ET Markets’ Post

Whether Stock markets go up Whether Stock markets go down Whether it’s Bull market or Whether it’s Bear market Asset allocation means that your portfolio is diversified across sectors and themes. There is not too much dependence on one asset class. CA Rohit Arora Jitesh Verma visit us for more information: https://lnkd.in/dChHFWmU #investmenteducation #mutualfunds #financialliteracy #mutualfundssahihai #education #investoreducation #finance #sip #asset

In this era of rapid inflation, saving your money is no longer enough, you need smart investments for long term safe and secure future. I am so happy to share this amazing foundational stock market course that I was a part of, and finally completed it. I learned about fundamental analysis of a company. reading and interpretation of a balance sheet of a company. technical analysis. derivatives selecting or rejecting an ipo. I believe, having foundational knowledge of investment planning is necessary, to handle personal finance. #pwskills #financewallah

this valuation Report is made up on the purpose of study only. In my report I did my valuation with the help of some key drivers like : • RISK FREE RATE • EQUITY RISK PREMIUM • DIVIDEND YIELD • BUYBACK YIELD • EXPECTED GROWTH etc. this valuation report is only for study purpose not for any investment purpose. guided by Parth Verma sir #valuation, #S&P500 , #INDEX

Equity Risk Premium ! Equity risk premium refers to an excess return that investing in the stock market provides over a risk-free rate. This excess return compensates investors for taking on the relatively higher risk of equity investing. The size of the premium varies and depends on the level of risk in a particular portfolio The formula for calculating the equity risk premium is equal to the difference between the expected market return and risk-free rate • Equity risk premium predicts how much a stock might outperform risk-free investments over the long term. • Calculating the risk premium can be done by taking the estimated expected returns on stocks and subtracting them from the estimated expected return on risk-free bonds. #finance #linkedin #valuation The Valuation School

Demystifying Mean Reversion in Finance Ever felt like a stock that skyrocketed is bound to come crashing down, or that a beaten-down asset is due for a comeback? That's the essence of mean reversion, a powerful concept in finance that suggests prices tend to gravitate back towards their long-term average. Think of it like a seesaw - extremes on either side don't last forever, and a return to equilibrium is inevitable. Imagine this: Company A's stock soars 50% in a month on hype. Mean reversion suggests this surge is unlikely to be sustained, and a correction back towards the average price is more probable. Commodity B's price plummets due to a sudden event. Mean reversion implies that it won't stay depressed forever, and a gradual rise towards the historical average is expected. How do finance professionals use this concept? Traders: They identify overvalued or undervalued assets based on mean reversion signals (like moving averages) and capitalize on price corrections by going short on overvalued assets and buying undervalued ones. Risk managers: They use mean reversion to assess potential losses in portfolios and design hedging strategies to mitigate risks. Investors: They employ mean reversion for value investing, seeking beaten-down assets with the potential to revert to their intrinsic value. Remember, mean reversion is not a crystal ball! It's a statistical tendency, and external factors can influence market behaviour. However, understanding this concept can give you valuable insights into market dynamics and inform your investment decisions. #finance #investing #trading #riskmanagement #valueinvesting #marketdynamics #financialmarkets

Intrinsic value refers to the actual value of an asset, stock, option, or any investment, as opposed to its market price or perceived value. It is based on fundamental factors such as earnings, dividends, assets, and other quantitative measures, rather than on market sentiment, trends, or speculative factors. For example, in stock valuation, intrinsic value might be calculated using metrics like discounted cash flow (DCF) analysis, where future cash flows are estimated and discounted back to the present value. This approach tries to determine what an asset is really worth based on its underlying characteristics and expected future performance. In finance and investing, understanding intrinsic value is crucial because it helps investors make informed decisions about whether an asset is overvalued, undervalued, or fairly priced relative to its fundamentals. #IntrinsicValue #SmartInvesting #investing #Finance #MarketAnalysis #linkedin #InvestingBanking #Valuation #money #TheValuationSchool #DCF

📍📈 Discover the "Coffee Can Investing" model - a low-risk, high-return, and highly effective way to earn stupendous wealth in the stock market 💰💵. Special thanks to all mentors who's content motivates me to keep learning Parth Verma . CA Rachana Ranade . Piyush Kumar . Pratik S #Finance #Investing #Wealth #Stockmarket

What are MLDs? 🤔 Market Linked Debentures (MLDs) are a hybrid financial instrument that shares characteristics with traditional debentures but offer the potential for higher returns linked to the performance of the stock market.   In other words, MLDs are debt securities issued by financial institutions that offer investors the chance to earn returns based on the performance of underlying assets such as Nifty 50.     MLDs combine these two key ingredients:   👉🏻 Ingredient 1: Safety   MLDs allocate a portion of your money into safe instruments like bonds or fixed deposits, ensuring safety of principle.   👉🏻 Ingredient 2: Growth Potential   Another portion is invested in stocks or market-linked assets, offering the potential for higher returns and growth.     There are 2 types of MLDs:   👉🏻 Principal Protected MLDs - As the name suggests, principal-protected MLDs offer full principal protection. They are perfect for risk-averse investors. No matter how turbulent the market gets, you're guaranteed to receive your initial investment back at maturity.   👉🏻 Non-Principal Protected MLDs - These skip the safety net but promise higher expected returns, ideal for those who are aggressive and seek higher returns.     MLDs generally have a floor and a cap. The 'Floor' guarantees a minimum return, while the 'Cap' limits potential gains   For example, if an MLD has a 7% floor and 15% cap, your returns won't dip below 7% or exceed 15%, regardless of market fluctuations.   Follow Gulaq | Sandeep (सन्दीप) Tyagi (त्यागी) | Vivek Sharma   #smallcase #Gulaq #finance #stocks #debt #equity #investing #investment #economy #business

In a notable shift from conventional projections, AQR Capital Management, with assets totaling $99 billion, has revised its medium-term expectations for bond and equity returns based on the 2023 market dynamics. 📈 Bond Returns Boosted: AQR has raised its expected returns for benchmark debt (US, UK, Germany, and Japan) in the next 5-10 years by up to 0.7%, citing higher yields and falling inflation as key drivers for the adjustment. 📉 Equity Forecasts Trimmed: On the equity front, the firm, co-founded by Cliff Asness, has scaled back its performance outlook for most equities. Rising valuations and diminishing excess returns against cash are cited as contributing factors. 💹 Portfolio Implications: The recalibrations result in an expected real return of 1.7% for 10-year Treasuries and 3.8% for US equities over the medium term. Despite these adjustments, AQR notes that a 60/40 portfolio's estimated performance remains at 2.9%, near its decade high but below the historical average since 1990. 📈📉 Market Dynamics Recap: The past year, initially dubbed the "year of the bond," witnessed fixed-income challenges amid stubborn inflation and interest-rate hikes, while stocks surged on AI optimism. With inflation easing and central banks signaling a pause in tightening, bonds now offer attractive yields, while stocks appear relatively high-priced. 💼 Diversification Focus: Reflecting the evolving landscape, AQR highlights private credit as the "boom asset class" of 2023. With an estimated return of 3.6%, the firm emphasizes the importance of methodology in predicting private credit performance, acknowledging variations based on leverage and credit quality assessments. As always, AQR underscores the uncertainty inherent in its assumptions. This year's paper emphasizes exceptionally high uncertainty in cash assumptions. Nevertheless, the firm anticipates significantly higher returns on cash in major developed economies, impacting risk premia for other asset classes. #MarketInsights #InvestmentStrategies #Hedgefunds #AQR #FinanceNews

📈Beta is a factor used to assess the risk and return of a stock, which makes it a ubiquitous metric to consider. It is used in various models like CAPM, Fama French Model, and others, these models help us assess the risk associated with different investments, and make more informed decisions in the realm of portfolio management and asset allocation. 📈But here's the catch – there's more than one type of beta, and each holds a unique key to unlocking insights into investment risk. In this post, let's explore why delving into both Levered and Unlevered beta is essential for savvy investors. Let me know your thoughts and opinions in the comment section👇📩 Parth Verma #beta #finance #cfa #frm #financialanalysis