News and views

November 19, 2008
The rise and fall of FMPsFor FMPs, it's been quite a journey from seemingly-innocuous, yet popular investment avenues to limelight-hogging villains.
November 17, 2008
Why you MUST invest when the market fallsIf you are investing with a three-year perspective, start now and invest more heavily at every fall, says .Have a credit card? Get free insuranceCredit cards come with insurance covers that help in circumstances like accidental death or loss of goods, says .Get rich with SIPSIPs can give better returns in a volatile market because they gather more units over time, says .
November 03, 2008
Buying insurance? Some good tipsThe sum assured is just the premiums that you have paid plus some basic level of return. People often mix investments with insurance. This causes them to often look at the sum assured without understanding the death benefits of the policies in detail.
October 27, 2008
Stocks: Opt for a buy and hold strategyThough valuations look attractive, the holding period will have to be longer. If you operate inside that timeframe of transaction-reversal, you can make trading profits. Otherwise, if you favour the safe philosophy of buying low and selling high, this is a good time to buy in terms of valuations. Buying property? Why you MUST waitWhile there has been some correction in property prices, there is a strong likelihood that there is more to come. Also, home loan rates, which are at 11-13 per cent (floating), will see some reduction. But all that will take some more time. And, in such times, it is best to wait. This holds true even if you are purchasing your first home. Property prices will come down, sooner than later.FMPs vs FDs -- which is better?Financial planners say that though FMPs have been offering stable returns in the past, caution should be the key word now. "I have been advising short-term FDs for the time being," admits Suresh Sadagopan, director, Ladder 7 Financial Planners. The reasoning is that though returns from FMPs are more attractive, investors in today's market have to be more cautious. Anyway, their portfolios in the equities are suffering because of a sharp fall in the stock markets.Fixed deposits: Some valuable tipsFirst, it is important to gauge the financial strength of the bank. Second, the period of the deposit is vital. Often, a higher rate of return is available for specific time maturities like 10 per cent for 360 days and so on. Third, the amount is important. In most cases, if the deposit is above Rs 15,00,000, the bank offers a higher than normal rate of interest. Fourth, since there can be a big difference in the various rates of interest being offered, read the fine print.
October 20, 2008
Investment tips for crisis timesStick to disciplined investing. Do your homework thoroughly before committing your funds or you will be speculating. This is not advisable on both counts of managing risk and enhancing returns. Preferably, add companies that are leaders in their respective businesses. The companies should have reasonably decent prospects, sound management and strong entry barriers, apart from healthy financials that will help them tide the current rough patch.5 mantras to survive a slowdownReduce high-cost loans, create a contingency fund and play long term. These are the only mantras to survive during a slowdown.
October 14, 2008
Worried about your money? There is complete panic among investors. There are many who would like to exit to just make sure that they reduce their losses. For lump-sum investors in mutual funds, it would be quite tempting to even book losses. However, for investors who have taken the systematic investment plan route, it makes little sense to do so.
October 13, 2008
Not planned your tax investments? Here's helpRegular investments in Section 80C instruments earn better returns as well as reduce the pressure on your funds. Instead, most of us end up in a last-minute scramble to invest to save tax in the month of February or even March. "This is why tax-saving products such as equity-linked saving schemes and unit-linked insurance product have the highest sales in the month of March," says Vikas Vasal, executive director, KPMG.
October 07, 2008
Why liquid funds can be good for youIn the last one year, liquid funds have returned between 7.7 per cent and 8.85 per cent. Liquid-plus funds, on the other hand, have slightly higher returns between 8.4 and 11.29 per cent. Obviously, that makes them a better choice as against money earning a dismal 3-3.5 per cent in your savings account.Time to re-look at your investments?Rebalancing your portfolio is an important part of money management. Here's when to do it and how.
October 03, 2008
Your credit card fees may soon riseMany banks have started upgrading their customers to platinum or titanium cards.Home, life insurance is not 'wealth'The strategic portfolio should be tinkered with only once in two or three years. Ideally, the trading part should not be more than 5-10 per cent of your total portfolio.
September 29, 2008
Money lessons for womenYes, while it's true that women are looking at everyday needs of the family, it's imperative as well that they keep a tab on their financial security to ensure a safe future.Cash-crunch to cash-rich in 6 easy stepsTo raise cash, you need not sell assets built over time. Instead, use them to meet immediate liquidity needs.
September 22, 2008
2 plans to help you buy low and sell high"Buy when there is blood on the street," advised the legendary investor, Baron Rothschild. But it takes enormous courage to buy when there is widespread gloom and panic around. However, once you decide your right investment mix between wealth-growing but volatile investment avenues, such as shares, and wealth-protecting ones such as bonds or bank deposits, formula plans can help you automatically achieve the golden key to stock market riches--buy low and sell high.
September 16, 2008
Do you feel let down by your MF investments?Even investors in equity mutual funds have borne the brunt of falling markets. As a result, several investors are in panic mode. Some are even contemplating redeeming all their mutual fund investments and instead making investments in risk-free avenues like fixed deposits and bonds.What sets aggressive equity funds apart?Aggressively managed equity funds can be differentiated by either the style of investing or the nature of the underlying investments. Investors often make the mistake of investing in mutual funds without fully understanding the implications of the investment. One common area where investors are confused is with regards to aggressively managed equity funds.
September 15, 2008
Debt funds: Liquid versus liquid plusWhile most investors appreciate the importance of investing in debt (like debt funds, for instance), the lack of knowledge about debt instruments and their complicated nature, prevents them from venturing into this segment. Moreover, the jargon associated with debt instruments can be confusing for the average investor. That explains why debt investment remains a mystery for a majority of investors.Credit card caution: use it wiselyImpulsive plastic money spenders face the prospect of paying interest rates in excess of 40 per cent a year.
September 12, 2008
Credit card addict? Switch over to cashFor those, who cannot control the urge to splurge, using an alternative-payment mechanism is a better idea.Ulips will soon be less confusingBuyers of unit-linked insurance plans may soon find it easier to compare features and charges of these products across companies, with life insurers deciding to standardise the product.
September 10, 2008
Beware of counterfeit notesThere is no mechanism to ensure that the customer gets his money back and nor are there any guidelines or rules to protect the customer from this problem
September 09, 2008
Pay up before the auction action beginsHome loan borrowers perpetually worry about the consequences of defaulting. And whether they wish it or not, there could be situations where they are forced to do so. For instance, after the Mumbai bomb blasts on July 11 2006, a large number of affected families found themselves in deep financial trouble leading to difficulties in servicing their home loans
September 02, 2008
SIPs: A long-term investment strategyInvestors often mistake SIPs as an investment avenue rather than a mode of investing in mutual funds
September 01, 2008
Is tax-planning on your 'to do' list?Investors would do well to appreciate that tax-planning forms an integral part of their financial planningIncurring losses? Don't be scared, here's helpLosses on various financial transactions can be set off against gains, which leads to reduction in tax liability.Credit card: A few tips on balance transferBalance transfer gives you an opportunity to reduce the card burden. However, use this method judiciously.
August 29, 2008
SIPs: A long-term investment strategyInvestors should ideally invest via SIPs over at least 2-3 years.
August 26, 2008
6 rules for rebalancing your portfolioChanges in market and economic conditions keep constantly altering your investment portfolio. Accordingly, you need to periodically rebalance your portfolio so that it matches your investment goals and target asset allocations.
August 25, 2008
Should you convert credit card oustandings to personal loansConverting credit card outstandings to a personal loan reduces the interest burden. But one needs to select the right tenure.
August 22, 2008
How the currency futures will workTrading in currency futures will soon become a reality for the retail investor. With the Reserve Bank of India and the Securities and Exchange Board of India issuing trading norms, exchanges are readying themselves to launch this product in the next few weeks.
August 19, 2008
FMPs match fixed deposit returnsWith banks increasing their fixed deposit rates in the past couple of weeks, fixed maturity plans by mutual funds are also offering higher 'indicative' returns. FMPs can only indicate and not guarantee returns.5 questions investors are asking now With equity markets descending from their record highs, several investors want to know if this is the right time to invest in equities.
August 18, 2008
Paying EMIs on time, but still a defaulter!Home loan documents have an important clause, which allows banks to ask for a lumpsum payment, if the property price falls below the loan value.Beware! High returns are not always goodOutperforming the market is not a great signal for investors. A bit of caution needs to be exercised while investing in such instruments
August 13, 2008
Bear markets? Ulips are still a good bet Falling markets have not spared Ulips, but their long-term mandate still keeps them worthwhile
August 12, 2008
Are structured products good enough?Most investors believe that structured products are designed in a manner that equips them to deliver superior returnsThe whys and hows of investing in SIPsRegular investment is the key to reaching a financial goal, irrespective of the waves in the equity market
August 11, 2008
Retired? 6 great investment plansThe key lies in understanding one's needs and then forming a portfolio based on the same. Also opting for the services of a qualified and experienced financial advisor would be a prudent decision.
August 06, 2008
Having second thoughts about your ULIP?ULIPs combine the benefits of an insurance policy and a market-linked investment
July 28, 2008
Has HDFC Top 200 delivered?Investors would do well to consult their investment advisors/financial planners to determine the suitability of HTF in their portfolios.
July 24, 2008
Which is the best SIP?The SIP is simply an investment mode i.e. a means to invest in mutual funds and not an investment avenue.What falling AUMs mean for your mutual fundInvestors who are led to believe that falling net assets is a sure sign that the fund is in trouble and must therefore exit the fund at the earliest, must consider some points first.
July 21, 2008
When to exit your mutual fundGenerally, getting into a mutual fund is associated with a long-term relationship whereby, there are good times as well as bad times. However, most investors are willing to enjoy the upside, but at the slightest hint of a downside, they start crying foul.
July 18, 2008
Investing through SIPs? Choose wiselyThere is no best time to invest. Even now would not be a bad time to get started. A word of advice: be sure of the risk you can take on venturing into equity mutual funds. Apart from equity funds, maybe you could consider balanced funds as well, says personal finance expert Irfan Rupani.5 rules on how much insurance you needIf you are an earning member of your family, and there are members of your family who are financially dependant on you, you need life insurance. But how much life insurance do you need?
July 15, 2008
Has Magnum Contra delivered?A contra fund operates on the premise that investment opportunities fall in two categories a) those that are identified by most investors and therefore already form part of their portfolios and b) those that are ignored or not yet identified. Since investment opportunities under Category A are identified by most they are overbought and are therefore trading at higher valuations. The investment opportunities in Category B are what really interest the contrarian investor.
July 14, 2008
How to earn high returns on bank depositsDebt instruments of a long-term nature could help you to tide over this difficult period. Here's why.Of tax sops, inflation and home loansThe finance minister's tax giveaways are what have saved tax-payers from the impact of inflation and higher home loan rates.
July 12, 2008
Do you have a core portfolio in place?In the mutual funds segment, well-managed diversified equity funds, balanced funds and monthly income plans with proven track records could form the core portfolio. Of course, the investor's risk profile and investment objectives would play a part in determining the core. Once this core is in place, the investor can consider (if at all) allocating a smaller portion of his investible surplus in ancillary offerings like thematic/sectoral funds and global/international funds.
July 10, 2008
Are monthly income plans safe?Typically, MIPs are suited for investors with a low-moderate risk appetite. For instance, investors who wish to clock higher returns than those offered by fixed deposits or bonds and are willing to take on commensurately higher risk should consider adding MIPs to their portfolios. Also MIPs appeal to investors in higher tax brackets for their ability to deliver more competitive post-tax returns vis-à-vis avenues like fixed deposits.
June 30, 2008
5 common investment dilemmasThese dilemmas are usually a result of the lack of knowledge among investors about various investment options
June 28, 2008
Is DSP ML Balanced Fund a good buy?DMBF has succeeded in delivering an impressive showing across the risk and return parameters vis-a-vis peers.
June 26, 2008
Shaky market? Here's what you should doWhen everyone around you is losing his head, it's a good time to keep yours
June 25, 2008
All you want to know about gratuityJob-hopping may be in vogue, but those who do decide to spend dedicated years in an organisation are eligible for a free lump sum that you can put to work
June 24, 2008
5 reasons to sell your mutual fundIt is important to note that the 'right time to redeem' does not mean that there is a timing element involved over here.
June 23, 2008
Investing in stocks is NOT gamblingIt's high time that those who think stock investing is a game of luck, overcome their misconceptions and fear.
June 18, 2008
4 great tips for safe investingBuilding an investment portfolio requires the investor to put in a fair degree of thought and time
June 16, 2008
Retiring? Some quick money tipsonce you actually retire, it becomes even more important to choose the right instruments to park the accumulated funds.Banking funds are good for every portfolioBSE Bankex has delivered an annual return of 35 per cent
June 12, 2008
How to keep recovery agents at bayNo one wants a recovery agent breathing down his neck. But if you slipped up on your debt, you may have to deal with him. Here's how to make the best of a bad situation
June 11, 2008
Don't exit SIPs in a falling marketWhen the NAV falls, you are going to get more units of the fund. That means when the market turns around, you will get much more returns
June 06, 2008
Have infrastructure funds delivered?Over the past few years, when equity markets rose almost secularly, the investment scenario became rather skewed. Any fund that took on above-average risk was capable of delivering a superlative performance. As a result, some prudently managed funds ended up looking rather mediocre and some mediocre funds managed to pitch in noteworthy performances.
May 30, 2008
5 investment myths debunked Few would dispute the fact that investors today are better informed as opposed to their counterparts from previous generations. The barrage of investment advice and information from various quarters is largely responsible for this phenomenon. However, the prevalence of investment myths is something that hasn't changed over the years. And acting on a myth while getting invested, always has the same result -- an incorrect investment decision.US-64 windfall: Be age wise before investingThese tax-free bonds were issued in 2003 to bail out Unit Trust of India's flagship scheme US-64, which got into trouble because of lack of transparency in its portfolio composition and investment strategy. Now these investors will finally get their due. And if you are among those, who have still not decided on what should be done with this windfall, financial advisors say the money should be channelled in instruments depending upon your age and risk profile.
May 29, 2008
About tax-saving funds and SIPsIf your risk appetite permits investing in a tax-saving fund, now is the time to scout for one and start off an SIP.
May 28, 2008
A 4-step plan to manage your insurance portfolioInsurance has many options often confusing the individualUlips set to get costlierLife insurers have decided to pass on service tax to customers. The chief financial officers of life insurance companies met last Wednesday and have decided to pass on the service tax burden to customers, confirmed officials of various life insurance companies.
May 26, 2008
How to rent a hassle-free house With surging real estate prices ensuring a slowdown in property purchases, renting has become a viable option. Here's how to land the best deal
May 20, 2008
Becoming a crorepati is not that difficultAll you need is a well-defined investment objective and a plan to get there.
May 19, 2008
Have you declared your annual investments?During the first two months of the financial year, it's usual that your company will send a piece of document with a lot of columns that need to be filled up. Typically, this means that you have to declare the investments, which you will be making, during the current financial year.
May 16, 2008
Investors, beware of such practices!Many a time, investors get carried away by the high returns offered by a particular offering. Out of sheer ignorance most investors do not bother to question the authenticity or the transparency of the examples/illustrations that have been used to project the high returns.
May 14, 2008
How to select a financial plannerThe financial planner is someone who can help you invest across investment avenues based on your risk profile and investment objectives
May 13, 2008
FMPs turn unattractive for investorsIf you are planning to invest in Fixed Maturity Plans, think twice. Because most mutual fund managers believe that FMPs are unlikely to give higher returns as they did last year. And, this is beginning to show in their collections as well. In March 2007, FMPs had collected Rs 30,869 crore (Rs 308.69 billion). In March 2008, they attracted only Rs 21,688 crore (Rs 216.88 billion). Even in April this year, 62 schemes collected only Rs 1,126 crore
May 12, 2008
How to tackle rising interest ratesAs if any proof was needed, the spate of Cash Reserve Ratio hikes clearly underlines the Reserve Bank of India's intention to clamp down on inflation before the situation deteriorates any further.Want to buy a term plan? Well, best of luckBuying a term plan from insurance firms and finds it a tad difficult.
May 09, 2008
All you want to know about thematic fundsThe constraints of managing funds that invest in a select few sectors can often prove to be demanding for fund houses. As a result, it isn't entirely uncommon to find a sector/thematic fund changing/expanding its investment objective/style in due course. This bears testimony to the intrinsic inadequacy of a sector/thematic fund in terms of sustainability over the long-term. Nonetheless sector/thematic funds continue to be launched at regular intervals.
May 07, 2008
5 mutual fund myths debunkedIn the mutual funds segment, not everything is what it seems.Index funds fast losing the low-cost edgeIndex funds - the so-called passively-managed funds - are no longer a low-cost affair.
May 05, 2008
Mutual fund roundup: April 2008In recent times, 'inflation' has emerged as a buzz word of sorts. Simply put, inflation is a situation wherein too much money chases a limited number of goods. This leads to a fall in the value of money. Inflation is often expressed as a rise in the price level. For example, a product that costs Rs 100 now, would cost Rs 105 a year hence, assuming that prices rise at 5 per cent annually.Daily investment through mutual fundsA systematic investment plan that invests every day in the stock market can capture the movements for the investor. An analysis of its performance.Negotiating salary? 4 important tipsThere are many of us who get lured with the numbers that show in our CTC package, but when the actual take-home salary comes in our hand, it causes a lot of heartache
May 02, 2008
Mutual fund 'schemes' of a different kindOf course, not all AMCs use such marketing schemes; certain AMCs have told us that they would have preferred to keep an arm's length from these tactics, but their hand was forced by other AMCs. The bottom line is that investors/agents are regularly bombarded with rewards/incentives by AMCs and core factors like the fund's investment proposition and track record are conveniently pushed to the background.
April 29, 2008
FMPs vs FDs: Which side are you on?Fixed Maturity Plans can be termed as the mutual fund industry's answer to Fixed Deposits (FDs). Over the years, FMPs have established themselves as an option for debt fund investors (i.e. risk-averse investors). In many cases, they occupy the slot that used to belong to FDs. This is not surprising given that both the avenues cater to the same investor category.Use tax sops and buy a houseMake the Income Tax Act work for you by using its tax saving provisions to fund the purchase of not only your first house, but also of the second one.
April 28, 2008
Good portfolio=15% return per yearInvest in a basket of well managed equity funds. If your asset allocation demands that you need to be invested, go ahead and invest some money; do an sip. Be sure to select the funds best suited to you, says mutual fund expert Rahul Goel.
April 25, 2008
US64 Bonds up for redemption: What's next?Over the tenure of US64 Bonds, the investment scenario has changed radically. Mutual funds (equity funds in particular) have come of age and found greater acceptance among investors. So it should come as no surprise, if you find yourself being persuaded from all quarters to invest the redemption proceeds of US64 Bonds in equity funds. For example, investors in US64 Bonds have received letters urging them to invest the redemption proceeds in equity funds from UTI Mutual Fund.
April 19, 2008
Principal large cap: Doesn't make the gradeIt's not like we are against NFOs for the sake of it. Our view on this subject is if the NFO offers something truly unique (i.e. distinct from existing funds) and can aid the investor significantly in achieving his long-term goals, he can consider investing in the NFO. Failing this, investors are better off investing in existing mutual funds with proven track records across time frames and market phases.
April 18, 2008
4 tips to make the most of your moneyFollowing some rather elementary tips can go a long way in not only saving money, but also deriving maximum benefit from it. Perhaps it's the demanding nature of our everyday chores that make us overlook these tips. In this article, we discuss 4 tips that will help you make the most of your money.
April 15, 2008
4 tips to make the most of your moneyFollowing some rather elementary tips can go a long way in not only saving money, but also deriving maximum benefit from it. Perhaps it's the demanding nature of our everyday chores that make us overlook these tips. In this article, we discuss 4 tips that will help you make the most of your money.
April 14, 2008
4 ways to ace falling marketsBut when markets collapse like they did earlier this year, many of these 'great' investments suddenly start appearing like great mistakes. Nonetheless, there are lessons to be learnt from falling markets and we have a 4-step strategy on how you can ace falling markets.
April 11, 2008
Safe investment? Hold 5% of assets in goldHowever, for those investors, who are simply looking at earning a return inline with the markets, index funds are great.
April 10, 2008
Stocks vs mutual funds: What's better?Within the domain of investments, two options that investors regularly grapple with are stocks (i.e. direct equity investing) and mutual funds. Both have their advantages, although this note does not get in to that debate. Instead, in light of the present discussion about investing being a full-time activity, let's see how stocks and mutual funds face off against one another.
April 09, 2008
MFs: The winners and losers of MarchMid cap stocks (and subsequently mid cap funds) have been the worst hit in the recent stock market crash. Investors who added mid cap investments to their portfolios without understanding their true nature are a dismayed lot. Typically, mid caps are presented as an opportunity to make quick money; sadly, investors are rarely made aware of the higher risk involved. While there is no doubt that if identified correctly, mid caps can contribute significantly.FMPs: The devil is in the assumptionsThere is never a dearth of ideas among the AMC (asset management company) think tanks, when it comes to drawing investors towards their offerings. The AMCs usually adopt innovative ways to promote their products. Often these ideas have the desired impact and get investors all interested.
April 07, 2008
Core sector stocks: High risk, high profitThe best performing industries of the past two years have included power, engineering, construction, capital goods, telecom, etc. Broadly, these are infrastructure-related industries that have seen strong, even geometric growth. These are also, by and large, not industries that receive very high discounts globally. In India however, they have been treated as growth sectors that deservedly, receive growth industry discounts.
April 05, 2008
SIPs vs active investing: Which is better?Investors must remember that merely investing through SIPs will not deliver the results.
April 04, 2008
JM Mutual Fund: Mid caps rock the boatWhen it suits them, fund houses promote a star fund manager to draw investors. The star fund manager's track record in identifying stocks/trends is publicised extensively. NFOs (new fund offers) are launched on the premise that the star fund manager will repeat his stellar performance and give investors a good enough reason to invest in the NFO.New to mutual funds? Go for SIPsSIPs should be entered for 12 months at a time, and then renewed. You should use the renewal as an opportunity to review the portfolio. SIPs are a great way to invest in our view. if the environment is volatile, then SIPs are probably the best way for most investors, says mutual fund expert Rahul Goel.