Financial Assets

                              Asset

Asset is every investment which helps us to generate income. As an example we can say investment in bonds, equity, debentures, treasury bills, mutual funds etc all are considered as asset. The wealth of an investor are it's asset.

  

                      Asset Allocation 

In investment planning whenever we make a portfolio the asset allocation is the main task for any fund manager. Portfolio is divided into different asset classes. Generally, there are four asset class.

1. Equity.

2. Debt.

3. Cash.

4. Precious Metal.

The risk and return features of each asset class are distinctive. To decide which asset class will constitute of how much percentage in the portfolio depends upon the various factors like risk taking power of a client, time horizon, goals of a client and various other factors. Return and risk attributes decides the asset allocation. Different asset classes have different expected rate of return. 

Mutual Funds

                  Mutual Funds

Mutual fund is a way through which we can invest in equity market, debentures, bonds.

Mutual funds offer a range of products to investors. These products are used to fulfill various investment objectives

1. Risk and return expectations.

2. Investment horizon.

3. Investment Strategy.
Mutuals funds are managed by the fund managers. Fund managers are those person who are highly skilled, educated and knows how to manage the money of a common people. Generally, we use the term that mutual funds gives a higher amount of return in long term. Long term means the time horizon of more than 5 years but now-a-days there are mutual funds specially for short term purposes. Investment for less than 1 year of period are also available in mutual funds.

              Types of mutual fund

There are basically 7 types of mutual fund

1. Money market funds.

2. Fixed Maturity Fund.

3. Index Fund.

4. Fixed Funds.

5. Speciality Funds.

6. Equity Funds.

7. Funds of funds.

    

       How to invest in mutual funds?

Generally, there are two ways prefer by the common investor. SIP and Lumpsum investment. Generally common people do SIP
because it deals with the psychology of an investor and it helps the investor to invest for long term. Now- a- days large institutions, private banks, public sector banks also invest in mutual fund but they use lumpsum form of investment and generally they invest for short term to get higher returns from people's money. I personally suggest that never invest directly in the equity market if you don't have the knowledge of it. It's better to invest in the stock market through mutual funds. You can choose mutual funds which invest more than eighty percent of their money in equity market if you want large exposure of your money in equity market.

 # Mutual Fund Sahi Hai.

Reverse Mortgage

                  Reverse Mortgage

A reverse mortgage is the opposite of a conventional home loan. It is an ideal option

for senior citizens who require regular income. For senior citizens who don't have financial support from their children or their children live in abroad and they don't want to live there. This policy is only for senior citizens. Generally in India people don't take reverse mortgage because they are emotionally attached with their property instead of using their property for regular income they choose a low standard life. As an example we can see the  senior citizens of rural sector how they live their life because they don't have money but they have property and they don't use it.

    How does reverse mortgage work?

Firstly, bank estimate the price of the property depending upon the various factors. The periodic payments also known as reverse EMI 

are received by the borrower over fixed loan tenure. The borrower continues to reside in the property till the end of his life and receives a periodic payment on it.

    

        Guidelines for reverse mortgage

Maximum loan amount would be up to 60% of the value of the residential property.

Life of the property should be minimum 20 years

Property should be the permanent primary residence of the individual.