Skip to main content

Investment Planning – Safe, Sound and Secure

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 rupee-dollar exchange rate, investing in tech companies is a little risky. While the sub-prime crisis in the US is not directly related to performance of the Indian tech companies.

The other sector, according to analysts, where you should avoid exposure in the capital markets is realty. With execution costs of projects escalating, analysts believe that the capital intensive realty market needs more money and capital is costly at the moment. There is even a possibility of small builders folding up, which can further hurt sentiments in the sector. While this may be the right time to pick up some good value stocks, you should keep away from penny and small-cap stocks.

REAL ESTATE

The dream to own your own house is always alluring. More so now, given the slight dip in realty prices. But financial experts believe that the right time is yet to come. As a result of the liquidity crunch, further devaluation is expected in six months. Moreover, with interest rates headed north in the medium term, distress sales are expected to happen very soon. If you can be a little patient with your decision and wait for a while, the property that you are eyeing today, may get more affordable.

CRUDE OIL

Given the volatility and politics around crude prices, it is advisable that you refrain from speculative trade in it in the futures market. It is a very high risk game in today’s scenario. And with crude oil prices cracking up by almost 10%, it looks that they are headed for an intermediate downtrend. This could mean that you may end up dispensing large sums of money if you had built short positions in the futures market.

FIXED DEPOSITS

Fixed deposits (FDs) is a preferred investment vehicle for investors, especially in times when gloom descends over the equity markets. Experts, however, feel otherwise. Instead of parking funds in an FD, it is better for you to invest in Fixed Maturity Plans (FMPs), which not only guarantee fixed returns but also are highly tax efficient in comparison to fixed deposits Majority of the asset management companies (AMCs) in India offer such plans in the market.

With inflation loooking up and FD returns chargeable to tax when disbursed, forget about beating inflation your real returns are negative. This means that funds are actually eroding. Another option, feel analysts, is invest your earnings in floating rate funds. These funds are currently offering 7% returns. The returns, however, are likely to go up as they are inversely related to the stock market. Also, it is easier to withdraw money from a floating rate fund and switch to another alternative if interest rates come down.

GOLD

Gold may appear as an attractive investment bet in the current market conditions, but analysts have a different opinion. They caution that you should avoid adding the yellow metal to your portfolio. Reason: gold is positively correlated to crude oil prices, which means that any fall in crude oil prices will result in gold prices also heading south. Conservative investors, however, can still invest in Gold Exchange Traded Funds (ETFs). With interest rates going up, investing in Gold ETFs over a longer period is a more sensible decision than investing in gold itself.

Popular posts from this blog

Am you Required to E-file Tax Return?

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   Am I Required to 'E-file' My Return? Yes, under the law you are required to e-file your return if your income for the year is Rs. 500,000 or more. Even if you are not required to e-file your return, it is advisable to do so for the following benefits: i) E-filing is environment friendly. ii) E-filing ensures certain validations before the return is filed. Therefore, e-returns are more accurate than the paper returns. iii) E-returns are processed faster than the paper returns. iv) E-filing can be done from the comfort of home/office and you do not have to stand in queue to e-file. v) E-returns can be accessed anytime from the tax department's e-filing portal. For further information contact Prajna Capit...

National Savings Certificate

National Savings Certificate Here's everything you need to know about the 5-year savings scheme offered by the Government This is a 5-year small savings scheme of the government. From 1 July 2016, a National Savings Certificate (NSC) can be held in the electronic mode too. Physical pre-printed NSC certificates have been discontinued and replaced with Public Provident Fund-like passbooks. What's on offer The minimum amount you can invest in them is Rs100 and there is no upper limit. Under this scheme, all deposits up to Rs1.5 lakh qualify for deduction under section 80C of the Income-tax Act, 1961. The interest earned is taxable. You can invest in multiples of Rs 100. These certificates can be owned individually, jointly and also on behalf of minors. The interest rates for all small savings schemes are released on a quarterly basis. The effective rate for NSC from 1 October to 31 December is 8%. The interest is calculated on an annual compounding basis and is given along w...

Mutual Fund Review: HDFC Index Sensex Plus

  In terms of size, HDFC Index Sensex Plus may be one of the smallest offerings from the HDFC stable. But that has not dampened its show, which has beaten the Sensex by a mile in overall returns   HDFC Index Sensex Plus is a passively managed diversified equity scheme with Sensex as its benchmark index. The fund also invests a small proportion of its equity portfolio in non-Sensex scrips. The scheme cannot boast of an impressive size and is one of the smallest in the HDFC basket with assets under management (AUM) of less than 60 crore. PERFORMANCE: Being passively managed and portfolio aligned to that of the benchmark, the performance of the index fund is expected to follow that of the benchmark and in this respect, it has not disappointed investors. Since its launch in July 2002, the fund has outperformed Sensex in overall returns by good margins.    While every 1,000 invested in HDFC Index Sensex Plus in July 2002 is worth 6,130 now, a similar amount invested in Sensex then wo...

Different types of Mutual Funds

You may not be comfortable investing in the stock market. It might not seem like your cup of tea. But you can start by investing in Mutual Funds. Many first-time investors invest in Mutual Funds. This is because they do not know how to invest in individual securities. Basic information on Mutual Funds People invest their money in stocks, bonds, and other securities through Mutual Funds. Each Fund has different schemes with specific objectives. Professional Fund Managers look after these schemes. Your Fund Manager could help you invest in a scheme that suits your financial goal. Functioning of Mutual Funds You could make money through Mutual Funds in different ways. A single Mutual Fund could hold many different stocks, bonds, and debentures. This minimizes the risk by spreading out your investment. You could earn dividends from stocks and interest from bonds. You could also earn capital by selling securities when their price increases. Usually, you could choose to sell your share any t...

IDFC - Long term infrastructure bonds - Tranche 2

IDFC - Long term infrastructure bonds What are infrastructure bonds? In 2010, the government introduced a new section 80CCF under the Income Tax Act, 1961 (" Income Tax Act ") to provide for income tax deductions for subscription to long-term infrastructure bonds and pursuant to that the Central Board of Direct Taxes passed Notification No. 48/2010/F.No.149/84/2010-SO(TPL) dated July 9, 2010. These long term infrastructure bonds offer an additional window of tax deduction of investments up to Rs. 20,000 for the financial year 2010-11. This deduction is over and above the Rs 1 lakh deduction available under sections 80C, 80CCC and 80CCD read with section 80CCE of the Income Tax Act. Infrastructure bonds help in intermediating the retail investor's savings into infrastructure sector directly. Long term infrastructure Bonds by IDFC IDFC issued an earlier tranche of these long term infrastructure bonds on November 12, 2010. This is the second public issue of long-te...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now