Connect with us

Tech

How do I choose a smallcase? Selecting a Smallase

Published

on

How do I choose a smallcase? Selecting a Smallase

While Technology has made investment advisory affordable, retail investors are increasingly shifting towards picking model portfolios / smallcases from the days of individual stock picking. There are 100s of smallcases available on the Smallcase platform. Hence, we are writing this article to help you in selecting a smallcase. In this article we use model portfolios and smallcases interchangeably.

Risk Appetite:

Everyone should invest only as per his/her risk appetite. Model portfolios have equity allocation ranging from 0% to 100%. While aggressive investors are comfortable investing in smallcases with even 100% equity, and conservative investors should go for smallcases which have lower allocation to equity. Because of this wide-range of smallcases collection, it’s important to assess his/her risk appetite and invest accordingly. At Gulaq, we designed a risk profiling tool which helps investors assess their risk category and select appropriate portfolios. Here’s the link to the risk profiling tool

Investment horizon:

If you are looking for long term gains, never select concentrated portfolios. The concentration might be based on sectors, or themes or factors. Always select the portfolios which are diversified in terms of market cap and also in terms of how the portfolios are constructed. For Example, momentum portfolios are based on a single factor and hence risky in the long-term. Multi-factor investing based portfolios are better suited for long-term investments, as they are diversified across themes, sectors, and factors. This will help investors avoid the unnecessary hassle of timing their entry and exit in the theme based portfolios.

Backtesting results:

Take backtesting results with a pinch of salt. It is very easy to come up with a strategy which has performed well in backtests. Whether it will perform in live markets or not, is a totally different thing. Always give more importance to live results.

Analyzing Live performance:

When you see the live performance, always see how the portfolios performed during rising markets and during falling markets. Smallcase allows users to switch time periods from 1 Month to 5 Years, check how the small case is performing compared to different benchmarks across time periods.

Investment team:

Always see the team behind the portfolios. Lately because of the huge investor interest in the model portfolios, there are many portfolios being offered by 1-2 person teams who have just started operations. See the live track record of portfolios, the quality and experience of the team behind the portfolios, and size of the team.

Diversification:

A well diversified portfolio reduces the drawdown risk over long-term. While selecting a portfolio, watch out for what kind of strategy the portfolio is based on. For example, a theme based smallcase is likely to perform well as long as the theme is performing well. Hence, one must carefully consider how diversified the portfolio is and what is the time horizon they can look at based on the extent of diversification. Go for a well-diversified portfolio.

Influencers Trap:

A recent trend has started where influencers have started offering smallcases. Even though there might be a star fund manager behind the portfolios, many of them haven’t been able to keep up with the changing nature of the markets. While picking these smallcases, be cautious about their recent 2-3 years performance. If a fund manager underperforms over a 2-3 year period then surely you need to think twice before investing with them.

Subscription fee:

Have an understanding on how much investment you are likely to make in one year, and calculate the subscription fee as a percentage of your investment. Pick such a Small case, which doesn’t cost you more than 2-3% of your AUM.

Some portfolios tend to have lower minimum investment size, which makes the subscription fee a higher percentage of AUM. Don’t get carried away with subscription fee/minimum investment percentage, instead try calculating subscription fee/annual investment size.

There is no universal smallcase, which is the right investment for everyone. The above factors help you in the process of selecting the right smallcase.

Happy investing!

Tech

What Are the Different Types of Water Heaters That Exist Today?

Published

on

What Are the Different Types of Water Heaters That Exist Today?

Did you know that water heating accounts for as much as 20% of your household energy use? And that figure grows the longer you stay in that nice hot shower!

Of course, the types of water heaters you choose can also increase (or reduce) your that figure. Once upon a time, people just had a simple hot water tank heated by a fuel of some kind. Today, there’s a surprisingly extensive range of water heaters to choose from, and knowing which is best for your home can be daunting.

If you’re upgrading your current heater or choosing appliances for a new build, diving into the pros and cons of each machine is essential. Below, we explore it all. So read on!

What Is a Water Heater?

Before you can find the best water heater for your home, you need to understand what a water heater is and does!

Believe it or not, but the is right there in the name: a water heater is an appliance that heats the water in your home, which you then use to wash dishes, clean your body, and wash your clothes–among other activities.

Before the 1890s or so, Americans had to heat their water in an enormous metal bucket atop their wood-burning stoves. Then, they’d carry it over, bucket by bucket, to fill a bathtub in the kitchen.

Today, we’re far luckier–we have water heaters and indoor plumbing to do the job for us.

How a Water Heater Works

Now we’ve cleared that up, let’s explore how a residential water heater does what it does. While there are many types of water heaters (more on those later), they all work in similar ways.

First, water is fed into a tank or runs through a pipe. Then, the water is heated slowly (in the case of the tank) or rapidly (in the case of the pipe) until it reaches a pre-determined temperature. Then, when you turn on the hot tap anywhere in your home, the water leaves the tank or runs through the pipes, arriving in the sink or shower hot.

Water heaters mostly used to function on electricity, but now you can run water heaters on gas, solar, and even the hot air from your attic!

If you need a water heater replacement, that’s usually a plumber’s job. But, unfortunately, it’s also typically a significant expense!

Types of Water Heaters: Explained

Let’s say your current water heater has broken down, and you’re in the market for a new one. If you’re a smart homeowner, you’ll look into all the standard options available today rather than just buying a replica of what you already had.

Conventional

Almost every homeowner will be familiar with a conventional or tank-style water heater when it comes to homeownership. If you didn’t have one in the house you bought, you almost certainly grew up with one in the house.

This water heater has a tank that fills with water. The tank has two valves:

  • A temperature control valve, which releases at 120 F
  • A pressure control valve, which releases at 150 PSI

The water in the tank is constantly re-heated to stay at the desired temperature. Then, the hot water is piped all over the house as needed.

Tank water heaters come in various capacities depending on your budget, how it’s powered, and the size of your home (namely, how many places in your house need hot water).

Tankless

Some homes (especially new homes) have a tankless water heater installed.

As soon as you turn on the hot tap, the coils in the water heater are filled with water. Next, an element heats the coils, which heats the water. It’s the instantaneous result that people love about these water heaters.

In most cases, this type of heater is powered by gas. If they’re run on electricity, they might not be as efficient and may raise your utility bills more than you’d like.

Tankless water heaters are great for homes using a small amount of hot water, like condos or apartments. However, larger homes requiring larger volumes of water might get tepid rather than hot water coming out of the tap.

They also require a certain level of water pressure to function effectively.

Hybrid or Heat Pump

If you’re looking for ways to lower your utility bills (and who isn’t these days), consider a hybrid water heater.

This type of heater uses the heat from the ground and the air to heat water. It only uses electricity to transfer the heat to the water, rather than using it to heat the water itself, saving energy.

This type of water heater is typically quite significant because it features a pump on the top of the appliance. This means you need a decent amount of ceiling clearance to install it in your home.

And while it’s relatively inexpensive to run and easy to maintain, it has a higher upfront cost than most other types of water heaters.

Solar

A water heater option to emerge in the past decade or so is the solar-power water heater. This option is excellent for those considering adding solar panels to their home and perfect for anyone who already has them!

You need to connect your water tank to solar panels installed on your roof to get hot water. The energy from the sun is transferred to the tank via a closed-loop system made of heat-conductive material. It’s this that heats the water in the tank.

Just remember that while solar is beneficial (and cost-saving) in most parts of America, areas with low sunlight hours might not get the return on investment they were expecting.

Get the Steamy Bathroom of Your Dreams

Whether you’re happy to stay on the grid or excited to embrace the eco-friendly age, there are types of water heaters to suit.

Environmentalists can choose between solar-powered water heaters and heat-pump or hybrid options. Traditionalists or those in areas with low sunlight hours can stick with a conventional water heater or go for a tankless model. What’s essential is that you do your research on how each option meets your needs and shop around for the best prices.

For more advice on everything household related, browse the other articles on our website.

Continue Reading

Trending