How To Build Wealth
How To Build Wealth
How To Build Wealth
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How to
Build Wealth
Congratulations!
By registering with Value Research Online, you have given yourself the key
to build wealth. In the following pages you will learn how to build wealth
and use our website to monitor and track your investments and stay a step
ahead.
Our website has several features and tools, which will enable you to
understand about mutual funds and investing. To get started, you need to
setup your existing investments in the 'My Portfolio' feature, which is an
investment tracker that allows you to track your investments in stocks,
mutual funds and fixed income investments. This free to use tracker pro-
vides you with detailed analysis of each of your investment's performance
and its contribution to your returns.
You can view the character of the portfolio, which includes asset alloca-
tion and the top stocks and sectors holdings. If you are a Systematic
Investment Plan (SIP) investor, 'My Portfolio' has the facility to take into
account the SIP inflows to provide you up to date status of your invest-
ments. You can view the transaction history of your investments, the loss
or gains made besides performance comparison with appropriate bench-
marks.
There are other facets to the 'My Portfolio' too that make it India's most-
advanced investment portfolio tracker. You can explore further as you get
started. It is also our endeavour to make this facility safe, interactive and
valuable to every investor looking for a one-stop point to assess their
finances.
I look forward to hearing from you about Value Research Online, and
especially on how we can improve it.
Regards
Dhirendra Kumar
Chief Executive
Value Research
How to Build Wealth
Everyone wants to get rich with crores of rupees and build a wealth to last a lifetime, if
not longer. Although it is simple to build wealth, where most often one goes wrong is in
assuming that someone else will help them build it. It is very simple to build wealth by
following easy investment strategies to reach the magical figure of a crore and more.
There are several ways of becoming a crorepati; you can save money in the bank, you can
invest in fixed return instruments, you can invest in mutual funds or equity. All these
instruments come with degrees of risk and returns. What you need to know is that invest-
ing in equity is the way to wealth creation in the long run and building a crore with mutu-
al fund investments is very much desirable and possible.
Crorepati Funds
Fund Return (%)
Scheme Category Rating 3- year 5- year
HDFC Taxsaver Tax Planning 8.89 6.52
HDFC Equity Multi Cap 9.53 9.16
Franklin India Prima Plus Large & Mid Cap 9.36 7.45
HDFC Top 200 Large & Mid Cap 7.49 10.03
Franklin India Bluechip Large Cap 8.98 8.02
DSPBR Equity Multi Cap 8.06 8.81
Few funds with over 15-year history that have built `1 crore through monthly SIP investment of `1,000
The last ten years were not exactly a trouble-free period on the bourses. And, the past
two decades have witnessed a fair amount of crises in the stock market. But even in this
period filled with regular crashes and scams, slow and steady really does get you to your
crore. But make no mistake, the journey wouldn't have been as smooth as you would
have liked it to be. There would have been times when even after five or more years of
regular investing, your portfolio would have come under a serious threat of going into
red. After 2008, many investors would probably be facing a similar dilemma. At this junc-
ture, many would have simply exited the market to save their capital, but the more
patient ones would be the ones who would go on to become crorepatis.
Monitoring a Portfolio
Having set-up your portfolio, you need to get into the next most important actmoni-
toring your investments, because even a great portfolio must be monitored and must
evolve to suit changing conditions. One major reason is that formerly good funds could
start consistently underperforming. Of course you must not jump the gun and fire a fund
for short periods of underperformance.
But, if a fund is performing considerably
worse than others funds of the same
type for more than a year, you should
think of switching to a better performing
fund.
For a start, the Value Research rating is
handy to invest in good funds. The 5-
and 4-star rated funds form the universe
of the best performing funds in a catego-
ry which can be selected from the Fund
Select feature on our website. Funds with lower rating are best avoidable. This filter will
help you build a portfolio of good funds, which will aid wealth creation.
The other reason for changing a portfolio is when you approach the time when you need
the money. A portfolio that started out as a five-year, medium-term investment will be a
short-term portfolio four years later. The solution is clear: portfolios must be reworked as
the time to liquidate them gets closer, otherwise, your hard-earned equity returns could
get wiped out in a bear market just when you need the money. As the time approaches
closer, you must start moving the money into debt funds gradually, perhaps a year or two
in advance, which is crucial to protect your returns.
Peace of Mind
In a nutshell, building wealth is not rocket science. All it requires is a great deal of care-
fully thought-out systematic actions. Besides great returns with the right amount of risk,
the most important payoff from managing your investments in the 'My Portfolio' tool
methodically is peace of mind. You will know what you are doing and why you are doing
so and, you will sleep peacefully in the night without worrying about the fate of your
investments.
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Take Control
Manage your finances better with the Savings and Investment Yearbook 2012. With
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