Prajna Capital - An Investment Guide

Free. The word evokes a different kind of feeling than what it actually means in today’s world. Make no mistake about it, absolutely nothing is free today. Even things that are said to be free have a hidden cost to them. Wherever you read that four-letter word, the omnipresent ‘conditions apply’ will be there as well. You always pay for what you get, one way or another. A price for every product and a charge for every service. A doctor charges you for his services, a consultant charges you for telling you what you probably already know and in the same vein, a mutual fund charges you for managing your money. The Expense Ratio is also known as Annual Recurring Expenses . This basket of charges comprises the fund management fee, agent commission, registrar fees and the selling and promotion expenses. The expense ratio is disclosed every March and September and is expressed as a percentage of the fund’s average weekly net assets. A fund’s expense ratio states how much you pay a fund in per...

  An Individual can claim a deduction up to Rs 1 lakh U/S 80C of the Income-Tax Act, 1961 ('Act') by incurring a certain expenditure or making specified investments. Few of the popular schemes which are generally availed of by the individuals, inter-alia, include the following: Expenditure-Related Deductions Broadly, the expenditure-related deductions include tuition fees and home loan payments.    Tuition fees for full-time education in any Indian university, college, school, and educational institution, for any two children is eligible for deduction. However, development fees or donations are not considered.    The principal amount re-paid against a home loan to banks or certain category of employers is also eligible for deduction. Stamp duty, registration fees and other expenses incurred for the purpose of acquisition of such a house property are also eligible for deduction.    It should, however, be noted that the cost of renovation/house repairs after the completio...

During the last few weeks of the year, accounts departments of companies start asking employees to give documents to back up their section 80C declaration made at the beginning of the financial year. And for ones, who have not completed their investment, this could be the time to invest quickly. Otherwise, the portion that has not been invested will be deducted from the salary in the next three months. No wonder, this is also the time when mutual fund houses and distributors aggressively push equity-linked savings schemes ( ELSS ) because one gets tax relief under section 80C for investing in these schemes. In fact, some fund houses pay higher upfront fees to distributors for promoting ELSS. Returns from these schemes have been at par with the Sensex returns in the last three-five years. According to data from Value Research, a mutual fund rating agency, these schemes have returned almost 83 per cent in the last one year, as against 76 per cent by the Sensex. In the last three an...

Wish you and your family a very happy, successful and prosperous new year ahead 2010. Have a wonderful weekend.

  Reliance Asset Management Company has filed an offer document with the market regulator, the Securities and Exchange Board of India ( SEBI ), for the launch of a new fund Reliance Liquid Exchange Traded Fund ( ETF ).    ETFs can be bought or sold like any other stock on the National Stock Exchange ( NSE ) through terminals spread across the country. After the closure of the new fund offer ( NFO ), if and when it is cleared, the Units of the Scheme will be listed on the Capital Market Segment of the National Stock Exchange of India Ltd ( NSE ) or any other stock exchange.   After Liquid Benchmark ETF, this is the second such fund in the entire industry which might see the light of the day, if the market regulator approves it. It is an open ended exchange listed fund, which aims to provide high liquidity to the investors.      The fund would invest short term government securities, money market instruments and short term debt securities. It will have daily dividends, but a c...

    ICICI Prudential Mutual Fund has launched the Banking & Public Sector Undertakings (PSU) Debt Fund. This is the only open-ended debt fund in the fund house which would focus on these two segments of the market.   The fund would invest in debt, money market instruments and securities issued by banks or PSUs. The fund can also invest in fixed income securities issued by the government, corporates and multilateral agencies.   The fund would allocate up to 100 per cent of its asset in debt and money market instruments (including securities issued by banks and PSUs) while for debt entities, other than banks and PSUs, it would allocate up to 35 per cent.    The fund would be managed by Chaitanya Pande who has a 14-year industry experience and holds a PGDM from IMI, Delhi, and a B.Sc degree from St Stephen's College, Delhi.     The fund has both growth and dividend options. There is no exit load applicable. The minimum application amount is Rs 5,000 while minimum add...

An Art Meets Commerce, a New York marketing firm, has struck up a never-ending conversation with fans. The company uses Facebook as a crucial part of its publicity campaigns for theatrical productions. Its Facebook page for the show " Rock of Ages, " for example, has more than 13,000 fans. Staff members constantly update the page with new photos, videos and quotes from the cast. They ' ve also learned what not to do: Once they posted a video of Paris Hilton plugging the show and got negative feedback from fans who professed to be sick of her. But it ' s not just about marketing — or, at least, it ' s not just about selling. " You end up moving away from being an Internet marketer and go into almost customer service, " said Jim Glaub, creative director at the agency. " A lot of times people use Facebook to ask questions: What ' s the student rush? How long is the show? Where ' s parking? You have to answer. " Some basic rules: Bu...

What does the retail investor do in choppy markets being seen now? YES, the current markets are in a bearish phase on account of several global and domestic factors. High crude prices are, however, the single biggest factor for the meltdown. It is hard to predict when the markets will stabilise. Investors who invested in equity markets at the peak time are anxious to know how they can protect their investments. Also, there are several investors who are interested in entering the markets and are keen to understand what should be their strategy. Firstly, let us understand that the current behaviour of the stock markets is not unprecedented. If you go back in history, both domestically and globally, the stock markets have moved in various directions over a short period of time. So do not panic. Let us assume that there are two investors: investor A and investor B. Investor A invested in equity mutual funds at the peak of the markets in January 2008 and has now witnessed erosion of ...

Low interest rates in the initial period of the home loan do not necessarily mean low interest outflow. In view of the prevailing home loan schemes   BAFFLED by the mumbo-jumbo of home loans when you are already lost on the choice of home? Don't want to be trapped by the gobbledygook in agreements? We ran through a host of offers made by mortgage lenders in the last few weeks, mainly from the outgo point of view over the lifetime of the loan. And it showed, the best deal for you, is from the nation's biggest, State Bank of India.   Most of the schemes discussed below offer home loans at fixed rate in initial years and switch to floating interest rate in later years, which matters the most for total interest outflow. The schemes differ from each other in terms of the spread once it become floating, prepayment charges, and in terms of other qualitative factors like the speed of processing the application, documentation requirements and time taken to disburse funds. But what...

BSE has announced the introduction of AMFI Mutual Fund (advisors) certification module through the BSE Training Institute, to enable members and sub-brokers to build a cadre of MF advisors and disseminate knowledge about working of Mutual Fund to investors

BSE would allow brokers to place orders through mobile phones in its mutual funds transaction platform in the next 15 days. The exchange hopes the facility would enhance the accessibility of traders to the BSE STAR MF. The exchange is also planning to extend the equity back-office software, Spark, to the brokers transacting in the STAR MF platform.

Some conditions that enable a mortgagee to enforce this right to recover his dues A right of foreclosure is a right available to a mortgagee to recover his outstanding money. This right of foreclosure can be exercised by a mortgagee only if certain conditions are met. Here are some conditions to exercise this right: The money should have become due for payment There should be no condition in the mortgage deed waiving the right The mortgagor should not have a decree of redemption of the mortgaged property The remedy depends upon the nature of mortgage. In case of a simple mortgage, the right of foreclosure is not available. The remedy is either to proceed against the mortgagor personally or for sale of the mortgaged property. This is also the same in case of an usufructuary mortgage. In this case, the mortgagee is in possession of the property and continuous to be in possession until the debt is repaid in full. The relevant provisions are contained under Section 67 of the Transfe...

  Plan Aims To Fetch You Maximum Returns Even Amidst Fluctuations If You're Ready To Hang In There ICICI Prudential Life Insurance has launched a ULIP plan called ICICI Pru LifeTime Maxima, which follows two different portfolio strategies — fixed and trigger portfolio. The first strategy provides an option for you to choose from any of the seven funds — Opportunities Fund, Blue-chip Fund, Multi-Cap Growth Fund, Multi-Cap Balanced Fund, Income Fund, Money Market Fund and Return Guarantee Fund. But the company bets on the trigger portfolio strategy to generate good returns in volatile market conditions. HOW DOES THE TRIGGER PORTFOLIO STRATEGY WORK? Initially, your investments will be distributed between two funds: Multi-Cap Growth Fund and Income Fund — in a 75:25 ratio. The company will rebalance the portfolio when the fund allocation gets altered due to market movements based on a trigger event. The insurer defines a trigger event as a 15% upward or downward movement in NAV o...

  Balanced Funds, usually, fail to incite interest on the dalal street. The recent performance of HDFC Prudence, however, shows that you need not be reckless to rake in the moolah   IT IS a hybrid (balanced) fund. Yet, its returns, particularly in the recent past, have surpassed even those of the broader market indices – the Sensex and the Nifty. Launched in Jan '94, HDFC Prudence is one of the oldest equity-oriented hybrid funds of the country today. Its humungous asset size of over Rs 3,200 crore also makes it the largest and the most popular scheme in the category of balanced funds. PERFORMANCE: It is probably unfair to compare the performance of a hybrid fund with a core equity index. However, despite its blend of both debt and equity, HDFC Prudence has displayed a great ability to beat the equity market returns handsomely in its over a decade long performance history. Thus, despite being benchmarked to Crisil Balanced index, the fund's performance, so far, has inevit...

OFTEN, LEADERS ARE NOT sure how to balance soft leadership skills such as trust and communication with the more hard line leadership approaches (read: retrenchments, realignments, cost cutting) during tough times. Research indicates that the greater the stress an organiation is facing, the more important a leader’s soft-skills, especially communication skills become. Research has found that there are four important characteristics associated with leaders of the subcontinent, who were most successful in leading their organizations through transitions: Make Relationships a Priority: Especially in the subcontinent, companies are about people and relationships. Leaders cannot afford to become cynical or negative during times of turmoil. They cannot remain insensitive to employee needs or be seen as inaccessible. They are expected to be caring and empathetic, giving importance to relationships even during tough times. Maintain Constant Communication: During tough times, people are more vul...

The stock market is on a down hilll trek & the sentiment is gloomy. You may be looking for better options, but there are some segments you should steer clear from at the moment AVOIDING bad investments is as important as finding good ones. Post market crash, portfolio’s worth toady is not even a third of investments. With some genuine advise, people could have saved from investing at a wrong time. To make sure that you don’t fall into the same trap, we prepare a list of five segments you should refrain from investing in right now. REALTY & TECH STOCKS Stock market is a place where people with experience get money and people with money get experience. Words of wisdom, undoubtedly. But what should be your approach when it comes to where not to invest on Dalal Street? If analysts are to be believed, realty and technology sector stocks should be treated with extreme caution. The key to investing in the stock market is to avoid relying on hearsay. Given the volatility in the rupe...

Exchange Traded funds (ETFs) have advantages over other mutual fund types Exchange Traded funds ( ETFs ) are a major class of mutual funds. Though not as popular among retail investors, they have numerous advantages over the straitjacket mutual fund.The genesis of this category dates back to 1989 when the first index type ETF was traded on the American Stock Exchange. The distinguishing factor that these funds have vis-à-vis ordinary mutual funds is the manner of purchases and redemptions. This is because the units of these funds are listed on the stock exchange just like the stocks of a company. An ETF can be bought or sold over the exchange through a broker on a daily basis during trading hours. In India, ETFs where first launched by Benchmark Asset Management Company, which launched the Nifty Benchmark Exchange Traded Scheme ( Nifty BeES ) based on S&P CNX Nifty Index.In the domestic market, ETFs have not yet captured investors’ favour, which is in stark contrast to more devel...

This explains how some popular insurance schemes work to help you choose one Anyone above 18 years of age, who is eligible to enter into a contract, can go for an insurance policy. Subject to certain conditions, a policy can be taken on the life of a spouse or child too. Here are some popular policies: 1) Whole life policy These are the simplest of policies. You pay a fixed premium every year based on your age and other factors. The insured earns interest on the policy's cash value as the years roll by and his beneficiaries get a fixed benefit after he dies. The premium is the same even in later years as it was when the policy was taken. Whole life insurance policies are valuable as they provide long-term cover and accumulate cash values that can be used for emergencies or to meet specific objectives. The surrender value gives you an extra source of retirement money if you need it. 2) Endowment policy An endowment life insurance policy is designed primarily to provide a benefi...

1) Comment on Blogs - Look for large traffic Blogs in your niche, visit them and leave your comments on their blogs posts. You may use blog search engine like www.blogsearchengine.com, www.google.com/blogsearch and www.searchengineblog.com to find blogs in your niche. 2) Submit Articles - Write articles that are related to your blog and submit them to popular article directories such as ezinearticles.com, Isnare.com, Articledashboard.com, Articlealley.com and goarticle.com. Quality articles may drive you a lot of free targeted traffic. 3) Participate in Community Forums - Use google to search for forums that are related to your blog. Look for forums that has over 10,000 members and read the rules of the forums to see whether you can promote your blogs and websites in your signature. Join forums that allow you to add a link to your blog in the signature and start participating in discussion. You can ask questions, answer other members questions and post your articles, ideas and thought ...

MAX Gain, Bajaj Allianz Life's new ULIP, promises a fund value at maturity that takes into account the highest NAV (monitored on a daily basis) to the policyholder, that is, the number of units multiplied by the highest NAV recorded during the policy's term. Birla Sun Life's plan with a similar feature (guaranteed highest daily NAV during seven years between September 15, 2009 and December 15, 2016) closed on December 15. The minimum premium to be paid under Max Gain is Rs 25,000 per year with an option to increase or decrease the regular premium, while the sum assured is five times the annual premium. The premium allocation rate will be 100% from the policy's third year onwards and there are no surrender charges. The plan also offers to pay 175-350% (depending on the premium amount paid) of the total allocation charges deducted as guaranteed addition at maturity.

Joint ownership is when two or more persons hold title to the same property. In case of coparcenary, the members have a common and an equal interest in the ancestral property. Any co-owner can transfer his share in the property to an outsider or another co-owner, and the transferee steps into the shoes of the co-owner. The transferee becomes the co-owner. A co-owner is entitled to three essentials of ownership - right to possession, right to use and right to dispose off the property. Therefore, if a co-owner is deprived of his property, he has a right to be put back in possession. Such a co-owner will have an interest in every portion of the property and has a right irrespective of his quantity of share, to be in possession jointly with others. This is also called joint-ownership. Co-ownership can be changed to sole ownership through partition. The term co-owner is wide enough to include all kinds of ownerships such as joint tenancy, tenancy in common, coparcenary, membership ...

Add-on offers or riders are best options for customising your present and future insurance needs. But you have to be careful while opting for one. This article provides a pocket guide for taking the right cover In a bid to stand out above the pack in the face of increased competition, insurance companies have of late started offering add-ons to customise their products and make them more powerful. These add-ons — or riders, as they are called — are a special policy provision or group of provisions that can be added to a policy to supplement the cover provided. They allow you to increase your insurance coverage or limit the coverage set down by the policy. Riders can also be blended according to your present and future insurance needs. Riders are optional additional benefits that you can opt for with your insurance plan for a nominal extra amount. One important thing to remember, however, is that riders are always attached to the basic policy which a person takes. They cannot be bo...

Baroda Pioneer has announced the launch of Baroda Pioneer PSU Bond Fund which is an open ended Debt Scheme. The portfolio of the fund would predominantly consist of PSU bonds and government securities of varying yields and maturities. The portfolio will track interest rate movements with low credit risk due to its exposure to PSU Bonds.  The fund will invest upto 65 per cent of the assets in debt or debt related instruments issued by PSUs and public financial institutions. The remaining balance 35 per cent would be invested in treasury bills or government securities. Liquidity would be managed through investments in PSU Bank CDs. The fund offers both growth and dividend options. The New Fund Offer (NFO) would be available from December 7- December 21, 2009. The exit load applicable would be 0.50 per cent if redeemed on or before 90 days. The minimum investment amount would be Rs 5,000. The fund has been benchmarked against CRISIL Bond Fund Index. 

While some powers are revocable, others are not A power of attorney ( POA ) is a document of agency where the principal appoints an agent to do and execute certain deeds on his behalf. A POA is any instrument empowering a person to act for and in the name of the person executing it. It includes an instrument by which a person is authorised to appear on behalf of any party in the proceedings before any authority. The Indian Stamps Act defines POA as 'any instrument empowering any specified person to act for and in the name of the person executing it'. Revocation of a POA is as important as delegation of the power itself. Otherwise, it might be to the prejudice of the parties themselves. In deciding whether the agency can be revoked or not, two conflicting interests are to be reconciled and a suitable middle way is to be formed so that none of the parties suffer unjustly. The interests of the person who has delegated the power should be in conflict with those of the person ...

Senior citizens and pensioners need not worry about the recent fall in interest rates on bank term deposits. Instead, one can invest in corporate debt instruments that carry coupon rates that are 3-4 per cent above bank rates. Many companies are expected to bring in debt issues, largely non-convertible debentures ( NCDs ), to raise around Rs 20,000 crore from the market within the next six months. Companies like L&T Finance, Shriram Transport Finance, Tech Mahindra and Tata Capital recently raised funds over Rs 3,300 crore via NCDs. Companies preparing to launch debt issues include Dewan Housing Finance, Gujarat Industrial Finance Tech-City, IIFCL, Jaiprakash Associates and Srei Infrastructure. Suresh Sadagopan, certified financial planner, Ladder 7 Financial Advisory, Mumbai, says: "Now is a good time to invest in NCDs as bank fixed deposit ( FD ) rates have seen a decline. As NCDs offer 3 per cent higher interest than FDs, they are a good option. However, one must look for a...

Dividend-FD combo give you handsome return INVESTORS can earn as high a return as 20% per annum by simply investing in shares for dividend and then re-investing those dividends in fixed deposit to earn interest. We made a portfolio of six stocks, which pay higher dividends than the average and then estimated the return —which an investor would have earned if he had invested in these stocks on April 1, 2003, and held on to his investments till April 1, 2009. The reason why we chose April 1, 2003, as the starting point is that the Bull Run was just about to start then and therefore, prices were very low, resulting in high-dividend yield. And today, we have come full circle as there are so many stocks which are beaten to such an extent that the dividend yield is as high as 10%, in some cases even more. The six stocks, which we have chosen are Tata Steel, Varun Shipping, HCL Infosystems, Chennai Petroleum Corp, Graphite India and Allahabad Bank. Assuming that an investor had bought ...