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Smartly investing in InvITs

Posted on January 5, 2023January 5, 2023 by site_admin

In EMS stock market classes we look at many ways to diversify your Portfolio. INVIT is one such option. InvITs list on the stock exchanges to raise capital for the purchase of a portfolio of operational infrastructure assets that are already producing consistent cash flows. It is like a hybrid product―with equity and fixed-income characteristics

Infrastructure investment trusts, or InvITs, have been around for a while but many investors are still unaware of this option for investing that may very well replace some, if not all, of their debt investments with a little different flavour and a higher risk-reward ratio.

Should individual investors think about investing in InvITs? Before choosing to invest in this new asset class, let’s go through the basics.

InvITs look like mutual funds

InvITs, which function similarly to mutual funds (MFs), provide investors with units in exchange for their investments and allow for the pooling of capital from multiple investors, with specific management in charge of the assets.

The key distinction between an InvIT and an MF is that in the former, the funds are invested in infrastructure projects, while in the latter, the funds are in invested in diverse equity and debt instruments.

What types of infrastructure projects do InvITs invest in?

InvITs usually invest in roads and operating highways, besides power generation, distribution, and transmission units. InvITs may own and manage some of these assets. To put it simply, any infrastructure project ― as the name of the investment suggests ― is an option for an InvIT.

Why InvITs are less risky than direct infra stocks/MF schemes?

InvITs are matured, stable assets; the stage of conceptualisation and implementation of the infrastructure project would already be over before the InvIT scheme comes into action. InvITs aim to optimise the matured operations, and hence, render them safer than investment in direct infra stocks/MF schemes.

Let’s take an example. Let’s assume that a road has already been built, meaning that the said road project’s conceptualisation and execution phases are over. With the implementation risk eliminated, a significant safety net comes into play. Then we look at the number of vehicles currently using the road. With this data in hand, you can calculate the toll collection. These mature assets are listed on the company’s balance sheet.

You may also relate it to Real Estate Investment Trusts (REITs), where business operations start after a structure, for instance, a building project, is built. Learn about such new investment Ideas in ours classes. Located in Deccan Pune. EMS classes are one of the best rated classes on google, because we encourage students to build a wholesome portfolio.

Hard Facts and Truths About Investing

Posted on August 23, 2022August 23, 2022 by site_admin

1. A great Company may not give great returns. The gulf between a great company and a great investment can be extraordinary.

2. Markets go through at least one big pullback every year, and one massive pullback every decade. Get used to it. It’s just what they do.

3. There are tens of thousands of professional money managers. Statistically, a handful of them has been successful by pure chance.

4. During Recessions, Elections, and Reserve bank Policy Meetings, people become unshakably certain about things they know nothing about.

5. The more comfortable an investment feels, the more likely you are to be slaughtered.

6. Not a single person in the world knows what the market will do in the short run. End of the story.

7. The analyst who talks about his mistakes is the guy you want to listen to. Avoid the guy who doesn’t — he is much bigger.

8. There will be 7 to 10 recessions over the next 50 years. Don’t act surprised when they come.

9. Warren Buffett’s best returns were achieved when markets were much less competitive. It’s doubtful anyone will ever match his 50-year record.

10. Most of what is taught about investing in university is theoretical nonsense. There are very few rich professors.

11. The majority of market news is not only useless but also harmful to your financial health.

12. Professional investors have better information and faster computers than you do. You will never beat them in short-term trading. Don’t even try.

13. The decline of trading costs is one of the worst things to happen to investors, as it made frequent trading possible. High transaction costs used to cause people to think hard before they acted.

14. The phrase “double-dip recession” was mentioned 10.8 million times in 2010 and 2011, according to Google. It never came. There were virtually no mentions of “financial collapse” in 2006 and 2007. It did come.

15. The best investors in the world have more of an edge in psychology than in finance.

16. What markets do day to day is overwhelmingly driven by random chance. Ascribing explanations to short-term moves is like trying to explain lottery numbers.

17. If you have credit card debt and are thinking about investing in anything, stop. You will never beat 30% annual interest. Do not trade borrowing money on Credit cards. 18. The most boring companies — toothpaste, food, bolts — can make some of the best long-term investments. The most innovative, some of the worst. Visit our website for more information-http://sharemarketclasses.in

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