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Where to invest in the SHORT-TERM? [1-3 years period] - YouTube
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hi everyone welcome to today's video so
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if you go and check the portfolio of
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biggest investors on the planet like mr
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warren buffett mr ray dalio mr rakesh
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indian walla you will notice that these
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people generally tend to invest from a
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long term basis so they will buy a good
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stock very early on they will stay put
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and they will reap benefits with the
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growth of the company now this is the
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same strategy that i advocate on this
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channel as well that identify good
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stocks stay invested and continue
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holding it and reap benefits this is the
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simplest way of building wealth but many
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a times what happens is that retail
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investors like us would want to invest
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on a short term basis why because
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sometimes we do goal based investing
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that we need to study abroad or we need
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to complete our mba or marriage expenses
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or car or home loan expenses all that
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stuff so from that particular
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perspective we must also understand the
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aspects around short-term investing so i
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thought that i will shoot a video where
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i will discuss three specific options
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with you on short-term investing these
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three options have very different risk
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profiles all three options are good and
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will allow you to make money in the
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short term now the three options are
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corporate bond options by wind wealth
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now wind wealth is also the sponsor of
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this video and i am an investor in that
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company just because that is the case
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does not mean that i will not share the
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pros and cons i will genuinely share
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what the pros and cons of investing via
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wind wealth is second i am going to
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discuss about investing via debt funds
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so that is option two third i am going
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to discuss about swing trading
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especially from a short-term perspective
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so these three options i am going to
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discuss it will be a very useful video
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for you especially if you are looking to
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invest money for a horizon of one to
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four years so that is the time frame we
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will keep in mind so let us get the
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discussion started and first and
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foremost let us understand about the
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wind wealth investing option so what
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exactly is wind wealth so wind wealth
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basically is a platform through which
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retail investors can invest in corporate
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bonds so this brings us to the
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discussion that what corporate bonds
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exactly are and why should retail
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investors consider it now let us pick
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the example of our favorite itc now itc
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is a business it requires money in order
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to build new factories launch new
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products hire people all that bunch of
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different different things so it
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requires what capital or money now there
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are two ways in which itc can raise
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money one is called as equity financing
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and the other is called as debt
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financing equity financing simply means
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that they take a part of their company
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sell 10 percent of its stock or shares
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where in the stock market and then
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people like you and me buy itc stock
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then we get stuck with it then we keep
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on making itc memes so that is equity
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financing the second option is called as
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debt financing now debt simply means
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taking a loan now a company like itc can
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go and take a loan from a bank now that
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essentially might not be a great option
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because the banks might not give them
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good rates bunch of different problems
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or there might be lunch time at sbi so
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itc people will not get a loan okay so
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sbi joke finally or the other option is
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that itc can go to the bond market so
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similar to stock market there is one
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market itc goes there and launches its
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bond so essentially wind wealth allows
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you to invest in corporate bonds or
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corporate debts so there are a bunch of
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corporate firms that are looking to
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raise money via corporate bonds and a
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company like wind wealth allow retail
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investors to invest in these corporate
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bonds so that is the overall summary of
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wind wealth and let me show you a couple
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of examples so this concepts get
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clarified so for example if you go on
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windville's website and check the assets
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so you can see that there is a company
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called as oxo and india shelter and they
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are launching their bonds this gets
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launched on 23rd march and you can go
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out and check the asset details so we'll
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click there this shows that this is a
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senior secured bond it will pay you 9.5
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interest and interest will be paid
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annually this is a two year tenure and
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you will get the principal amount at
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maturity now if you go through it you
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will see a series of different options
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also the minimum investment required
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here is 10 000 rupees so even retail
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investors can participate so to save now
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you can go through this tab and you can
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check out all the other details
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associated with this particular bond if
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you like it you can buy more units also
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so all these functionalities are there
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so i hope this clarifies that wind
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wealth is allowing you to purchase some
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corporate bonds that are being listed by
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corporate firms so let us very quickly
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understand the advantages and
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disadvantages of investing via wind
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wealth so there are three specific pros
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three specific cons i'll do a very quick
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commentary there so first and foremost
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the returns that retail investors make
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via wind wealth it's reasonable for
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example you will usually end up making
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between 9 to 11 return which is very
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good it is higher than fixed deposit and
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also higher than the historic returns of
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majority of the debt mutual funds so
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this is the first key advantage that you
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are getting higher returns and also the
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10-year or the time of the loan is
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shorter so it's usually around two years
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second key point is that the ticket size
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is very small so for example the example
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that i showed you earlier the ticket
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size was only ten thousand rupees to
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invest third key advantage is the
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wetting process for example if you have
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to go and scout for corporate bonds then
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two problems will happen at number one
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you will have a hard time getting access
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to corporate bonds that you will not
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know which platform to go to purchase
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which bond so that becomes a problem
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second key problem that you will have is
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that even if you come across some bond
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by a random corporate you would not be
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sure if they are telling you the truth
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so there is an entire waiting process
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that goes into it that if the corporate
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is credible are they backed
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substantially have the rated agencies
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vetted them and a bunch of other nuances
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so bottom line is that this wetting
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process is done by the windwells team
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and they are presenting the entire pro
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and corn analysis in front of you so
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please go check this is not a
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recommendation to buy at least go and
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read about the instrument if it makes
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sense to you go and purchase it so does
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that mean that everything is great you
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should pour all your money in there is
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no risk at all no nothing like that
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there are three specific risks which is
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listed on windwell's website so let me
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take you very quickly through it so the
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first risk is called as the credit risk
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that you lend your money to itc or any
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other corporate and that corporate goes
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bankrupt then you might lose all your
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money
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does that usually happen it happens
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rarely especially in debt because what
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happens is that if a company gets
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bankrupt for example let's imagine that
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itc goes bankrupt now i'll see a lot of
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people commenting that akshat you know
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what i like so much holding why did you
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take like itc's example so let's play
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along so let's imagine that itc goes
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bankrupt then the process would be that
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its assets will be liquidated factories
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their buses their machines what not
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right so everything will be sold and
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some money will be procured so that pool
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of money is first distributed to
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bondholders so they get first dibs on
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that money so generally speaking even in
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the case of liquidation it's not as if
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that your entire sum that you have
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invested in the bond market it goes to
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zero generally that does not happen but
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can it technically happen yes it can
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happen
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this is the first risk this is called as
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credit risk but having said this there
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is a team at the back end at wind wealth
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which is waiting everything so it's not
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guaranteed that 100 you will not lose
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your money but the chances are very very
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rare the second key risk is called as a
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liquidity risk so liquidity simply means
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that for example if you have invested 1
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000 rupee and you are expecting a yearly
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interest on it and at the end of two
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year period you are expecting the
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principal payment on it as well then
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many a times company do not have
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liquidity for example if the business is
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not doing well they will not have the
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cash with them to pay you for some
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reason so it becomes like a situation
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where companies become like babu bhiya
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from hira ferry so every time people
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used to come to babu via pablo
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so
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right so that's the liquidity risk that
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companies can have now the third risk is
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called as the fraud risk very easy to
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understand there that for example if the
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accounting is not clean if the numbers
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have been fudged up a classic case in
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point was the satyam scam right that the
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entire account books were fudged to
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begin with now 100 different types of
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scams can come out and that is called as
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fraud risk that some kind of fraud
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happens management fraud siphoning off
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of money and bunch of different
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different bad bad stuff can happen so
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these are three risk because of which
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the amount that you have invested via
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wind wealth can go to zero because the
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company is not acting in the right
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spirit but i hope in summary this gives
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you a sense what investing via went
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wealth would be like you can go check
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out the asset if it fits your risk
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portfolio risk profile and expected
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returns you can go and invest it i will
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categorize it as moderate risk option
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okay so if this is the moderate risk
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option can i talk about an option that
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is very less risky yes i can talk about
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that and that is called as debt fund
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investing now in debt fund investing
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what are you doing you are essentially
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purchasing debt mutual funds so you must
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have seen that there are 100 different
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debt mutual funds that are out there
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there can be ultra short short long mid
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that indicates a duration for example
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long-term debt mutual funds could be
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that you have to park your money for
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five years ultra overnight debt mutual
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fund means that you can withdraw your
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money even after one day so that is the
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duration or the tenure of the bond now
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debt mutual fund simply speaking is a
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collection of debt so rather than having
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debt from only itc you will have a debt
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from a bunch of companies two three four
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right so this becomes like a collection
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of debt so that is what did it mutual
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fund investing means that you pick art
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in your ultra short term short term
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midterm long term and what are you
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essentially getting into you are
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purchasing a briefcase of debt so that
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is what debt mutual fund means so very
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quickly let us discuss the advantages
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and disadvantages of debt fund now debt
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funds are of 100 types so i am just
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generalizing here essentially speaking
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the risk on debt fund is on the lower
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side because you are investing in a
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collection of debts so of course if one
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or two of those companies default then
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at least rest of your portfolio is
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prevented so the risk profile goes down
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the second advantage is that the debt
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fund depending on the type of debt fund
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that you are purchasing it usually gives
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you higher return than fixed deposit so
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it is better than that what are the
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disadvantages there are three key
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disadvantages number one the returns are
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lower compared to wind wealth second the
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commissions on debt funds are higher
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third and finally there is no clarity
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you don't know where your money is
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getting invested so let me demonstrate
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that by taking you to an example so for
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example if you check these three assets
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these are top performing mid to long
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term duration funds these are debt funds
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and if you take a look at icici
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prudential all seasons bond now you
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would not know through the name that
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okay where your money is getting
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invested sometimes the underlying
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structure changes so that clarity is
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less when you go and invest via wind
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wealth the clarity is more because you
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know exactly what you're investing into
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also take a look at the performance for
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example if you compare the three year
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return it's approximately 8.44 for sbi
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magnum it's 8.35 for icici prudential
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gift it's 9.15 five in case of wind we
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were getting nine to eleven percent in a
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ten year of two years this is the
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difference and also point to be noted
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that the three funds that i showed you
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they are the top performing funds from a
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mid to long term perspective so
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essentially if you are purchasing debt
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mutual funds then the returns are lower
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and also the risk profile is lower now
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let's talk about third and final option
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which is a swing trading option and this
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is a interesting technique that i will
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show you so if you have some bulk money
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lying around and if you want to invest
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in the stock market directly you can do
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that and you can take a simple swing
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trade
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let me show you an example for example
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here you can see that this is the nifty
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50 chart there is a very clear
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resistance line there is a very clear
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level of support lines this is support
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one this is support two so there are
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very clear support and resistance lines
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right what you do is that you simply buy
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nifty index fund here and you sell it
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off when nifty hits here so how much
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gain can you approximately make so you
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can simply make roughly six percent
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return right now by not taking insane
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amount of risk why i'm saying that there
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is no insane amount of risk in this
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because nifty always cuts its previous
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speed it might happen that nifty might
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break this resistance s2 also and it
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might fall below for example here is
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where that situation played out so a
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bunch of bad bad things can also happen
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but the point that i want to outline is
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that there is a system of doing swing
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trading is it risky yes it is risky but
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can you make returns out of it the
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answer is yes you can easily make
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returns out of it without using too much
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brain now i will show you this technique
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and discuss this technique on further
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videos otherwise this video will get
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really long do let me know in the
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comment box if you would want me to do
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that i will explain you the nuances but
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meanwhile do understand the fact that
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this swing trading method is the most
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risky one out of all three options that
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i discussed so as per your risk profile
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risk preferences and return preferences
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you can go and invest in all three or
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even one of these options i hope you
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enjoyed the video please press the like
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button and i will see you tomorrow
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