It is not an unfamiliar fact to the Indian citizens that the Indian economy is hitting a rough patch, with slipping GDP, interest rates, the collapse of the automobile and real estate sector, rising Non-Performing Assets (NPA’s) of the banks and sluggish consumer demand. With speculations of the arrival of a global recession, economic activity is at its minimum; investors are too cautious of giving away their hard-earned money to untrustworthy or potentially loss-making sources. Despite this prevailing suspicion, diversion of funds from surplus areas to reliable deficit areas becomes quintessential to pull the economy out of this downturn. But the question remains how?
‘Cheap is the love that has a price’ can be said as the apt description of penny stocks. Beginning with the legal definition, initially penny stocks were known as stocks being traded for less than $1 per share, however, the Securities Exchange Commission has modified the definition and made the limit to less than $5 per share.
As the name suggests, they are the stocks of small and growing companies, like startups, with the main benefit of financial or investment inclusion. It has attracted the eyes of many investors primarily because they do not require hefty bank balance to invest.
On a scale of 1-10, how much would you like to be in the news for having raised $XX Million for your company? If you’re anything like me, who likes the idea of entrepreneurship and business, you would’ve said 11.
But there’s always a flip side to the story. Behind all the glamorous photos and astronomical funding figures, is the burden and responsibility on the head of the Founders to deliver fabulous returns to the investors. Sure, we get all the news about the huge funding rounds that nascent start ups get. However, what is not reported, is the death and failure of a lot of such companies (90% of new start-ups fail, according to a report by IBM Institute for Business Value and Oxford Economics).
“All Mutual Funds are subject to market risks, and read all schemes related to documents carefully.” Undoubtedly, every individual reading this article must have seen or heard this disclaimer before. A quite obvious line as nothing comes at free of cost. But a careful and systematic planning can make something out of nothing. Before we proceed further, we must understand that what do we mean of Mutual Funds and how is it mobilising the funds within the capital market?