briananthony's  Instablog

'Necessity is the mother of all inventions' the practical reality of this quote has led to some of the most important inventions and discoveries for the betterment of mankind. For instance, the desperate need to numb the excruciating pain of surgeries lead to discovery of Anesthesia, which we have now accepted and are accustomed to consuming before any major operation.

A similar analogy can be applied to the invention of Online trading. Today due to the advancement of technology there are more Internet users than ever before and the number is only increasing with time. One of the most vital hall mark traits of the Internet is its ability to make any process significantly paperless, clear in communication and most importantly achieving a reduction in cost & increased TAT time in completion of task.

With regards to Share trading in India, prior to the acceptance of Online share trading, clients used to depend on individual brokers who would take calls on their behalf at the 'rings' of stock exchanges. These brokers would act like middle-men and be the decision makers on behalf of the clients.

Clients were dependent on the broker for multiple issues due to the very dynamic and fast paced nature of physical share trading business. This at times led to friction between client and broker over misrepresentation of share trading information that was relayed, ultimately resulting in losses for the client concerned.

Thus, there arose a significant need for a platform that would make clients self-reliable and the sole decision makers. With the advent and acceptation of online share trading, it lead to a new rat race amongst brokers to be the best online stock broker in India.

Today's all the best brokerage houses for online share trading have a dedicated team to look into this segment, as it has over the years proved it has proved itself to be a good medium to indulge in online trades.

Due to this the number of participant clients into active share trading has increased many folds as they are now able to be virtually present and take calls regarding their shares in a self-sustained online medium. The best brokerage houses have gone a step ahead by offering freebies like zero account opening fees when clients apply for opening of a demat account with them.

Another important factor that contributed greatly is the presence of a massive online financial library in the form of blogs, forums and other study avenues where any newcomer can equip himself with the basic financial know-how and begin trading. Some of the best online stock brokers in India thus equip their trading sites with updates from the latest on the broking industry, so that user engagement while visiting them is maximized.

Thus more number of financially literate people were added because of the internet and this provided a brilliant uniform platform for discussing latest revisions concerned with all aspects of financial trading and investments.

When participating in online share trading in India, the client should ensure that he or she trades in a fool-proof and well secured medium, as a negative fall back of internet trading is that there have been instances of hackers cracking into client's information when he or she trades only to conduct proxy trades using the confidential information. Thus the best brokerage houses for online share trading in India assure that their trading portals are fool proof and customers can trade in a secured medium.

Instances like these can happen even in the case of empaneled brokers whose online trading services are used by clients while trading. Thus it is very essential that a client chooses an online broker of repute and one is registered at all levels with the regulatory bodies.

Online trading in India is just about two decades old, however, it's evolving at a very fast pace due to high engagement factor by clients and brokerage firms. Infact brokerage firms now are also providing mobile trade applications which allow clients to place trades online from their cell phones. Due to the high turnover of capital involved in share trading, online share trading in India is here to stay and its growth would correspond to the amount of engagement by the participating clients.

Disclaimer:

1. Views as are mentioned in the article are personal views of Author and nothing to link with Co., its Director and Employees.

2. All investments are subject to market risk and you need to consult your financial advisor/consultant before investment.

With the exponential growth of the mutual fund business in India, mutual funds are further customized to suit Indian investment needs. Thus mutual funds are further classified into 3 different funds namely Equity, Debt and Balanced funds.

An equity fund can be best described as an open or closed ended fund that invests primarily in stocks, allowing investors to buy into the fund and thus buying a basket of stocks more easily than purchasing each security individually.

Let's understand a bit more about equity funds in detail. Generally equity funds include aggressive growth funds which seek to maximize capital appreciation in the long term. One of the major advantages of investing in equity funds is that it allows for risk diversification along with more potential reward by offering a broader exposure to various stocks and sectors. Investing in equity stocks is risky business and for a layman it is very much possible to lose a good portion of his money if he is not aware of the dynamics of the market and how one should position himself during times of bullish and bearish market returns.

However, when one invests in an equity fund, his equity risk is diversified. This is because numerous investors like him invest in the same fund. When the investment call is taken by the appointed fund manager he uses his market knowledge to select and invests only in cherry picked equity stocks. In my belief it's always prudent to follow the rule of 'Not investing all of one's eggs in one basket', hence like minded investment advisors always suggest investments in both equity and debt funds. Debt funds largely comprise of fixed income products. The principal objective of a debt fund is preservation of capital followed by generation of income on the capital invested by the investor. Debt funds have two important advantages, one that they offer diversification against investing in an all equity oriented portfolio's, and second for the ultra-conservative investor who is more inclined to invest his savings in a fixed deposit it offers comparatively a higher return in capital invested. Also Investing in these funds offers better liquidity options as well as greater return on investments when compared against common bank deposits which come along with a lock in period.

Now for an investor who is of the opinion that he gets the best of both worlds, then he may choose the third option of mutual funds i.e. balanced funds. These are built out of a combination of both world's viz. equity world as well as debt world. Both are generally combined in ratio of 60:40, where 60% is allotted to equity portfolio (shares) and remaining is debt (fixed return investments like bonds).

Balanced funds continuously rebalance their portfolios in such a manner that the general placement described above is not disturbed. Thus the profits earned from stock markets are encashed and invested in low risk investment instruments like fixed income or debt products. Thus in-conclusion, the average investor today is spoilt for choice and has multiple investment options at his fingertips. As far as mutual funds are concerned investors can look at his risk appetite and choose to invest in a mutual fund that best suits his needs.

Disclaimer:

1. Views as are mentioned in the article are personal views of Author and nothing to link with Co., its Director and Employees.

2. All investments are subject to market risk and you need to consult your financial advisor/consultant before investment.

Globally currency trading involves a huge turnover of money. The global forex market is presently estimated at US$ 3 trillion as per the BIS Triennial Survey Report. Recent reports also conclude that currently the Indian Forex market's turnover is more than $400 billion and analysts believe that we are still in the nascent stage of achieving the full extent of our inherent trading potential.

The sporadic growth in the Indian Forex market can be attributed to many factors, the first causative factor being in the year 1978 when the RBI first gave banks approval to undertake intra-day trading in foreign currency exchange. This step resulted in the required 'square' or 'near square' position to be complied with only at the close of business every day. In the early 1990s, currency trading was subjected to a lot of restrictions by the RBI. However, the introduction of major economic reforms by the government, like the implementation of open market policies, provided the much needed positive boost to currency trading in India.

As the next critical step, the government saw the appointment of an expert committee to review the balance position. This committee looked into introducing Liberalized Exchange Rate Management System or LERMS which was introduced in 1992. This committee was made to study the Forex market in detail so that steps could be taken to widen, deepen and develop the Forex market in India.

As a result of this exercise, currency trading in banks got a significant boost and banks got the freedom to carry out currency or forex trading operations amongst themselves. The freedom given here is mainly concerned with granting banks the independence of fixing their trading limits, and being allowed to borrow and invest in overseas markets up to specified limits.

Another major advancement that took place in the Indian Forex markets was in the year 2008, when currency derivatives were added to the platform of the Nation's largest trading stock exchange - NSE (National Stock Exchange). Addition of the currency derivatives segment propelled Indian Forex Trading at par with Global trading exchanges across the world. This not only led to significant increase in the volume of trading being carried out through our exchanges but also opened the doors to corporate as well as retail investors, who were earlier not allowed to trade extensively on the exchange.

The latest addition to the arm of Currency trading on Indian shores are Currency Futures and following their implementation into the forex trading system since a year and half, we have witnessed a series of positive changes marking their growth in the foreign exchange. Currency futures means a standardized foreign exchange derivative contract traded on a recognized foreign exchange to buy or sell one currency against another on a specified future date.

I would like to inform my readers that though the introduction of currency futures was mainly from the US-INR contracts perspective, looking at the positive trading response it received from investors, other contracts like Yen-INR and Pound-INR have been introduced as recently as January 2010.I would like to conclude by saying that currency trading in India is here to stay and the golden age of the currency exchange on Indian shores could be just around the corner.