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Thinking of investing all your surpluses in your favourite mutual funds? Read this – Economic Times

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The market has witnessed the fastest fall in its history. Many stocks are available at extremely attractive or cheap valuations currently in the market. While the whole world is anxious about the nationwide lock-in and prospects of the ravaged global economy, some brave souls are hunting for the bargains. There are anecdotal stories that online brokerages are facing deluge of applications from individual investors. Some mutual fund investors are also becoming adventurous and talking about investing their surpluses in their favourite existing mutual fund schemes. Is it a good strategy?

Mutual fund advisors and financial planners are asking investors to tread cautiously and avoid adventurous steps in the current market conditions for two reasons. One, we have not dealt with a situation like the current one earlier. Two, it may present new challenges to you on health and professional fronts. That means you have to go to the drawing table and redraw your financial plan.

First, let us deal with the novel situation that has unnerved most experts. It is true that most investment experts typically ask investors to buy more when the market corrects significantly. However, you might have noticed that things are quite different this time. Most experts, especially the sensible ones, are asking investors to tread extremely cautious and do be adventurous.

“On logic based on historical data points , there is no doubt that this is a good time to start investing . However, I wouldn’t want investors to put in their entire surplus today. The world is dealing with a crisis and we don’t know how/when the market will emerge from this. Keep that in mind. If you have the appetite to take this risk, invested in a staggered manner over next 25-50 weeks,” says Subir Jha, Founder, BuckSpeak, a wealth management firm based in Hyderabad.

What is different this time?

You know the answer. Most of the market falls are based on some negative news, data, etc. However, this time we are dealing with a deadly virus that is striking across the globe and leaving many dead. It is playing havoc with the economies across the globe, probably leading to a severe economic slowdown and huge fiscal deficits.

The trouble is: most people can’t recall anything like this happening in their lifetime. That is what makes the predictions very difficult this time. We simply do not know how soon or how long we would be able to finish off the virus threat. Will the economies around the world bounce back once immediately? Or will it take a long period? So many questions, but no concrete answers to any.

That is why the sensible advice of wait for the clear picture is doing the rounds.

With that we reach the next point: uncertainties on our health and career fronts. Thanks to the forced isolation of people and complete national lock-down, the economy is going to suffer a great deal. Many businesses that are heavily dependent on consumption might be servery hit. Already many daily wage earners have lost their jobs and next is the turn of those working in small and medium enterprises. Unless the government offers incentives, many of these firms will be forced to trim their workforce or shut shops.

This will have a cascading effect on the economy and it might have some impact on your personal careers, too. Also, you should be prepared for a health-related emergency. These two uncertainties might force you to revisit your liquid investments and emergency funds you have earmarked for such situations.

Subir Jha asks investors to be mindful of the risk to their regular income in this critical time, as businesses get hit. “Avoid investing in equities , if your job is at risk . Take help from colleagues/seniors/ friends from similar profession , to assess this risk . These are unprecedented times and you shouldn’t risk your lifestyle for earning extra returns in the long term,” says Jha.

Many financial planners believe that the conventional three-to-six months’ living expenses may not be able to deal with the current situation. You should make sure that you have investments in liquid assets to take care of your living expenses for at least six to 12 months. This is extremely crucial to take care of any shocks from medical expenses and job losses. And it is very important if you have financial dependents or children.

Once you are through with the exercise, you may go for your bottom fishing and invest the money in your favourite mutual fund schemes.

“If you have a surplus (money that you do not need to use in an emergency or for short-term goals), you should invest. Investors should put money in every major fall. However, it is very important to be sure about two things. One, you don’t need the money for at least for the next five years. Two, stagger your investment over some months,” says Chokkalingam Palaniappan, Director, Prakala Wealth Management.

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How Does Investing In Killam Apartment Real Estate Investment Trust (TSE:KMP.UN) Impact The Volatility Of Your Portfolio? – Yahoo Finance

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<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="If you're interested in Killam Apartment Real Estate Investment Trust (TSE:KMP.UN), then you might want to consider its beta (a measure of share price volatility) in order to understand how the stock could impact your portfolio. Modern finance theory considers volatility to be a measure of risk, and there are two main types of price volatility. First, we have company specific volatility, which is the price gyrations of an individual stock. Holding at least 8 stocks can reduce this kind of risk across a portfolio. The second type is the broader market volatility, which you cannot diversify away, since it arises from macroeconomic factors which directly affects all the stocks on the market.” data-reactid=”28″>If you’re interested in Killam Apartment Real Estate Investment Trust (TSE:KMP.UN), then you might want to consider its beta (a measure of share price volatility) in order to understand how the stock could impact your portfolio. Modern finance theory considers volatility to be a measure of risk, and there are two main types of price volatility. First, we have company specific volatility, which is the price gyrations of an individual stock. Holding at least 8 stocks can reduce this kind of risk across a portfolio. The second type is the broader market volatility, which you cannot diversify away, since it arises from macroeconomic factors which directly affects all the stocks on the market.

Some stocks mimic the volatility of the market quite closely, while others demonstrate muted, exagerrated or uncorrelated price movements. Beta can be a useful tool to understand how much a stock is influenced by market risk (volatility). However, Warren Buffett said ‘volatility is far from synonymous with risk’ in his 2014 letter to investors. So, while useful, beta is not the only metric to consider. To use beta as an investor, you must first understand that the overall market has a beta of one. A stock with a beta greater than one is more sensitive to broader market movements than a stock with a beta of less than one.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content=" View our latest analysis for Killam Apartment Real Estate Investment Trust ” data-reactid=”30″> View our latest analysis for Killam Apartment Real Estate Investment Trust

What we can learn from KMP.UN’s beta value

Given that it has a beta of 0.87, we can surmise that the Killam Apartment Real Estate Investment Trust share price has not been strongly impacted by broader market volatility (over the last 5 years). This means that — if history is a guide — buying the stock would reduce the impact of overall market volatility in many portfolios (depending on the beta of the portfolio, of course). Many would argue that beta is useful in position sizing, but fundamental metrics such as revenue and earnings are more important overall. You can see Killam Apartment Real Estate Investment Trust’s revenue and earnings in the image below.

TSX:KMP.UN Income Statement April 10th 2020TSX:KMP.UN Income Statement April 10th 2020

How does KMP.UN’s size impact its beta?

Killam Apartment Real Estate Investment Trust is a small company, but not tiny and little known. It has a market capitalisation of CA$1.8b, which means it would be on the radar of intstitutional investors. Small companies often have a high beta value, but they can be heavily influenced by company-specific events. This might explain why this stock has a low beta.

What this means for you:

One potential advantage of owning low beta stocks like Killam Apartment Real Estate Investment Trust is that your overall portfolio won’t be too sensitive to overall market movements. However, this can be a blessing or a curse, depending on what’s happening in the broader market. In order to fully understand whether KMP.UN is a good investment for you, we also need to consider important company-specific fundamentals such as Killam Apartment Real Estate Investment Trust’s financial health and performance track record. I urge you to continue your research by taking a look at the following:

  1. Financial Health: Are KMP.UN’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
  2. Past Track Record: Has KMP.UN been consistently performing well irrespective of the ups and downs in the market? Go into more detail in the past performance analysis and take a look at the free visual representations of KMP.UN’s historicals for more clarity.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.” data-reactid=”53″>If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.

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Vietnam to disburse $30 billion of public investment funds this year to tackle virus impact – TheChronicleHerald.ca

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HANOI (Reuters) – Vietnam will aim to disburse $30 billion in public investment funds this year, up 67% year-on-year, the government said on Friday, as it seeks to boost an economy hit hard by the coronavirus outbreak that has infected 255 people nationally.

Public investment, excluding investment made by state-owned enterprises, often accounts for around one-fifth of Vietnam’s total investment and is spent on infrastructure and social development projects.

The Southeast Asian country’s gross domestic product in the first quarter of this year grew at its slowest pace in 10 years, at 3.8% due to the pandemic.

(Reporting by Khanh Vu; Editing by Muralikumar Anantharaman)

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Vietnam to disburse $30 billion of public investment funds this year to tackle virus impact – The Guardian

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HANOI (Reuters) – Vietnam will aim to disburse $30 billion in public investment funds this year, up 67% year-on-year, the government said on Friday, as it seeks to boost an economy hit hard by the coronavirus outbreak that has infected 255 people nationally.

Public investment, excluding investment made by state-owned enterprises, often accounts for around one-fifth of Vietnam’s total investment and is spent on infrastructure and social development projects.

The Southeast Asian country’s gross domestic product in the first quarter of this year grew at its slowest pace in 10 years, at 3.8% due to the pandemic.

(Reporting by Khanh Vu; Editing by Muralikumar Anantharaman)

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