Steps to Start Investing – There is always a first time!!

Every time we hear someone discussing about good return from an investment, don’t we regret that why this opportunity didn’t come to us. Yes we do, and why we feel this is because of the simple reason that we don’t invest. Every moment we think of making an investment, but do we actually invest? We probable give importance to savings over Investment isn’t?

Well!! There is always a first time, so start Investing. This article would take you through some steps/points which would help you to start investing money……

Debentures and Types of Debentures

Debentures are promissory notes issued by the joint stock company in the private sector. They are the debt obligations of the issuing corporation. Like government securities, they have an issue price at which they are originally issued. A coupon interest rate and a specified maturity date.

Types of Debentures: Following are the types of debentures

Gross Profit Margin - Definition

Gross Profit Margin: Gross profit margin is a financial term used to get the percentage of revenue left over to cover overheads, finance cost, taxes and future savings.

Formula: Revenue – Cost of goods sold

                                  Revenue

Implication: Many companies show huge revenues but still incur loses. This is with the obvious reason that the left over revenue after deducting cost of goods sold is not enough to pay off their operating and other expanses. This metric is again useful within the same industry. Cross industry company comparison may not be meaningful.

Example: Company A and Company B(of the same industry) both have $10 million in sales. Company A's cost of goods sold (COGS) is $8 million and Company B's COGS is $11 million. Company A's gross profit margin will be 20% and Company B incur losses worth $1 million. Company A spends less money to make the same amount of sales, and is therefore more efficient

Gross Profit - Definition

Gross Profit: Gross Profit is basically the revenue earned during a period of time say one year minus the cost of goods sold. Cost of goods involves the cost incurred for bringing the goods at saleable condition. Gross profit can also be referred as Gross margin or Gross Income.

Implication: Gross profit helps you to analyse the amount spent by the company to earn revenue. In other words it also helps you to  Gross profit should always be compared for companies within the same industry. Cross industry company comparison would not give much insights.

Example: Company A and Company B(of the same industry) both have $10 million in sales. Company A's cost of goods sold (COGS) is $8 million and Company B's COGS is $9 million. Company A's gross profit will be $2 million and Company B's gross profit will be $1 million. Company A spends less money to make the same amount of sales, and is therefore more efficient.

Types of Mutual Funds

This article would take you through types of mutual funds available in the market based on various categories(in this article three are illustrated)

By structure: Based on structure there are three types of mutual funds

• Closed ended fund:  These types of funds accepts investments only at the time of initial public issue and is closed for a certain period of time, say 3 or 4 years. The same can be traded at stock exchange by buying or selling it at the current Net Asset Value (NAV) prevailing at the time. It’s always better to avoid closed ended funds as investment can be done only at the time offer, when actually the fund has no performance history/record.

Mutual Fund - Definition

A goal oriented fund, wherein, many investors having mutual expectations invest money into the fund. This fund is professionally managed by a group (Asset Management Company) of managers having good experience in the same field. Same managers based on their experience invest funds on behalf of investors into various securities, bonds depending upon the goal of the mutual fund “The Game Changer”.

If we enquire about mutual fund, hundred of its kind would be available in the market (types of mutual fund are covered in the next article). But the question here arises is why should we invest in mutual funds?