Conservative investors were outraged by this move.
A Systematic Investment Plan (SIP), also known as SIP, is a facility offered by mutual funds to investors. This allows for disciplined investment.
This feature allows an investor to invest a set amount of money at pre-determined intervals in the mutual fund scheme of choice. These SIP intervals are determined by the investor and can be weekly/monthly/quarterly/semi-annually/annually.
An investor can invest in a timely manner by taking this route to investments. He or she can invest without worrying about market dynamics and benefit in the long run from average costing and the power of compounding. The first advantage of SIP investing is compounding. The benefits of investing regularly and disciplinedly through SIP for the long term are magnified due to the compounding effect. SIP's compounding effect ensures that investors earn returns not only on the principal amount (the actual investment), but also on gains made on the principal.
Let us look at an example to better understand this. Consider investing in a mutual fund scheme and earning some income. If you reinvest this income, you will be able to earn interest on both the original investment and the income you have earned.
When an investor invests in a mutual fund scheme through SIP, he or she purchases a certain number of fund units equal to the amount invested. When investors choose the SIP route to investing, they do not need to time the markets because they benefit from both bullish and bearish market trends.
When there is a downturn, investors can purchase more fund units with the same amount that was decided. When the markets rise, however, an investor purchases fewer units. Because mutual fund NAVs are updated on a daily basis, the cost of purchase varies from one SIP installment to the next.
Read more on https://blog.joinfingrad.com/the-power-of-sip-in-investing-how-an-sip-works/
In addition to the "pandemic," the interruption of the uptrend of the US dollar (USD) was another development of the fateful year 2020.As shown in Figure 1, the USD index lost the uptrend - rising highs and rising lows - that began in the 2008 crisis, when the Lehman Brothers investment bank failed in September 2008.This index was created in March 1973, with 100 points, following the termination of the Bretton Woods agreements in 1971.Until that year, the USD, the world's reserve currency (it still maintains this status today), was convertible into ounces of gold (35 USD corresponded to one ounce of gold).
Since then, the US currency has become a fiat currency, i.e., it is no longer convertible into commodities and is only legal tender.
By law, no merchant can refuse this currency in a commercial transaction.To measure the value of the USD, a basket of currencies with different weights is used.Currently, this basket is made up of six currencies, in which the euro (EUR) is the most relevant currency, with a weighting of over 50%:Euro (EUR; 57.6%)Japanese yen (JPY; 13.6%);British pound (GBP; 11.9%);Canadian dollar (CAD; 9.1%);Swedish krona (SEK; 4.2%);Swiss franc (CHF; 3.6%).Until 1971, currency was issued against gold, i.e., the US Central Bank, the Fed, for X tons of gold, issued Y USD.
That is, its balance could only increase if there were gold reserves in its coffers; a greater quantity of Gold corresponded to a greater quantity of dollars and vice versa.From 1971 onwards, the issuance of foreign exchange is done through the purchase of government bonds.
How does it work?In a simplified form (without considering the fractional reserve system of commercial banks and their role as intermediaries in the bond market), it consists of the following: the US Treasury issues Treasury bonds, let's imagine 1,000 bonds at 10 USD each, maturing in 1 year; the FED issues USD 10,000 and buys these securities from the US Treasury, keeping these assets in its balance sheet.If these bonds involve interest payments, we will assume a rate of 10%, which means that next year the US Treasury will have to pay the FED 1,000 USD as interest and 10,000 USD to repay the loan.Here comes a question:If no one has printed an additional 1,000 USD, it means that there is not enough USD to pay the central bank (FED), the security holder.
How do you solve this problem?Issue more debt, always more, like a pyramid scheme.To keep this monetary system working, the production of new debt must exceed debt repayments.In other words, governments have to permanently sell paper (bonds) to the central bank to keep the monetary system afloat.In conclusion, to print a lot of money, the government has to create an exceptional supply of bonds - financial assets - for the central bank to purchase by issuing money for that purpose; otherwise, it is not possible to increase the amount of money in circulation (simplified explanation, without taking into account the effect of fractional reserves of commercial banks).The current USD index considers the reality of 1973 when countries such as China, Mexico, South Korea, and Brazil did not weigh in world trade, a very different reality today.This year, the USD depreciated considerably against the main cryptocurrency, Bitcoin (BTC), and precious metals: gold and silver.
The share market is an amazing place to earn money but making money by the equity market is tough.
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Advisor will ask you many questions and after understanding your requirement and expectations will suggest you what is best for you to invest in.
The financial advisor will follow the priceless updates which can help you to get a better return on investment (ROI).
