A privately owned startup firm with a valuation of over $1 billion is referred to as a “unicorn” in the venture capital sector. Aileen Lee, the founder of Cowboy Ventures, a seed-stage venture capital firm located in Palo Alto, California, was the first to coin the word. Aileen Lee, a venture capitalist, created the phrase in 2013.

As of March 2022, there are over 1,000 unicorn enterprises throughout the world.

The existence of unicorns is a contentious topic. While some experts feel that unicorns are just a product of technological advancement and innovation, others argue that the growing number of unicorns is a symptom of an industry bubble.

Valuation of Unicorns

The value of unicorns is based on valuations created by venture capitalists and investors who took part in the company’s fundraising rounds. Because unicorns are all startups, their worth is essentially determined by their potential for growth and predicted development. The value of unicorns is unrelated to their actual financial performance or other essential information. Many of the firms have yet to make any profits, despite their excessively high valuations.

Unicorns are valued abnormally high for a variety of reasons.

The following factors are sometimes used to justify abnormal valuations:

1. A plan for rapid expansion

For the development of a business, venture investors nowadays largely rely on fast-growth methods. Such methods promote significant sums of money to be invested in each round of funding in order to gain as much market share as feasible as quickly as possible, as well as to avoid the formation of major competitors in the marketplace. As a result, the value of a unicorn firm rises with each round of funding. 

2. Purchases

Many potential firms are currently unable to achieve the standards for an IPO. Instead, internet behemoths like Facebook and Google buy a slew of startups to diversify their portfolios and thwart the emergence of big competitors.

Large corporations gain from the agreements since they may purchase existing technology rather than having to construct something identical from the ground up. The fierce rivalry among the IT behemoths prompts them to offer a considerable premium, inflating the value of target firms and resulting in the creation of unicorns.

3. New ideas

Technology advancements enable firms to develop more quickly. Unicorn firms are able to reach their consumers faster and reduce the time it takes to reach mass production by utilizing innovative technology.

For the year 2021, India has been ranked as the third-best country for hosting unicorn enterprises. With 33 unicorn firms, India has pushed the United Kingdom out of third place, where just 15 unicorns were created in the same year. In 2021, the United States added 254 unicorns, while China added 74 unicorns, bringing the total number of unicorns to 487 and 301, respectively.

In 2021, Indian companies were expected to collect $42 billion in investment across 1,584 deals. Over 6 lakh job possibilities have been created in India’s startup ecosystem, which has seen over 60,000 new firms launched across 56 different industries since 2016. President Ram Nath Kovind made a specific note of this in his Presidential speech on January 31, 2022, when he stressed the new potential that India’s entrepreneurs are bringing in.

There are a few important dates for the financial year 2022-23 that you must remember. See-through all the dates to avoid penalties and fines.

What if you missed filing your ITR?

If the initial due date for submitting an income tax return is missed, a belated return can be filed later beyond the due date. The income tax department also sets the date by which the late return must be filed. This deadline has been pushed back three months to December 31st of the assessment year (unless extended by the government).

However, if the return is not filed on time, a penalty of Rs 5,000 would be imposed. Moreover, if the person’s total income is less than Rs 5 lakh, the cost is only Rs 1,000.

The investment portfolio is a combination of different investments such as stocks, mutual funds, real estate investment, and so on. It is a long-term investment strategy.

Importance of the right Investment portfolio-

1. Low market volatility 

A well-diversified investment portfolio serves to reduce the portfolio’s total risk. The total impact of market volatility tends to reduce if investments are made across several asset classes and categories.

2. Various investing alternatives

Investors enjoy the distinctive benefits of each instrument while reducing risk by picking various investment alternatives such as mutual funds, ETFs, term deposits, and so on.

3. Assists with risk management

Investment alternatives that adapt to unique economic situations are at the heart of a varied portfolio. While an investor with a diverse portfolio would not obtain unusually high returns compared to one who buys a single, high-flying stock, they will also avoid the market’s ups and downs. In other words, an investor will get weighted average returns on their underlying assets, but will not be entirely exposed to the volatility of those securities.

The investment portfolio building consists of 3 steps:

1. Risk analysis
2. Asset allocation
3. Review and maintain balance

Now let us learn about these steps in brief-

• Risk analysis

The ability to take risks is more objective. It is dependent on your age and future earnings possibilities. A youthful earner is likely to be a high-risk taker. It is, to some part, a result of how much money you have (compared to your income needs).

If you’re an older investor with a low-risk tolerance but a high-risk appetite, you shouldn’t invest in a portfolio containing a lot of risks.

If you’re young and have a high-risk tolerance but a low-risk appetite, you shouldn’t work with a particularly aggressive portfolio. A cautious portfolio, on the other hand, may not be the best option for such young investors.

• Asset allocation

It refers to the percentage of each form of investment in your portfolio that you hold, and it’s crucial for attaining optimal diversification. Factors influencing asset allocation include:

i) Your return expectations

ii) Your level of risk

iii) The length of time you plan to invest.

If you have a high-risk profile, want to earn large returns, and have a long-term investment horizon of more than 15 years, your portfolio asset allocation can look like

This:

i) 80% of the money is invested in stocks

ii) Bonds get 15% of the money

iii) 5% is allocated to cash and cash equivalents

This is, nevertheless, a highly simplified understanding of asset allocation. Ideally, you would analyze the full investing spectrum and diversify your portfolio among two or three investment possibilities, such as a stock fund, a bond fund, and maybe a real estate investment trust.

• Review and Manage

Your portfolio will deviate from its target allocation due to market fluctuations.

While you won’t be able to rebalance for every tiny variation from goal allocation, do so on a regular basis (say, once a year) or when the target allocation exceeds a specific level.

In addition, keep an eye on your satellite portfolio’s selections (both equity and debt) on a frequent basis.

Financial stability is defined as a state in which the financial system is not unstable. Financial stability comes when the financial system is well-structured to enable smooth market discipline functioning, both the financial safety net and the payment and settlement system are operational.

It can also be referred to as a state in which the financial system’s three components — financial institutions, financial markets, and financial infrastructure are all stable.

The phrase ‘financial institution stability describes a situation in which individual financial institutions are sound enough to carry out their financial intermediation functions sufficiently without the help of external institutions such as the government.

‘Financial market stability refers to a state in which market transactions are not disrupted significantly, and financial asset values are not significantly deviated from economic fundamentals, allowing economic actors to raise and manage money with confidence.

Financial stability is “a state in which the financial system can smoothly assist actual economic operations and is capable of unravelling financial imbalances emerging from shocks,” according to a more wide definition.

Importance of Financial Stability

Financial stability is necessary not just for price stability, which is the central bank’s policy aim, but also for the economy’s healthy development. This is because financial instability imposes significant costs on an economy, as price volatility in financial markets rises, and financial institutions or firms may fail. Furthermore, economic progress may be hindered at this period because economic factors find it difficult to make reasonable judgments, and resource allocation efficiency suffers.

• According to the Financial Stability Board (FSB), an international watchdog, the rapidly expanding crypto marketplaces might pose a serious danger to global financial stability if policymakers do nothing.
• The benchmark Sensex fell 2,702 points, or 4.72 per cent, on the Indian stock market. This is Sensex’s fourth-worst drop ever in absolute terms. The index dropped 2,850 points throughout the trading day.
• The National Stock Exchange’s wider Nifty 50 index fell 815.30 points, or 4.78 per cent, to 16,247.95 points.
• Bullion was used by investors as a safe haven. At the Multi Commodity Exchange (MCX) in Mumbai, gold prices increased by about 3% to Rs 51,750 per 10 gramme, while silver prices increased by over 3% to Rs 66,556 per kilogramme. The price of gold and silver has reached its highest level in almost a year. So far this month, gold and silver prices have risen by more than 8%.
• The current gold price increased by 1.9 per cent to $1,943.86 per ounce on the international market, the highest level since January 2021. Gold futures in the United States increased by over 2% to $1,949.20 per ounce.

Following Russia’s military operation in Ukraine, stock markets throughout the world are bleeding. This resulted in a tremendous loss of money for the investors. The BSE-listed businesses’ market capitalization fell to Rs 242.24 lakh crore. It lost over Rs 13 lakh crore in a single day.

A non-fungible token (NFT) is a non-transferable unit of data that may be sold and exchanged and is held on a blockchain, a type of digital ledger. Digital media such as photographs, movies, and music may be connected with several types of NFT data units. NFTs vary from blockchain cryptocurrencies like Bitcoin in that each token is uniquely recognized.

Although NFT ledgers purport to give a public certificate of authenticity or proof of ownership, the legal rights that an NFT conveys might be ambiguous. NFTs do not block the production of NFTs with identical related files, nor do they restrict the sharing or copying of the underlying digital data. They also do not impart the copyright of the digital files.

Lets now see the Pros and Cons of NFT

Pros

• They can be used to fractionalize physical asset ownership.

Fractionalizing ownership of some assets, such as real estate, artwork, and expensive jewellery, is challenging today. A computerised replica of a structure is considerably easier to split among several owners than an actual one. The same may be said for a valuable piece of jewellery or a limited-edition bottle of wine.

The market for some assets can be considerably extended by digitalization, resulting in more liquidity and higher pricing. It can improve the way financial portfolios are built on an individual basis, allowing for more diversification and more precise position size.

• NFTs’ Blockchain Technology Is Extremely Safe

NFTs are made with blockchain technology, which is a method of storing data that is hard to hack, change, or destroy. A blockchain is essentially a digital record of transactions that is copied and distributed throughout a peer-to-peer network of users.

All NFTs kept on the blockchain contain unique records of authenticity and chain-of-ownership, preventing them from being mishandled or stolen in theory. Data can’t be edited or removed after it’s been added to the chain. This ensures that each NFT’s scarcity and authenticity are preserved, fostering a level of trust uncommon in many markets.

Cons

• NFTs can harm the environment

It takes a lot of computational power to build blockchain records, and there’s a lot of talk about how bad the process is for the environment in the long run. According to some projections, the carbon emissions related with mining cryptocurrencies and NFTs would exceed those associated with the entire city if current trends continue. NFTs revolutionise global marketplaces, eliminating the need for travel and office space consumption, blockchain supporters say that an offsetting drop in pollution is happening.

• NFTs are volatile and illiquid.

The market for NFTs is not particularly liquid due to their immaturity. NFTs aren’t well-understood, and there aren’t many potential buyers or sellers. As a result, NFTs can be extremely difficult to trade, particularly during times of stress. As a result, NFT pricing can be quite variable.

• NFTs don’t bring in any money.

NFTs, unlike dividend-paying equities, interest-bearing bonds, and rent-generating real estate, do not provide income to their owners. The rewards on NFT investments, like those on antiques and other collectables, are totally dependent on price appreciation, which is not something you should bank on.

NFT’s Future

NFTs are a fascinating invention that is gaining a lot of attention as its applications grow. The attention-getting price tags on certain NFTs are adding fuel to the flames. However, because NFTs are very illiquid and volatile, smart investors should proceed with caution when considering purchasing these assets.

It’s not a good idea to buy them in the hopes of getting triple- or quadruple-digit price returns. The true value of NFTs rests in their ability to change the way markets work and improve how we handle and regulate critical data. The sky is the limit here.

Investing is an important aspect of building wealth. Investment helps us in meeting our financial goals and gives a pathway to a safe and secure future.

There are several investments in the market, but choosing the ideal investment is very important. The following is a list of investments that can help you save money.

Stocks

When you buy a stock, you become a shareholder in a corporation. Ownership shares, often known as equity shares, are represented by stocks. The success or failure of a firm, the sort of stock you own, what’s going on in the share market as a whole, and other factors all have a role in whether you earn money or lose money on a stock.
Stocks and stock mutual funds may be a valuable part of a well-balanced investing strategy.

Cryptocurrency

A cryptocurrency is a digital, encrypted, and decentralized medium of trade. There is no central body that administers and maintains the value of a cryptocurrency, unlike the US dollar or the Euro. Instead, these responsibilities are divided throughout the internet among the users of a cryptocurrency.
Although most individuals invest in cryptocurrency as they would in other assets such as stocks or precious metals, you may use crypto to buy conventional products and services. While cryptocurrency is a fresh and interesting asset class, investing in it may be dangerous since you must conduct extensive studies to properly comprehend how each system operates.

Fixed Deposit

A fixed deposit, commonly known as an FD, is an investment product offered by banks and non-banking financial institutions to assist consumers to save money. An FD account allows you to invest a large sum of money for a certain length of time at a specified rate of interest. You receive the lump payment, plus interest, at the end of the term, which is a fantastic money-saving strategy. Fixed deposit accounts come with a variety of interest rates. You have the option of choosing a fixed deposit for a term ranging from 7 to 10 years. This is why a term deposit is sometimes known as an FD. When you open a fixed deposit account with a particular interest rate, it is referred to as a “fixed deposit.”

Mutual Funds

A mutual fund is a form of financial vehicle that invests in securities such as stocks, bonds, money market instruments, and other assets by pooling money from multiple participants. Professional money managers manage mutual funds, allocating assets and attempting to generate capital gains or income for the fund’s investors. The portfolio of a mutual fund is built and managed to meet the investment objectives indicated in the prospectus.
Mutual funds provide access to professionally managed portfolios of shares, bonds, and other assets to small and individual investors.

Cryptocurrencies are the new day investment. An urge has grown amongst people for cryptocurrencies. Here is a list of the top 5 cryptocurrencies one should buy in 2022 for a short-term investment.

1. Algorand

Algorand is the first cryptocurrency to dethrone all of the main meme currencies. Its one-of-a-kind blockchain consensus technique outperforms typical proof-of-stake systems. This process, known as pure proof-of-stake, may pick small groups of ALGO holders to vote on proposals and propose blocks in a private and random manner. Algorand’s creators have virtually reduced the chance of tiny groups of holders disturbing the market using this randomization.

2. Chainlink 

Chainlink is a cryptocurrency that enables tamper-proof and dependable inputs and outputs for complicated smart contracts on any blockchain. With the aid of Chainlink, investors may connect to any external APIs and transfer money anywhere. Its decentralized network allows for the review of the same data before it is used as a trigger, preserving the crypto’s total worth.

3. Ethereum 

In the crypto market, Ethereum is a well-known participant. It has been in the market since 2015 and is the second-largest digital currency by market capitalization. The cryptocurrency is preparing to unveil Ethereum 2.0, which will address the major issue that Ether currently has with transaction speed.

4. Dogecoin

DOGE has been a popular issue in the crypto business as one of the key meme currencies thanks to celebrities and huge tech executives. Since its inception in 2013, Dogecoin has amassed a devoted following and has established itself as a viable cryptocurrency choice. Unlike many other cryptos, such as Bitcoin, there are no restrictions on how many Dogecoins may be issued, making the currency vulnerable to depreciation as supply grows.

5. Polkadot

Polkadot wants to unify them by developing a cryptocurrency network that connects the many blockchains so that they can function together. This fusion is unique.

Go and start investing in your favourite cryptocurrencies!!!