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

Franklin India High Growth Companies Fund

Franklin India High Growth Companies Fund Online One of the key developments that the Street is keenly waiting for is a cut in interest rates by Reserve Bank of India . With demand rising gradually, a rate cut is expected to boost earnings growth for companies. In such a situation, schemes which invest in high growth companies are best suited, especially when seen from a long-term perspective. One such scheme is Franklin India High Growth Companies Fund. Fund managers Anand Radhakrishnan, Roshi Jain and Srikesh Nair strictly follow valuation parameters when it comes to choosing stocks.Valuation parameters, such as enterprise value, price-to-earnings growth ratio, forward price-to-sales ratio and discounted earnings per share, play a critical role in selecting companies for investments. Taking into account these parameters, the fund managers invest in companies which are poised for high growth in their respective sectors. This approach has been in favour of the scheme and it has perform...

L&T Growth

Invest in Mutual Funds Online Download Mutual Fund Application Forms   L&T Growth Fund (LTGF) is open-ended diversified equity fund that invests predominantly in large caps. LTGF follows the growth style of investing and has been in existence for over 10 years now.   Type of scheme Open-ended Category Diversified equity Sub-category Large Cap Style Growth Launch date September 17, 2001 Risk-Return proposition High risk-Average return   Investment Objective and Proposition The fund's primary investment objective is "generate long term capital appreciation income through investments in equity and equity related instruments; the secondary objective is to generate some current income and distribute dividend. However, there is no assurance that the investment objective of the scheme will be achieved." Following large cap ...

Common errors that couples make while investing

Most couples plan their strategies together but make mistakes while investing. Here’s how they can avoid the common errors Make no mistake. Ignorance is no longer bliss. In fact, many couples goof-up while investing together because they are not financially transparent to each other and don’t share a common goal. KEEPING SECRETS You may find questions from your spouse as an intrusion into your privacy, but financial planners believe that sharing financial details with each other is the first step that a couple takes towards their family financial goals. If you plan to invest together, then it’s important that you should be transparent to each other on the financial front. The whole idea is that you should be able to determine how much you will set aside for investments after making all the deductions for personal and household expenses. IMBALANCED APPROACH As a couple, you may have huge assets and hold stocks, but it’s important that you should direct a part of the investments for emer...

Mutual Fund Exit Load Changes

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 Mutual Fund Exit Load Changes AMCs don't communicate about any change in exit load directly with investors, but do update on their website   The exit load applicable to your investments is the load which existed at the time when you invested in the particular fund. Any subsequent changes in the exit load will not be applicable to your investments.   However, Asset Management Companies ( AMCs ) periodically publish addendums in the newspapers, which state any change in exit loads of specific schemes managed by them. Such changes are also posted on their websites. However, a direct communication to an investor is not made, considering the costs involved in doing so. In their own interests, investors should not only track the performance of the funds they i...

Debt Mutual Fund Dividends are Taxable

DDT is deducted when a non-equity fund declares dividends. Equity and balanced fund dividends are tax-free The AMC is correct to deduct the dividend distribution tax (DDT) as it is mandated by tax laws. DDT in mutual funds is deducted every time a non-equity fund declares dividends. Equity fund and balanced fund dividends are tax-free . It is possible that you have invested in a non-equity fund for the first time or have received the dividend under a non-equity fund for the first time. That is why this is the first occasion when you have come across DDT.   The rate at which non-equity schemes deduct DDT has also gone up after the July 2014 budget. This is due to a change in calculation methodology. Earlier, if the fund has to declare a dividend of R 100, it used to make a provision for R 128.3, paying R 28.3 to the taxman and distributing the balance to the investor. This allowed the investor to bear less tax since the effective tax rate was 22.07 per ce...
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