The allure of generating consistent 5% to 10% returns within a one to two-month timeframe captivates both novice and experienced investors. While such targets are ambitious and come with substantial risk, understanding the methodologies used by active traders can help you identify stocks with heightened probability for short-term appreciation. This comprehensive guide explores actionable strategies, technical indicators, and fundamental filters that traders employ to spot these opportunities while emphasizing the critical importance of risk management. Understanding the Landscape of Short-Term Trading Before diving into specific stock selection criteria, it's essential to recognize that targeting 5-10% monthly returns places you in the realm of active trading rather than passive investing. This approach requires daily market monitoring, disciplined entry and exit strategies, and emotional resilience. The stocks capable of delivering such returns typically exhibit hi...
Sometimes when you buy a mutual fund,
you pay a small penalty at the same time. This is called an exit load. The majority
of mutual fund schemes impose an exit load, although there are some that come
without an exit load. Before we go ahead, remember that a fund with no exit
load is no better than a fund with an exit load. Whether the exit load is
imposed or not has nothing to do with the pedigree of the scheme. It is
important to understand why exhaust loads are present.
Why put an exit load
Exit loads are mainly applied to discourage
premature withdrawal in the mutual fund. Fund managers responsible for
long-term plans will want their investors to invest in the fund for a long
time. This is desirable because if too many investors exit together, the fund
manager has to sell the shares in distress, to companies that are liquid, but
usually mismanaged, robbing existing investors of their future growth
potential. Does matter. Therefore, the fund has to put an exit load in a fund
to discourage investors from exiting soon.
various types
Sometimes the fund has a flat exit
load. In a second way, they have a structure; The high load for the initial
withdrawal and then you stay invested for a long time until the exhaust load
goes down until it disappears after a period. Debt funds that follow a
contingency strategy have higher exit load than other types of funds because
this strategy calls for patience in investing. If you withdraw up to 10% of
your units per year, the Franklin India Credit Risk Fund does not carry any
exit load. For units exceeding this limit, it charges 3% for withdrawals before
12 months, 2% for withdrawals before 24 months, 1% for withdrawals before 36
months, and zero thereafter. Equity funds usually have an exit load that is
valid for one year after you invest.
The machinations
Prior to 2012, AMCs used to collect
exhaust loads and used for sales and marketing activities. Existing investors,
however, will have to lose due to premature withdrawals from other investors,
especially when they were of large size. But in 2012, the capital markets
regulator, the Securities and Exchange Board of India (SEBI), said the exit
load should go back to related schemes. The goal here was to protect existing
investors from prematurely withdrawing funds. SEBI allowed fund houses to
charge an additional 20 basis points in each scheme, in lieu of losses due to
AMC not pocketing the exit load. However, in June 2018, SEBI ordered AMC to
increase spending from 20 basis points to 5 basis points. This was done to
reduce the cost of investing in mutual funds.
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