JANUARY

JANUARY 2022 “There are decades where nothing happens, and there are weeks where decades happen” This quote by Lenin aptly defines the Covid mes. The last two years have been an educa on to all of us in resilience, pa ence, courage and the ability to march ahead unflinchingly, irrespec ve of the circumstances. The pandemic has brought forth the poten al risks to one’s life and income. As we move in 2022, increasing the awareness for basic protec on and facilita ng the economic con nuity for the loved ones needs to be amplified. Resolve to Long-term thinking and holis c wealth management. We all need to evaluate and re-evaluate our priori es. Asset Alloca on is one such integral part of por olio planning where the investment strategy a empts to balance risk versus reward by adjus ng alloca on in different asset classes according to the investor’s profile. It thus, minimises vola lity and maximises returns. Embrace the new year with a fresh start and improve your life!! The New year brings an opportunity to reflect upon the past year and set new goals for the year ahead. Consider se ng not only physical resolu ons, but mental and financial wellness resolu ons as well. Approach all the pivotal fields of Life planning and evolve as a sharper version of yourself! Ensure your affairs are in order and organised. Many of us shudder at the thought of making will. None of us live forever. Trust me it’s not as spooky as it sounds rather it’s really easy and important. Leave a legacy and not a liability. So, in this new year resolve to look at all the aspects of life methodically, from tax advisory to will crea on and everything in between… coz life goes on! Till we meet again… Truly yours, SHAILLY SETH CEO, 12months

Money Matters Why Asset Allocation Matters In the world of the investing, asset allocation is considered to be the fulcrum of one’s portfolio’s success. Research over several decades has shown that the key determinant for portfolio performance is optimal asset allocation. WHAT IS ROLE OF VARIOUS NOT A ONE-TIME ASSET ALLOCATION? ASSET CLASSES EXERCISE Most o en investors Asset Alloca on is the prac se of Each asset class has a unique role to tend to believe that spreading one’s investment across play in a por olio. Through domes c asset alloca on is a one- me various asset classes such as equity, equi es, an investor can aim to exercise. This is a folly as there are debt, gold etc. Within equity, today generate capital apprecia on through various factors that influence an domes c investors have the op on of India growth story while exposure to alloca on decision. With me an op ng for geographical diversifica on global equi es will provide individual’s risk profile undergoes as well through various funds which diversifica on benefits and help to sea change. For example: The risk offer exposure to different invest in mega trends. On the other profile of a 30-year old individual is interna onal markets. The key reason hand, debt aims to generate stable different from that of a 50-year old for prac sing asset alloca on is to returns and provide a cushion effect individual. This is the reason why it ensure that the por olio does not to the por olio during mes when is o en advised to seek the help of suffer from any sharp drawdowns in equity market turns vola le. Similarly, a financial advisor to chart out the event of an extreme development the role of gold is to act as a poten al asset alloca on in an op mal in any one asset class. hedge against infla on. manner. Here, the advisor will help you draw your por olio and re-look WINNERS KEEP ON at it on a periodic basis and CHANGING recommend rebalancing whenever needed. In effect, sta c asset YTD as alloca on may not always generate 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 on Now CAGR op mal investment experience. 22,2021 TAXATION Taxa on is an Gold Equity Gold Gold Equity Global Equity Debt Debt Equity Gold Global Gold Equity Gold important aspect of 28.61 90.96 24.22 31.85 33.48 Eq 39.30 8.51 14.30 37.65 7.67 Eq 28.24 31.38 11.60 asset alloca on. 35.76 26.78 When investors’ book profit in one asset class and switch to another Debt Global Equity Global Global Equity Debt Global Gold Global Debt Gold Equity Global Global asset class, an individual is bound 19.48 Eq 15.27 Eq Eq 4.82 15.31 Eq 10.08 Eq 5.16 24.58 17.89 Eq Eq to a ract short term and long term 25.72 7.61 17.03 0.30 14.24 18.60 9.48 capital gains. However, when the same is done on a fund house level, Global Gold Debt Debt Gold Debt Global Equity Global Gold Equity Debt Global Debt Equity the investor is exempted for any tax Eq 22.42 6.42 6.26 12.92 3.48 Eq 0.22 Eq 6.23 -2.14 12.07 Eq 3.57 -8.94 incidence arising out of por olio 4.36 8.41 17.27 rebalancing. As a result, asset -30.27 alloca on schemes tend to be beneficial. Equity Debt Global Equity Debt Gold Gold Gold Equity Debt Global Equity Debt Gold Debt -56.54 1.30 Eq -26.40 11.80 -7.90 -6.05 -6.64 5.12 4.38 Eq 8.97 13.78 -2.74 8.93 S NAREN 6.09 -3.06 ED & CIO ICICI Pruden al AMC Equity: Ni y 500 Index TRI; Global Eq: MSCI ACWI (INR Terms); Debt: CRISIL Long Exercise is closely linked with Term Debt Index; Gold: LBMA AM Fixing Prices. CAGR is calculated from January mental Health. 1, 2008 to November 22, 2021. All above figures are Calendar Year Returns for the respec ve asset classes. It increases brain growth factors and decreases oxida ve stress that As can be seen from the performance of various asset classes over the past decade and more, every other year, the winning asset class keeps on changing. cause damage to cell and ssue. The only way to make the most in such a situa on is by spreading one’s alloca on across asset classes, such that on an aggregate basis the por olio can tap into the poten al benefits and gains that each asset class renders.

Money Matters Financial Resolutions for The New Year New Year rings in the word “Resolu on” for all of us!! But usually our resolu ons are related to our Physical and to some extent professional lives. However, focussing on financial health is equally important as well. So here we share some new year resolu ons you can take to make yourself financially healthy. PREPARE A BUY IMPROVE BUDGET ADEQUATE YOUR CREDIT FOR THE YEAR HEALTH & SCORE Make a list of the day- TERM Make a resolu on to-day expenses that INSURANCE to monitor your you incur under the various heads like Covid-19 has not le us yet. The virus credit report atleast once a year. school fee, insurance premiums, etc. looms large on us. The past 2 years Improve your credit score and you Also, iden fy the big expenses that have taught us the importance of will be eligible for a higher loan at a you have listed for the year like health insurance. Don’t buy health compe ve interest rate. vaca ons or buying a new appliance insurance just to take the 80D benefit Individuals having a score of 750 or or home renova ons. This will help in the ITR. Look at it as an umbrella in more get the best credit terms. You you to plan your budgets in advance the downpour. Evaluate every can achieve a good credit score by and avoid the undue pressures on member’s health condi on in the paying EMIs, credit card bills and you. family and then assetss if your exis ng other loans before their due date. A health cover is sufficient or not. Based lower score means not only higher CONSOLIDATE on annual expenses, liabili es and the interest rates but some mes denial YOUR milestones, calculate the money of loans too. Also, keep in mind to PORTFOLIO required to maintain the exis ng maintain a zero-debt credit card. If The last two years lifestyle. Your Term cover should you pay only the minimum due on gave many of us the op ons to buy ideally be the gross value of these your card, then you accrue interest stocks, or invest in IPOs or NFOs as the expenses a er factoring the infla on. charges. Thus, pu ng severe market had it all. Some were ra onale financial strain and pushing you buying, some were impulsive and ACTIVATE towards the debt trap. It’s many coz someone known was MONTHLY 80 C advisable to use your credit card in buying! So now its me to consolidate INVESTMENTS case of emergencies and use it all and declu er your investment Many of us usually wisely. por olio. Simplify your finances and invest in the tax- review it periodically. saving instruments only at the me of SHARE filing income tax returns. To reduce FINANCIAL ASSESS YOUR your financial burden, start inves ng DETAILS FINANCIALS in the Equity linked Saving WITH YOUR Every individual Schemes(ELSS) on a monthly basis. FAMILY should check the This will not only help you stay Last but not the least, its really following ra os: net-worth, leverage, disciplined but shall maximise your important to communicate your loans to assets, savings ra o, savings returns as well. financial details with your family. to annual income, liquidity, cash to Let them know the details about assets and equated monthly RESOLVE TO your bank accounts, insurance, instalments vs. annual income. This INVEST 30% OF investments and so on at least to would help one evaluate not only YOUR INCOME the spouse or your dependant. their financial posi on, but also lay Spend a er you save. Recent reports say financial the founda on for taking the right This should be the mantra for your ins tu ons have ~ Rs 1 lakh crore of financial decisions in future. financial health this year. The average unclaimed money. You must ensure savings rate in India is ~30 percent. that at least all financial and ALLOCATE FOR This should be seen in the light of immovable assets have a nominee. AN EMERGENCY annual average per capita income Ideally one should execute a will so FUND being only Rs 1.5 lakh. So every the transi on is smooth. Ideally one should set earning member of the family should aside at least 6 strive to save at least 30 percent of CA ATUL SETH months’ worth of spending and it his/her income if not more. One should be used only in case of should ensure that this ra o is FCA, DISA (ICAI) emergency. Your spouse or maintained throughout his/her Insolvency Professional dependants should have the access to working life. Forensic Auditor these funds. If there’s any cri cal milestone or expenditure that is expected during the year, back it up with certain investments.

Myth Busters Do you have the MONEY BEN willingness to WILL? GYAN Death is inevitable for everyone & WILL is one of the most important documents an individual must have; yet, most of us ignore and overlook it, even a er having willingness to WILL. WHAT IS WILL? IS REGISTRATION MYTH: Insurance is for saving tax. A WILL is declara on OF A WILL REALITY : The main objective of of the inten on of a MANDATORY OR insurance is to provide inancial person with respect NOT? protection to you and your family to his/her property/ Registra on is op onal. and to build an assured corpus for assets, as per persons desires to take However, there are various your future needs. effect a er death. It provides how advantages of registering it. their property/assets can be You should invest all your money in a distributed, allocated, and u lised SOME single type of mutual fund to get a er their death. ADVANTAGES maximum return in your por olio. OF HAVING A WILL If the person really love their children 1. You are in control of a. True & family they must WILL, as it are b. False very important in ensuring that one’s your property/assets. property/assets are dealt as per their This means that you can ensure Whatsapp us your answers along with will. that those closest to you will your name and number on “6389321212”. receive your assets, such as your Early bird entries shall win exci ng prizes! A person who dies without crea ng a adult children and other will is known as a ‘dying intestate’ dependants. WRITE TO US which means that their family are 2. You also have the choice to leave FOR DISCUSSION now thrown into flux with respect to assets to beneficiaries who are not the status of the deceased’s estate, related to you. Resul ng in less If you wish for a FREE Investment whose property /assets will now be disputes a er your death. Por olio evalua on, write to distributed in accordance with the 3. Peace of mind for you and your [email protected] with “Por olio law (typically the personal law of the loved ones. By having a will, you can Wellness” as the subject or whatsapp to deceased) and not as per their avoid having family members or us on “6389321212”. Our team shall personal desires. friends applying to court and reach you for discussion/ appointment. compe ng to become an WHO CAN WILL? administrator(s) of your estate. Every person of a 4. Op on to choose and appoint an sound mind and is executor(s) you trust. not a minor can make 5. Time saving, quick process. Your a WILL. executor(s) will be able to get hold of the assets almost immediately Can will be made in any language? without the need to go through a Yes court process. Can WILL be will can be amended? 6. You can appoint guardians for your Yes. children. Can WILL be will be revoked? 7. Avoidance of standard distribu on Yes. under the law of intestacy. 8. Funerary Instruc ons for funerary All amendments and revoca on of arrangements can be made as per the will should be in wri ng and an your wish, burial or crema on, express revoca on clause would religious ceremony, etc. revoke all the prior wills. 9. Saving of Stamp Duty 10. Pay i n g l e s s i n h e r i ta n c e tax LAWS AND crea ng a will can help reduce the REGULATIONS amount of inheritance tax payable GOVERNING on the value of the property and WILLS money you leave behind. One primary legisla on governing wills in India is the Indian Succession GAUTAM SINGH Act of 1925 \"ISA\", governing wills made by Hindus, Buddhists, Sikhs Advocate and Jains, while Muslims are Supreme Court of India governed by their own personal law dependent on whether they are Sunni or Shia. 12months Consultancies Pvt. Ltd., Rudra Vatika, #22, 153 Shri Ram Nagar Colony, Bazardiha, Varanasi-221106 T: +91 - 6389321212 | E: [email protected] | W: www.12months.in Disclaimer: Views and opinions expressed in the newsle er are not necessarily those of 12Months, or its editor. The newsle er is solely meant for the purpose of awareness. We do our best to verify the informa on published, but do not take any responsibility for the absolute accuracy of the content. 12Months does not accept responsibility of any investment or other decision taken by readers on the basis of informa on provided herein.