[saket77]

Originally Posted by DigitalOne

"Pro-active" distributor is the key word here. Please don't expect any support from faceless, large institutions like ICICIDirect or HDFC Securities in these critical situations. Their customer service functions are being rapidly replaced by AI chatbots/voices.

Yes true. Always better to opt for a trusted and experienced local distributor whom you can 'see and meet', if you need one.

[NetfreakBombay]

Originally Posted by saket77

trusted and experienced local distributor whom you can 'see and meet', if you need one.

Another option is to use fee-only advisors. They would charge a fee and manage things for you. Since they make money upfront via fees, direct plans work.

Problem is.. paying 10k/50k/1lakh as fees is tough. Indirect payments such as commissions make this fees palatable.

[saket77]

Originally Posted by NetfreakBombay

Another option is to use fee-only advisors. They would charge a fee and manage things for you. Since they make money upfront via fees, direct plans work.

Problem is.. paying 10k/50k/1lakh as fees is tough. Indirect payments such as commissions make this fees palatable.

Yes, what you say is right and may be fee based advisory is the future of investment advisory industry once the fee structure is rationalized across products.

But in current times, compared to MF commissions, most fee-only advisors would charge higher. Current MF commissions are mostly in range of 0.6%-0.85% for good equity schemes. These may be slightly higher for non-performing/ lesser known schemes or probably NFOs.

Also, fee-only agents mostly charge upfront, which means that they have no interest if a scheme is not performing. Service aspect is out of the syllabus here. Trail commission structure encourages the intermediary to be competitive to retain the funds of investor with themselves by providing good advice and service throughout the tenure.

[NetfreakBombay]

Originally Posted by saket77

MF commissions are mostly in range of 0.6%-0.85% for good equity schemes. .... Service aspect is out of the syllabus here.

For a 1 Cr portfolio, this is still substantial (50k to 85k per year). With fee only advisors, they are paid once a year so incentive for them is to make the relationship "sticky".

In my experience, 50k to 1 lakh is the ball park one way or the other. Either once pays through commissions or upfront for portfolio management and tax planning etc (such as gains , amount of advance tax etc).

[NG_EV]

Hi!

I am completely new to the stock market direct investment. I use different Mutual Fund apps for purchase of Mutual Funds. Now I wish to buy individual company stocks occasionally. I have opened a ICICI direct account. I do not plan on going for Intraday trading. On the ICICI Direct website, there are different brokerage plans. Kindly guide me which plan to use. (My aim is to buy and hold few shares of some large companies for long term).

[NG_EV]

Originally Posted by NG_EV

Hi!

I have opened a ICICI direct account. I do not plan on going for Intraday trading. On the ICICI Direct website, there are different brokerage plans. Kindly guide me which plan to use. (My aim is to buy and hold few shares of some large companies for long term).

In addition there is something called protection % mentioned on the equity buy page. I am attaching the screenshot. I am unable to find what is this. Kindly help me with this too.

[cncmachinist]

Originally Posted by saket77

Yes, what you say is right and may be fee based advisory is the future of investment advisory industry once the fee structure is rationalized across products.

But in current times, compared to MF commissions, most fee-only advisors would charge higher. Current MF commissions are mostly in range of 0.6%-0.85% for good equity schemes. These may be slightly higher for non-performing/ lesser known schemes or probably NFOs.

Also, fee-only agents mostly charge upfront, which means that they have no interest if a scheme is not performing. Service aspect is out of the syllabus here. Trail commission structure encourages the intermediary to be competitive to retain the funds of investor with themselves by providing good advice and service throughout the tenure.

I am using a fee only adviser and my fees are just under 20K for the first year and even lesser for subsequent year. What he does in the first year is take complete stock of your financial assets / liabilities and your long term goals. Based on these assesses your current investments. Teaches you to manage your financials. I used his services only for the first year. I did all the investments based on his advise and he gave me a long term list of tasks split into monthly and yearly tasks which I am trying to follow.

I use zerodha for direct MF investments.

[mukeshgoel]

Time to sell automobiles and ancillaries shares (to buy later at lower levels)?

I have Tata Motors to be specific.

https://www.team-bhp.com/forum/india...ml#post5800270 (Unsold inventory for carmakers at 60,000 Crore (62-67 days inventory))

[whitewing]

Originally Posted by mukeshgoel

Time to sell automobiles and ancillaries shares (to buy later at lower levels)?

My view has been that the current markets have no link to underlying business or financials. One has to decide to either has to ride up the rollercoaster while taking the risk of a major fall OR cash out and potentially miss out on a larger profit by cashing out too early.

[Ananthang]

While researching a stock which is fundamentally good and technically also slightly favourable to buy I see there are many Sellers (4L) and around 1L buyers. What does this mean? Should I be worried

[bijims]

Originally Posted by Ananthang

While researching a stock which is fundamentally good and technically also slightly favourable to buy I see there are many Sellers (4L) and around 1L buyers. What does this mean? Should I be worried

It means that more people are looking to make an exit from the stock than purchasing at this price at this point, it is generally a signal of downward pressure on the stock price, and this may also indicate a bleak future outlook.

It’s not necessarily a reason to be worried, but it’s a signal to proceed with caution. You might want to monitor the stock closely and look for any news or events that could be influencing the market sentiment.

[thirugata]

Originally Posted by Ananthang

While researching a stock which is fundamentally good and technically also slightly favourable to buy I see there are many Sellers (4L) and around 1L buyers. What does this mean? Should I be worried

There is absolutely no reason to worry here.
This data is showing what the current situation is which can change through the day. Also people who want to buy or sell big quantities won't disclose everything. It can be set to disclose small quantity at a given time.
What you need to focus on is what is the historic volume on this say in past couple of months. If this is good, that means in case if stock does not go in the direction you want you wills still have buyers if you want to sell.

[PearlJam]

Originally Posted by Ananthang

I see there are many Sellers (4L) and around 1L buyers. What does this mean?

It means nothing. Buyers/posers can simply feed a huge quantity buy order at a very low buy rate, which would never get executed on a normal day. A similar converse order can be placed on the seller side.

So you can't read much into these numbers, usually.

[DigitalOne]

One of the major factors for today's global stock market carnage is Japan raising its interest rates last week, and consequent negative effects on what is called as the 'Yen Carry Trade". The other factor is the weak US economic data and fears of a US recession.

Japan, for a long time now, has had zero (or sometimes even negative) interest rates. This zero-interest rate led to the highly prevalent 'carry trade'.

Simply put, "carry trade" means traders could borrow at zero rates in JPY, convert that to local currency (say, USD), invest in US assets (US treasury bonds, for example) for higher returns, convert back to JPY and return the amount back to the Japanese bank.

If the exchange rates remain stable for the duration of the loan, the return a trader would get is the return from the local assets investment (net of currency conversion and hedging costs). If JPY weakens against the USD, the Yen carry trade becomes highly profitable. If JPY goes the other way - that is it strengthens against the USD - it will be a loss for the trader.

With that in perspective, let's see how JPY has fared against USD in last 5 years:



As per the chart, 1 USD was 106 JPY in Aug 2019. For simplicity's sake, let's consider 1 USD = 100 JPY in Aug 2019.
A hypothetical trader could have borrowed 100 JPY at 0% interest rates from a JP bank, convert it to 1 USD, invest it for 5 years in US treasury bonds at 3% interest and got back 1.15 USD in Aug 2024.

At today's rate, of 1 USD = 142 JPY, 1.15 USD would be 163 JPY. The trader returns back the 100 JPY borrowed at 0% interest and makes a cool profit of ~63 JPY. (Approximations done for the sake of simplicity).

So, what changed recently?

Look at the above graph carefully and then look at the 1-year chart below:



The JPY had weakened considerably against the USD in the last 1 year. JPY reached its multi-year lows of 161 JPY against USD around 10-July. (The same above trader would have got a cool 185 JPY for his 1.15 USD on 10-July). Imports became expensive and inflation has surged to around 2.50%. This is for an economy which has not seen inflation for a couple of generations now.

To tackle the inflation, the Japanese central bank increased the interest rates from 0 to 0.25 on 31-July. Typically, higher interest rates mean money will flow into the country, and the currency will strengthen. The rate hike move was not totally unexpected. Look at the 1-month and the 5-day chart (since the rate hike decision was announced).





From a low of 160 JPY on 10-July, JPY has now strengthened against the USD to 142.

And so, the yen carry trade went for a tailspin. Along with weak US data, and West Asia tensions, the markets crashed globally. Japanese index Nikkei 14.15%, Taiwan 9.11%, South Korean KOSPI 9.6% were the worst hit.

[vimalvittaladas]

It was a combination of multiple factors
1. The major reason being the unwinding of Yen carry trade(borrowed at cheap rate in Japan and invest in forein assets for getting better returns in US, UK, EUR and EMs). When Bank of Japan raised rates to 0.25% and stayed hawkish in their statements, the year long approach of CB took a U turn. They somehow accepted that the deflation pressure now being subdued and Japan is back on inflationary path. This hinted that more rate hikes, if needed, are on table. To add salt to the wound, The FED on the other side is now being pressurized by the market to cut( even aggressively at 50 bps in September meet). A few are accusing Mr Powel(FED Chief) to hold rates for too long. These caused panic mode in market and we say YEN being appreciated against GBP, EUR and USD. Coincidentally the equity markets and bond prices rallied underlying the assumption of unwinding of carry trade.

2. The recent data in the US thrown lights on cooling labour market with unemployment rate hitting 4.3 and ISM reading showing a downtrend. The 2 year bond yield also came down 10 year bond yields (reverse of inverted curve)which theoretically means a step towards recession. Even though a recession will be there only if GDP data contracts in coming months, market is factoring a slow down and re arranging the positions by big funds (since they are taking money off the table and sit on cash during recession time).

3. The growing tensions across ME is another factor which is adding fuel to fire. The conflict between Israel and Iran may reach another level where the risk off may run across the markets.

Combined influence of above have resulted in sharp fall of equities across the globe, Treasury yields dropping sharply, gold rallying, safer heaven demand like CHF currency. Thet trend is expected to continue with volatility index rocketed and I feel the month of Aug and Sep may give high volatility times ahead.