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A stock split is sometimes confused with bonus shares, however it is different from bonus shares. So, what is the difference between these two and which one is better for the investors?

To start with some basics - all publicly-traded companies have a set number of shares that are outstanding on the stock market. These shares are nothing but sub division of capital. So if a company's capital is 100 m divided into 10m shares of 10 each, then this 10 is called the face value of the share.

Stock Split:

A stock split is usually done by companies if their share price increase to levels that are either too high or are beyond the price levels of similar companies in their sector. The move is generally seen to improve the liquidity of scrip since more investors participate due to the smaller ticket size.

A stock split is done to increase the number of shares that are outstanding by issuing more shares to current shareholders. For example, in a 2-for-1 stock split:

• Two shares for  one share.
• Face value reduces by the split ratio, i.e., if earlier the face value was 10, after  the split it will reduce to 5 per share.
• The market price is  affected by a stock split and it will reduce by similar ratio, e.g.,  200 per share becomes 100.
• The market cap does not change, since the outstanding shares are same.

Important point to note here is there is no financial impact on the stock, due to stock split. Recent stock split done by companies include Titan Industries, VIP Industries and Crisil.

Bonus Shares:

Bonus shares, are given free of cost to the investors. So when you get a bonus share, the number of shares you own increases at no cost to you. A stock split is also like a bonus, but that is where the similarity ends. A bonus is a free additional share whereas a stock split is the same share split into different number of shares.For example, if a company was to issue a 1:1 bonus share:

• It would increase the amount of shares by 100% (1 share for every 1 share owned).If there are 1 million shares in a company, this would translate into an additional 1 million shares.
• Face value does not change.
• The market price changes and the price would reduce by half.
• The market cap increases, since the outstanding shares increase.

The bottom line is that a stock split is used primarily by companies to provide greater marketability and liquidity in the market. Whereas bonus shares are issued with the intent of rewarding the investor and the  financial effect of bonus share is that it increases the number of shares outstanding and reduces the earnings per share accordingly. Companies like Karur Vysya Bank, Infosys Technologies have rewarded investors with  consistent bonus issues and have performed well on the enhanced equity too.

The buzz word in the investing world is now - GOLD. Nowadays, there are many ways to invest in gold, other than buying physical gold and they are Gold ETFs and Gold Funds. There is a lot of confusion among retail investors about understanding and investing these products and we are quite sure this article would clarify things better.

To make things clear, both Gold ETFs and Gold Funds are mutual fund products — only the mode of purchase differs. The Gold Funds are fund of funds, which invest in their own fund house ETFs, for e.g., HDFC Gold Fund invests in HDFC Gold ETF.

Similar funds have been launched by Reliance mutual fund, Quantum mutual fund and Kotak mutual fund. Investors can get details of these funds from their respective websites.

Gold ETFs:

• ETFs are exchange traded funds launched by leading mutual funds which are traded in stock exchanges like Nse and Bse.
• You need a Dmat account and a trading account with your stock broker, to buy and sell these ETFs.
• Charges involved are brokerage charges and Dmat charges.
• They can be bought and sold over the exchange through a broker on a daily basis during trading hours. Gold ETFs provide an opportunity to benefit from changes in price movements of gold as the prices of gold ETF reflect the value of the underlying gold on real time basis.
• SIP is not possible, since it involves manual purchase by the investor every month.

Gold Funds:

• Gold Funds are fund of funds launched by mutual funds, which can be bought and sold through mutual fund agents or through online websites offered by the fund houses.
• You don't need a Dmat account or trading account.
• Charges involved - no entry load, but exit load of about 1 - 2%, if sold before one year from the date of purchase.
• Can be bought and sold on any working day, but the NAV of the fund at which the fund sells the units is based on the closing NAV calculated based on price of the gold on the previous day.
• SIP can be done, which is a good positive thing, since investing a fixed sum of money every month ensures you better average cost of purchase.

To sum it up, investing in Gold Funds are for those investors who want to invest in a simple and systematic method, involving lower costs. Whereas ETFs are for those active investors and traders, involving high costs and continuous monitoring of buying and selling.

With the emergence of smart phones, mobile applications have completely transformed how we live our lives. Applications make activities that we were once only able to perform in a stationary environment into something that we can do anywhere, anytime. Of the millions of activities, like banking, shopping, and more, that have now been made mobile, even stock trading is now made that much easier thanks to mobile apps. Here are some of the best ones out there:

1.Bloomberg
Bloomberg, the media and financial services behemoth, has always been a one-stop shop for information about the markets. Now, Bloomberg is available on a nifty app, so that you can have real-time stock information, market news, and more right in the palm of your hand.

2.E*Trade Mobile Pro
If you use E*Trade to buy stocks, then its mobile app is especially helpful, since you can use it to buy and sell stocks, transfer money from any financial institution, and monitor the markets with comprehensive charts and live stock quotes.

3.Virtual Stock Market Lite
Virtual Stock Market Lite is a great app especially if you are relatively new to the markets. When you download and begin using this particular app, you are given $100,000 in virtual cash to invest as you please. The app uses real stock prices and real markets, so using this app is wonderfully accurate, not to mention, fun, way to practice trading!

4.Stock Twits
Stock Twits has all the benefits of apps like Bloomberg in terms of information and news about markets. The one aspect of Stock Twits that makes it unique, however, is that it serves also as a social network for traders. You can follow traders who invest the same way you do, discuss different strategies, and generally become part of an entire community of like-minded investors.

Trading and investing has never been a walk in the park. It takes time and energy, business savvy, and of course, a little bit of luck. Using some of these apps, however, will enable you to access an enormous amount of data and expertise so that you can make the best investment decisions, any time and any place.

Author Bio:
This is a guest post by Nadia Jones who blogs at accredited online colleges about education, college, student, teacher, money saving, movie related topics. You can reach her at nadia.jones5 at gmail.com.

Investing your money can be a great way to ensure your financial future. With the right investment choices, you can be sure to have money for emergencies, to put towards the education of your children, and to have available when the time comes for you to retire. There is a key word in the preceding phrase however- “right”. If you make the wrong investment choices, you may just end up where you started or worse than that.Most people who invest wisely by making the right decisions with their money, follow the same basic investment pattern, although they may define it by another name. The following are simple but valuable investing rules, which have withstood the test of time and by following these, one can be successful in their investing venture.

S&P 500 and Dow Jones Industrial Average(DJIA ) indices are two of the world's most followed indices and are considered as the barometers of us markets. These indices have displayed historic resilience in holistically capturing the movements of the US markets. NSE is introducing rupee denominated future contracts on S&P 500 and DJIA indices. This is the first time in the world that futures contracts on S&P 500 index are being introduced and listed on an exchange outside USA.


S&P 500 is a free-float capitalization-weighted index 500 leading companies of the us economy and widely regarded as the best single gauge of the us equities market. Dow Jones Industrial Average (DJIA) is a price weighted index having 30 large and liquid blue chip stocks traded on U.S. exchanges.

Contract Details:

The contract size for the S&P 500 is 250 units and DJIA is 25 units, which approximately works out to 2.5 lakhs per contract. There are four quarterly expiry contracts in the mar-jun-sep-dec cycle and will be traded during Indian market time.

For whom?

Indian investors are currently permitted to invest in foreign assets subject to the limits stipulated by the Reserve Bank of India. Futures on S&P 500 and DJIA, currently being introduced by NSE shall enable traders desirous of taking exposures to us market to do so, without taking any foreign currency risk as they are rupee denominated contracts.

These contracts enable those invested in the us markets to hedge their equity exposure. Also, they can also be used as hedging tool by investors having a high exposure to stocks in sectors whose financial performance depends significantly on the prospect of the U.S. economy.

Other than the above mentioned investors/traders, market participants who can understand the dynamics of the U.S. markets can have directional views on the movement of the indices. As far as small investors  are concerned, this would be a avoid in the better interest of them.