implies that the company would have taken 3 years to get back the stock price of $30 and is running at 3 times earnings.

The current market price of each share of your company is $100 and the income is $20 per share. Then the current P/E ratio of your business is $100/$20, which is 8, that is, currently your business is running at 8 times the earnings. A comparison of P/E ratio for the two generations gives you the difference in the production efficiency of your business. Since business valuation analyzes almost all aspects of an operating business, it is convenient to know the faults and areas for improvement. This example shows that the current price is more expensive than the former calculation 3 years ago and will be less attractive to a new owner or the acquiring company.

In a second case, you can compare the asset worth of your business with other companies working in the same genre and with the same classification. Another textile manufacturing company has a current stock price of $100 and earnings per share of $10, giving a P/E ratio or multiplier of 10 years. This means that the second company is more expensive than your company and lesser chances of getting preferred by a buyer or partner.