Skip to main content

For alert investment, look out for pointers to get indications in advance

There can always be some hedging that can be done using derivatives but it cannot be used to guarantee something

THERE have been several cases recently where investors, both small investors as well as high net worth people, have run into problems with their investments. Tackling such situations requires special efforts on the part of the investor to ensure that they are not taken for a ride. There are several pointers that will give advance indications to the investor to be alert and hence these need to be considered.

Here is a look at the situations when the investor should be alert about the various happenings.


Higher returns: One of the first things that should alert an investor about a particular investment is when there are higher returns that are promised to them. Their relationship manager with a bank might do this or it could be an intermediary who is selling some financial product. The term higher returns is a relative term and for example debt investments where there is a promised guaranteed return of 18 per cent should immediately arouse the suspicion of the investor. A similar situation would arise with respect to other forms of investment and the main point here is that the investor should question how they would get these higher returns when it is not possible to earn them under the current conditions prevalent in the market. Safety in equity: If there is someone who is promising them safety when it comes to the investments in equity then this is something that has to be watched carefully. This is like assuring something that cannot be delivered because equity by nature is subject to large amounts of risk.

There can always be some hedging that can be done using derivatives but it cannot be used to guarantee something so this is an area to watch out for. There are different things that might be promised but adequate care in analysing the situation will give rise to the position that will enable the investor to question this position before committing any funds to the area.


Legally possible: There is another angle that the investor will have to watch out for whenever anyone is making promises to them. This is the legal aspect because the first thing is that whatever is being proposed should actually be legally possible.

This is where a lot of false promises are made because there are some things that are not possible for the other party to do or what the investor is not supposed to undertake. If this is not possible and there is some action undertaken then there could be some trouble in the future as the investor would not be able to enforce the details.


In writing: Often there is a simple solution to safeguard the investors against the various promises that are being made and this is also quite easy to implement. The best part of this is that it can be used with anybody who is making the promises.


This involves taking what has been promised to them in writing, which will make the entire situation easier to enforce in the future. This solves a lot of problems that might arise at a future date also because since the details are in writing it becomes very difficult for the other party to get out from the situation.

In reality getting this done is not an easy task because the moment the investor talks about having something put down in writing them there will be a lot of wariness from the other side. It is also quite common that the investor will be told that they cannot be given this in writing.


The moment this happens the investor has to understand that something is not right and that the situation requires further action in terms of study or a closer look at the actual conditions.

 

Popular posts from this blog

NPS for Tax Saving

The NPS is a great way to save tax if you don't mind locking in your money till you retire. Till last year, the taxability of the NPS was a big issue. But last year's Budget changed the rules and made 40% of the corpus tax free. The PFRDA wants that the balance 60% to be exempt from tax as well. The emphasis is on increasing pension coverage. So, allowing EEE status (to NPS ) is our major demand (in the Budget NPS is especially useful for investors who may have exhausted the `1.5 lakh investment limit under Section 80C but want to save more.   Another way the NPS can cut tax is by rejigging the salary.If a company deposits up to 10% of the basic salary of an employee in the NPS under Section 80CCD(2d), the amount will be tax free. Turn to page 28 to see how much tax this can save. However, the take-home pay of the employee will come down. Invest Rs 1,50,000 and Save Tax upto Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds Top 10 Tax...

BHIM App

What is BHIM? BHIM stands for Bharat Interface for Money , which is an easy way of transferring money from one bank account to an other via a smartphone using the Unified Payments Interface (UPI) platform . It is an instant payments application meant for sending money as well as requesting for payments. How is it different from UPI? BHIM is no different than UPI. But in the case of BHIM, customers don't have to download mobile applications of multiple banks, instead a single BHIM app downloaded from Android Play Store is sufficient. Other than that, payments can be made through a virtual payments ID or through account number and IFS code, same as UPI. What you need to use BHIM? BHIM can be used across an droid smartphones with version 4.0 and above, also it will be made available on iPhones and Windows smartphones very soon. Further, for feature phone users they need to use the USSD feature by dial ing *99#. Why was the need for BHIM felt when UPI is already in place? With various...

Retirement planning from a long-term perspective

Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds     `HOW green was my valley'. This title comes from a movie I had watched many years ago. A little boy's journey into adulthood and the story of a Welsh valley's turn of-the-century descent from pristine paradise to despoiled coal mining.   I thought of the title because it is comparatively reflective of a person's life ­ the glorious years when he is earning and the sun down years when he is not having his regular job and, hence, his living standards comes down. The reason is a combination of things. Inflation of food items, transport, increase in health related costs in the later years of life and increase in expenses in almost all basic amenities of life. In India, the social security system is almost non-existent. In some states, wherever it is available, the scales of benefits are extremely modest...

NRI from Canada and US Invest in Mutual Funds in India

Investing in Indian mutual funds by NRIs from US and Canada As of December 2016, eight Indian fund houses were accepting investments from US/Canada-based NRIs Most of the Indian mutual fund houses have stopped accepting funds from US and Canada based NRIs due to regulatory restrictions. This is because the Foreign Account Tax Compliance Act (FATCA) makes it compulsory for all financial institutions in the world to report comprehensive details of all transactions involving US/Canada residents, (including non-resident Indians) to the US & Canada Government. Top 4 Tax Saver Mutual Funds for 2017 - 2018 Best 4 ELSS Mutual Funds to invest in India for 2017 1. DSP BlackRock Tax Saver Fund 2. Invesco India Tax Plan 3. Tata India Tax Savings Fund 4. BNP Paribas Long Term Equity Fund

HDFC FOCUSED EQUITY FUND - PLAN A NFO

HDFC FOCUSED EQUITY FUND - PLAN A NFO opens today               Best Tax Saver Mutual Funds or ELSS Mutual Funds for 2015 1. ICICI Prudential Tax Plan 2. Reliance Tax Saver (ELSS) Fund 3. HDFC TaxSaver 4. DSP BlackRock Tax Saver Fund 5. Religare Tax Plan 6. Franklin India TaxShield 7. Canara Robeco Equity Tax Saver 8. IDFC Tax Advantage (ELSS) Fund 9. Axis Tax Saver Fund 10. BNP Paribas Long Term Equity Fund You can invest Rs 1,50,000 and Save Tax under Section 80C by investing in Mutual Funds Invest in Tax Saver Mutual Funds Online - Invest Online Download Application Forms For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call --------------------------------------------- Leave your comment with mail ID and we will answer them OR You can write to us at PrajnaCapital [at] Gmail [dot] Com OR Leave a missed Call on 94 8300 8300 --------------------------------------------- Invest Mutual Funds Online Invest Any Mutual Fund Online Download Mutual ...
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