Tag: explainers

Explained: How one tweet cost hedge funds over a billion dollars

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Keith Gill, a social media influencer popularly known as Roaring Kitty, put out a tweet on Sunday. On Monday, the losses for some of the world’s biggest hedge funds added up to a billion dollars.

The 37-year-old Gill was the man behind the meme stock rally in 2021 is back with a bang.

What are meme stocks?

A meme stock is one that gains popularity on social media. People like Gill try to influence large groups of unorganised individual investors into buying the stock.

The stocks that the influencers have picked are usually the ones that aren’t popular on Wall Street. Gamestop was one of them in early 2021 before Gill raised a storm on Reddit, a social media platform, which led to the stock gaining over 21 times in just a few weeks.

Big traders, like hedge funds, who hold short positions on such stocks i.e. they expect the stock to fall, lose money when such unprecedented rallies occur.

Something similar has been underway in the last couple of weeks. Shares of Gamestop, the world’s first meme stock, were trading at $10.91 on April 30. Today, each share of Gamestop costs over $30.

The stock gained over 74% on Monday alone. Hedge funds that had bet against Gamestop have lost $1.24 billion as on May 13, according to a CNBC report citing analytics firm S3 Partners.

Here’s the tweet that caused much of the damage.

pic.twitter.com/YgjVqtgcNS

— Roaring Kitty (@TheRoaringKitty) May 13, 2024

After over 12 million views within hours of the post on X (the social media platform formerly called Twitter), according to Bloomberg, Gill posted on X again at 11 a.m. New York time, this time a short video clip stating “Fine, I’ll do it myself.”

“That he is able to generate a crowd says that the crowd is back to feeling FOMO and YOLO in an enormous way,” Peter Atwater, president of Financial Insyghts and an adjunct professor at William & Mary and the University of Delaware, told Bloomberg. “When people dive into things that are of pure speculative value, their confidence is extremely high and this is one of the ways that it manifests.”

Gamestop has lost over of 60% of its value at the peak of the meme stock rally in January 2021.

Small investors must remember that manic buying based on a hysteria that originated on social media doesn’t usually lost. Many latecomers to the meme stock rally in 2021 were left holding the proverbial bag.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Explained: India’s food inflation continues to be stubbornly high

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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In April 2024, vegetable prices went up by 27%, a tad below the 28.3% inflation clocked in March, but it’s the fourth consecutive month when vegetable prices have grown over 27%.

Prices of pulses and other products went up over 16% in April, lower than the previous months but still very much on the higher side, prompting the government to take actions like scrapping import duty on chickpeas and extending duty-free imports of yellow peas.

Prices of cereals have continued to rise by over 8% in the last two months. While prices of meat and fish have grown steadily over the last 3 months, prices of eggs and spices have come off from their highs.

Vegetable, pulses and to some extent cereal price inflation has probably pushed food price inflation to over 8.7% in April, higher than even the February food price index which rose by 8.66%. While food & beverage prices rose 7.87% in April, higher than March’s 7.69% and 7.76% rise witnessed in February. Food & beverages comprise close to 46% of the retail inflation basket.

Also Read: India receives $111.22 bn in remittances in 2022, first country to surpass $100 billion mark

Madhavi Arora, Chief Economist, Emkay Global, said, “Considerable uncertainty prevails in the food price outlook. Despite healthy progress in Rabi production, uneven seasonality in vegetable prices together with increasing incidence of climate shocks warrant careful monitoring. The RBI cannot do much to influence food supply management, but this puts pressure to stay vigilant on domestic dynamics.”

This could also be impeding a sharper decline in headline retail inflation, with retail inflation for April registered an easing of 2 basis points over March. In the last MPC meeting, RBI Governor Shaktikanta Das indicated stubborn food inflation may be preventing a quicker easing of CPI inflation. The governor’s observations may have dimmed hopes of an early rate cut by the central bank.

Sanjeev Agrawal, President of PHD Chamber of Commerce & Industry, said, “In the recent months, inflation has come down significantly due to continuous softening in housing inflation from 3.2% in January 2024 to 2.6 in April 2024, fuel and light from -0.6% in January 2024 to -4.2 % in April 2024, clothing and footwear categories from 3.3% in January 2024 to 2.8% in April 2024 and pan, tobacco and intoxicants from 3.2% in January 2024 to 2.9% April 2024.

Also Read: India must prepare for a US stagflation, says Sanjeev Sanyal

However, inflation is still sticky in food and beverages at 7.8 in April 2024. Going forward, the inflation trajectory is expected to become normal by September/October 2024 as many of the Kharif crops will be entering the mandis and supplementing the existing supply.”

Rajani Sinha, Chief Economist, CareEdge Ratings, said, “Reversing last month’s trend, food inflation inched up to 7.9% as the ongoing deflation in the oil and fat category fell to a single-digit after 12 months.

The high inflation in specific food categories, including vegetables and pulses, remains a concern. While the outlook for food inflation has brightened due to anticipations of a normal monsoon, the temporal and spatial distribution of monsoon would be critical factors.

Apart from elevated food inflation, the incremental risk to inflation stems from the uptick in global commodity prices, especially industrial metals. Industrial metal prices are up ~20% in the past three months. This warrants closer attention as the rise in input prices can be passed on to the consumption basket.”

Also Read: Kumar Mangalam Birla says Indian economy ‘just looking like a wow’

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

What is a solar storm? Know its impact

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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A powerful solar storm in nearly 20 years hit Earth on Friday, sparking magnificent auroras visible from Tasmania to Britain and other parts of the world. Apart from painting the night sky in its surreal hues on Friday, the solar event is likely to continue over the weekend as well.

“This is an unusual and potentially historic event,” Clinton Wallace, Director of the Space Weather Prediction Center of the US National Oceanic and Atmospheric Administration (NOAA) said.

What is a solar storm?

A solar storm stems from a specific activity on the Sun. According to a report on ABC, large ‘clouds’ containing billions of tonnes of plasma embedded within an ejected magnetic field erupt from the Sun’s outer atmosphere or corona. This process is called coronal mass ejections (CMEs), and they cause the solar storm, according to NOAA. Unlike solar flares, which reach Earth in minutes, CMEs travel slower, with the current average speed at 800 kilometres (500 miles) per second.

The storm can disrupt satellites and power grids. Authorities have advised satellite operators, airlines, and the power grid to take precautions against potential disruptions caused by changes in Earth’s magnetic field.

Impact of solar storm

It majorly interferes with several services, including GPS navigation, weather forecasting, communication, and other satellite-dependent services. Besides that, it also has a significant impact on satellite networks and communication. They can create geomagnetically induced currents (GICs), which can overload electrical systems and cause damage to transformers, issues with voltage regulation, and widespread power outages.

Furthermore, because solar storms increase the amount of solar and cosmic radiation that reaches the top regions of Earth’s atmosphere, they also pose health concerns to people, especially aircraft crew and passengers, especially on flights at high latitudes.

Also read | Brazil floods, Dubai rains and more: 6 devastating climate events this year so far

NOAA’s Space Weather Prediction Center has issued a Geomagnetic Storm Warning for Friday, May 10, with the possibility of additional solar eruptions leading to continued geomagnetic storm conditions over the weekend.

These storms have the potential to disrupt infrastructure in near-Earth orbit and on Earth’s surface, affecting communications, the electric power grid, navigation, radio, and satellite operations. Operators of these systems have been notified by SWPC to take protective measures.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Why ETFs tracking international indices are available at significant premiums on Indian stock exchanges

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Exchange-Traded Funds (ETFs) that track international indices are currently available at significant premiums on Indian stock exchanges. This increase stems from recent regulatory measures implemented by the Securities and Exchange Board of India (SEBI).

SEBI’s decision to halt asset management companies (AMCs) from investing in overseas ETFs, effective April 1, has triggered a domino effect.

With traditional avenues for international investment restricted, ETFs tracking international indices have emerged as the go-to option for investors. However, the surge in demand for these ETFs, coupled with limited supply, has led to increase in premiums, according to a Value Research report.

Typically, ETF prices are expected to hover around their net asset value (NAV). However, the current scenario sees a vast majority of ETFs trading at premiums far exceeding their NAV.

This means investors are effectively paying more for the underlying assets than their actual value.

“For instance, ETFs like the Mirae Asset NYSE FANG+ ETF and Mirae Asset S&P 500 Top 50 ETF are being sold at premiums of 23.9% and 15.2%, respectively,” Value Research said.

Here’s a table showing the premiums of some of the ETFs:

(Source: Value Research)

Such premiums alter the investment landscape and impact potential returns.

While purchasing ETFs at a premium might seem like a viable option, it fundamentally alters the risk-return profile of the investment.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

South Africa to Russia: All you need to know about the longest walkable route on Earth

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Have you ever wondered about the most remarkable and challenging walkable route on Earth? Though people across the globe have often gone to faraway places in search of adventure, there is this one journey which remains yet to be fully explored.

We are talking about an epic trek spanning an astonishing 22,387 kilometres (13,910 miles). This longest walkable route connects Cape Town in South Africa to the port town of Magadan on the eastern side of Russia.

The route is not much explored yet; no person has been able to complete this long walk so far, according to multiple reports.

The netizens have called this the “potential longest walkable road”.

As per reports, this longest possible route passes through as many as 17 countries, crossing multiple mountains and deserts. And if you are thinking of making an effort to be the first one to cover this route, let us remind you that the total distance between the two destinations is a staggering 22,387 km.

However, you may consider reducing the hard work by taking a boat across the Black Sea which will ultimately save you some hours. The total distance of the route in this case shall be 21,779 kilometres.

How to cover this distance?

Those planning to go this route, can travel via Africa and later cross the Suez Canal via Turkey, and Central Asia, and then move toward Siberia and later Russia. To cover this whole distance, you will have to travel through various countries under different time zones and weather conditions.

Can it be covered on foot?

Well, if you are thinking about embarking on this journey on foot, you will have to keep walking continuously for a total of 4,492 hours. Without breaks, the total time accumulates to 187 days.

If you are thinking about walking eight hours a day, then you will be able to cover this distance in 562 days. In this time, you can conquer the world’s highest peak Mount Everest 13 times and return, as per reports.

This route passes through several conflicted nations like Syria and Sudan. To enter some of these nations on the route, you will be required to apply for a visa.

Besides this, you will be required to deal with the scorching heat of the Sahara Desert, Siberia’s nail-biting snow, and so much more.

To cover this distance, a traveller requires strong survival skills and good immunity for the body to stay healthy in the changing weather conditions.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Multiple cases of West Nile fever reported in Kerala; know its symptoms

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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At least five cases of West Nile fever have been confirmed in Kozhikode, north Kerala, health officials said. The infected people, including children, are all fine and back at their homes, an official of the district surveillance team said.

At least one individual, suspected of suffering from the vector-borne infection, is currently undergoing treatment, the official said.

Besides Kozhikode, West Nile fever cases have also been reported in Malappuram district of Kerala, reports said.

Meanwhile, the Kerala government on Tuesday said West Nile fever cases have been reported from Thrissur, Malappuram and Kozhikode districts of the state.

State Health Minister Veena George confirmed that cases of the viral infection have been reported in the state and that all the districts have been asked to be vigilant.

There was no need to be concerned, but requested anyone showing signs of fever or other symptoms of the West Nile infection to seek treatment immediately, the minister said in a statement.

Samples of people, who showed symptoms of the disease and underwent treatment, were sent to the Pune-based National Institute of Virology as a routine exercise.

“The results came back now and indicated that they were suffering from West Nile fever. They are all better now,” PTI quoted the official as saying.

What is West Nile fever?

The West Nile Virus (WNV) was detected for the first time in a woman in the West Nile district of Uganda in 1937. The fever is spread by the Culex species of mosquitoes. In India, the fever was first detected back in 2011. A six-year-old boy from Kerala’s Malappuram had passed away due to the fever in 2019.

Later, a 47-year-old man died of the fever in Thrissur district in May 2022.

According to the state health department, the WNV can cause a fatal neurological disease in humans, however, most of the persons who are infected by it may not show any symptoms. It is mainly transmitted to humans through the bites of infected mosquitoes.

WNV is majorly found in Africa, Europe, the Middle East, North America and West Asia, according to the World Health Organization (WHO).

Symptoms

Around 80% of people infected with West Nile Virus are asymptomatic and do not show any symptoms, while in several cases it can lead to West Nile fever or severe West Nile disease.

Some of the major symptoms seen among patients infected with West Nile fever include fever, headache, tiredness, body aches, nausea, vomiting, skin rashes and swollen lymph glands.

Besides this, some patients can even show severe symptoms including neck stiffness, stupor, disorientation, coma, tremors, convulsions, muscle weakness, and paralysis, the WHO stated.

It is further estimated that one in 150 persons infected with the West Nile virus may develop a more severe form of the disease.

In most of the cases, the incubation period is usually three to 14 days.

Who is at risk of contracting infection?

Anyone can acquire a WNV infection. However, persons who are at the highest risk for serious illness are persons over 50 years of age.

What is the mortality rate?

The death rate is relatively low compared to Japanese encephalitis which shows similar symptoms and is more dangerous. Those who get infected with the virus tend to develop lifelong immunity.

What are the preventive measures against the spread?

The minister said there was no need to be concerned, but requested anyone showing signs of fever or other symptoms of the infection to seek treatment immediately.

The statement said that instructions to begin pre-monsoon cleaning activities were already given in a high-level meeting held last week and now the District Medical Officers (DMOs) have been directed to further intensify the same.

There is no medicine or vaccine available against WNV. So only, symptomatic treatment and prevention are key, according to the health minister. As part of the preventive measures, she suggested wearing clothing that completely covers the body, use of mosquito nets and repellants and keeping one’s home and surroundings clean.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

CBI issues Blue Corner Notice against JD(S) MP Prajwal Revanna over sexual abuse allegations; what it means

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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A Blue Corner Notice has been issued by Central Bureau of Investigation on Tuesday, May 7, against JD(S) MP Prajwal Revanna and grandson of former Prime Minister HD Deve Gowda who is facing sexual abuse allegations. His father and JD(S) MLA HD Revanna was remanded to police custody until May 8 by a Bengaluru court in a related case.

Karnataka Home Minister Dr G Parameshwara on Sunday, May 5, said that Prajwal is stated to have left the country. Hence, a Blue Corner notice is issued against him, while Interpol’s help is being sought to bring the BJP-led NDA’s Hassan Lok Sabha candidate back to the country.

This comes as explicit video clips allegedly involving the 33-year-old grandson of JD(S) patriarch and former Prime Minister HD Deve Gowda, started doing rounds in Karnataka’s Hassan in recent days. After this, the Congress-led state government constituted a Special Investigation Team (SIT) to probe the sexual abuse allegations against Prajwal.

The SIT was formed on recommendations of the Karnataka State Commission for Women chief Nagalakshmi Chowdhary. The decision was taken as several explicit videos of Prajwal, allegedly sexually abusing women, became public in the state.

In total, there are three FIRs registered in connection with the sexual abuse allegations, involving both HD Revanna and his son Prajwal Revanna, PTI reported.

In the first case in Holenarasipura, a cook and relative of the Revannas complained that the two had molested her, while the second complaint at CID Bengaluru mentions a JD(S) leader accusing Prajwal of raping her at gunpoint, filming the incident and later blackmailing her. The third complaint is related to HD Revanna and pertains to the abduction and illegal detention of a woman, the news agency reported.

Understanding Interpol’s notices

As per the official website, the Interpol notices are “international requests for cooperation or alerts allowing police in member countries to share critical crime-related information.”

There are several types of notices Red Notice, Yellow Notice, Blue Notice, Black Notice, Green Notice, Orange Notice, Purple Notice and the INTERPOL–United Nations Security Council Special Notice.

They are issued by the General Secretariat at the request of a member country’s INTERPOL National Central Bureau and are made available to all the member countries to consult in the notices database.

Blue Corner Notice

A Blue Corner Notice is issued to collect additional information about an individual’s identity, location or activities about a criminal investigation.

The Central Bureau of Investigation (CBI) refers to them as ‘B Series (Blue) Notices’ and states that they are also called ‘enquiry notices’. These may be issued to have “someone’s identity verified; to obtain particulars of a person’s criminal record; to locate someone who is missing or is an identified or unidentified international criminal or is wanted for a violation of ordinary criminal law and whose extradition may be requested,” the central agency states.

In the case of Prajwal Revanna, the Blue Corner Notice has been issued to gather more information and advance inquiries into the matter.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Short-term vs long-term investments: Which is better for you and when?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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When it comes to investing surplus money, individuals are often faced with the decision of allocating their funds based on their financial goals and timelines. The distinction between short-term and long-term investments plays a crucial role in shaping the outcome of one’s investment strategy.

Here’s a breakdown of when each type of investment makes the most sense.

Short-term investments

Short-term investments typically span from a few weeks to three years and offer various options such as cash equivalents, bonds, and fixed income securities.

As per Swati Saxena, Founder & CEO – 4 Thoughts Finance, these investments provide liquidity when needed and help prevent inflation from eroding the value of money by generating returns in the short run.

Advantages of short-term investments:

• Lower risk profile
• Short-term investments are less exposed to market fluctuations, making them suitable for short-term liquidity needs.
• Real rate of return
• According to Saxena, deploying short-term funds in the right investment options can generate returns, preserving the real value of money.
• Liquidity and accessibility
• Short-term investments offer flexibility, allowing investors to withdraw funds for unforeseen expenses or needs.

Points of caution

Saxena advises investors to avoid over-ambitious return expectations for short-term investments. “One should remain focused on investments aligned with the appropriate time horizon, avoiding distractions from short-term market noise. Investors should further seek guidance from active and neutral investment counsellors to maximise long-term outcomes,” he said.

Long-term investments

Long-term investments, held for more than three years, aim to accumulate wealth over time by focusing on assets like equity and real estate, which appreciate in value and offer compounding returns.

Advantages of long-term investments:

• Compound returns and growth
• Long-term investments leverage the power of compounding returns, leading to significant wealth accumulation over time.
• Mitigating market instabilities
• Long-term investments provide the opportunity to recover from short-term market fluctuations.
• Simplified approach
• Unlike short-term investments that require constant monitoring, Saxena believes that long-term investments allow investors to focus on assets expected to appreciate over time, with periodic portfolio rebalancing.

Disadvantages of long-term investments:

• Liquidity constraints
• Long-term investments are not suitable for meeting short-term needs, except in emergencies.
• Risk of volatility
• Long-term investments are subject to market fluctuations, and untimely exits may lead to real losses.
• Understanding risk and reward
• While long-term investments offer potential for good returns, investors must carefully assess the risks involved and align them with expected rewards.
• Striking the right balance

Achieving optimal wealth management involves striking a balance between short-term and long-term investments.

“By understanding the characteristics and advantages of each type of investment, along with having a solid investment plan, individuals can navigate their financial goals effectively,” Saxena said.

Ultimately, making informed decisions about investment horizons is key to maximising wealth and ensuring the realisation of financial objectives.

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Why multi-asset funds can be a good bet amid market volatility

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Mutual fund houses have been increasingly advocating for the adoption of multi-asset funds since the outset of 2024. Several fund houses have introduced multi-asset funds in the past month. These funds, characterised by their diversified investments across equity, debt, and commodities, offer a strategic approach to weathering market volatilities.

Why consider multi-asset funds?

Shaily Gang, Head of Products at Tata Asset Management, stresses on the advantages of incorporating multi-asset funds into one’s investment portfolio.

As these funds are managed by professionals who possess the expertise to navigate various asset classes, Gang believes they can potentially outperform individual investor strategies.

“Through tactical allocation decisions and efficient portfolio rebalancing, multi-asset funds minimise tax implications and offer diversified exposure,” Gang told CNBC-TV18.com.

Notably, fund managers constantly monitor market conditions and economic indicators to strategically allocate the fund’s assets across different classes such as equity, debt, and commodities.

So, they may adjust these allocations based on their assessment of which asset classes are poised for growth and which ones may face challenges.

By making these tactical decisions, they aim to optimise returns while managing risk in a volatile scenario.

Additionally, they address common investor anomalies.

While diversification may limit gains from a specific asset class, it balances risk and reward for long-term investment success.

Gang believes that multi-asset funds are particularly beneficial for those who seek exposure to different asset classes with smaller investments, offering stability, diversification, and professional management.

How much to allocate?

Gang recommends a strategic and consistent allocation to multi-asset funds.

For investors with a 40% exposure to hybrid funds, dedicating 10-20% of their portfolio to multi-asset funds provides a balanced and diversified approach.

“This allocation range enables investors to capitalise on professional management while effectively managing risk across different asset classes,” she told CNBC-TV18.

A look at returns of some of the existing multi asset allocation funds

(Source: Moneycontrol)

Factors to consider and risks involved

Parking funds in multi-asset funds necessitates careful consideration of several factors.

Investors should evaluate their risk tolerance and investment objectives to ensure alignment with the fund’s diversified nature.

As per Gang, understanding the fund manager’s strategy and the potential impact of tactical allocation decisions is crucial.

“While diversification mitigates risk, it may also limit gains from specific asset classes. Monitoring economic trends, inflation expectations, and global market conditions is imperative, as past performance does not guarantee future results,” she said.

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Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

As Kerala revamps licence test modalities, driving schools go on strike; all you need to know

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Several driving school unions have challenged the Pinarayi Vijayan-led government’s decision to completely revamp the driving licence test in Kerala. The test has been made more rigorous and challenging for aspirants now.

The Kerala Motor Vehicles Department is implementing the new reforms from Thursday, May 2.

Several driving school associations, including unions affiliated to the Indian National Trade Union Congress (INTUC), Centre of Indian Trade Unions (CITU) and the All Kerala Driving School Owners Association have boycotted driving tests across the state for the day, according to reports.

The unions have started a state-wide strike and demanded withdrawal of the circular by the state government, PTI reported.

The union leaders have claimed that they are seeking more time for its implementation and are not against the new reforms.

They added that their main opposition was to the directives to install a dashboard camera on vehicles used for learning and testing. Besides this, they are also against the ban on vehicles older than 15 years for testing and learning.

“We have not been given any training as to how to conduct the new tests, and no infrastructure has been prepared for the conduct of the new tests,” Unni, a member of the All Kerala Driving School Owners’ Association, told PTI.

He stated that they are opposing the “haste of the government in implementing these reforms,” adding that a case in this regard is already pending before the Kerala High Court.

Earlier, the association challenged the circular in the High Court, stating their agitation would continue until the circular was withdrawn.

Interestingly, in Kerala’s Kasaragod region, the driving tests have been suspended until May 24 as applicants have received a message from the Transport Department rejecting their application citing COVID-19 as the reason, Onmanorama reported.

At the Muttathara testing ground in Thiruvananthapuram, six applications had registered for the driving test on Thursday, but none of them were able to complete it as they were blocked by protestors.

“They were blocked by the protestors, and we could not conduct the tests… The applicants could not enter the testing ground,” Venu, Motor Vehicles’ Inspector, said.

Meanwhile, the new learners have welcomed the government’s decision regarding new reforms. They have said that it will improve driving skills and road behaviour.

The circular by the Kerala Motor Vehicles Department was issued on April 4, amending the conditions for the driving licence test, the news agency reported.

As per the new rules, a candidate will be required to undergo several real-life driving challenges to secure a pass to earn a licence.

What are theChanges in driving test

The circular states that it will be mandatory to conduct the road test on a road with busy traffic. Also, the tests will be held on angular parking, parallel parking, zig-zag driving, and gradient testing before coming to the ‘H’ test on the ground.

Further, it has been made mandatory to conduct a maximum of 30 driving tests per day, including 20 new and 10 from the earlier failed batch.

To avail of a two-wheeler driving licence, an individual will be allowed to use only motorcycles with gear pedals on the leg above 95 cc during the test. Also, no electric cars or automatic cars will be allowed during the test to obtain a four-wheeler driving licence.

Moreover, it has mandated a dashboard camera and a vehicle location tracking device on the light motor vehicle that will be used for testing. These devices will have to be installed by the driving school owner.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow