Prajna Capital |
- Rupee crash - How does it affect you?
- High Returns are associated with High Investment Risk
- How should you plan your retirement?
| Rupee crash - How does it affect you? Posted: 03 Sep 2013 04:07 AM PDT Invest In Tax Saving Mutual Funds Online Call 0 94 8300 8300 (India) The stock markets have crashed. The rupee has plunged to new lifetime lows. Banks seem to be on the verge of increasing interest rates again. Everything seems to be uncertain. In such conditions, how should one react? 1) Rupee fall GOLD: The rupee has weakened over 17% in 2013 mainly on concerns of a wide current account deficit – the amount India owes to the world. Indians consume about 900 tons of gold each year. If possible individuals can wait before making gold purchases. This would in turn lower the import bill. EXPORTS: Analysts suggest that it is not time to give up. Investment bank Credit Suisse recently said in a report, that as long as RBI does not hike interest rates, things are still looking up for the economy, as a weak rupee and improvement in global demand will push up exports. Together with lower imports, this can help reduce deficit, and shore up the currency. HOLIDAY: Until then, however, it will be wise to roll back your foreign holiday plans, and instead travel within the country. FOREIGN EXCHANGE: A fall in rupee might be bad news for those planning to study abroad, but it is very good news for those sending money back home. In fact, some people are also borrowing money to send it back home, particularly in the Gulf. Not just that, industry body Assocham says that the falling rupee has sparked a property boom as non-resident Indians (NRIs) are looking to invest in India's realty sector. 2) Stock market crash The dampening sentiment about the rupee has dragged the markets lower too. If you are an investor in the markets, it is better to wait for the bumpy ride to pass. Some experts may also advise you to invest further, thus reducing your average asset value, and increasing scope for returns. If not an existing investor, this is the right time to enter markets using the 'Value Investing' technique. Look at this as an opportunity. Remember, companies have not turned loss-making. Many companies still hold promises of growth. They may now be available at cheap prices. If you don't want to take a lot of risk, you can opt for equity-linked insurance schemes or equity-based mutual funds. 3) Bank rate changes To curb the rupee's fall, the Reserve Bank of India has sucked out liquidity in the market by making it difficult for banks to borrow. This in turn has prompted private sector banks to increase base rate – the lowest lending rate. This implies loans will become costlier. If you already have a home loan, with a fixed rate of interest, then you have no need to worry. But if you have a floating rate, you could either shift to a public-sector lender which has not announced a rate hike or wait for the moment to pass. This also applies to those planning to apply for a loan. And the wait may not be long. History suggests, growth will soon take priority, forcing the RBI to reverse its stand and cut rates to buoy growth. Happy Investing!! We can help. Call 0 94 8300 8300 (India) Leave your comment with mail ID and we will answer them OR You can write back to us at PrajnaCapital [at] Gmail [dot] Com
--------------------------------------------- Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.
Invest Tax Saving Mutual Funds Online Tax Saving Mutual Funds Online These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)
Download Tax Saving Mutual Fund Application Forms from all AMCs Download Tax Saving Mutual Fund Applications
These Application Forms can be used for buying regular mutual funds also
Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )
------------------ Best Performing Mutual Funds
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| High Returns are associated with High Investment Risk Posted: 03 Sep 2013 01:52 AM PDT Invest In Tax Saving Mutual Funds Online Call 0 94 8300 8300 (India) THE recent crisis in one of the spot commodity exchanges in the country has once again brought into the limelight the situation that investors can face when they go out to invest.
Since there are a lot of options with respect to investing their money in specific areas and there are also a lot of expectation about returns, individuals have to be careful in making their investments otherwise there could be an additional risk element that arises in the entire process. Here is a look at some points to remember while any investment is being considered.
Return expectation:
One of the first things that the individual has to do is to ensure that the overall return expectations are muted.
One should not be looking for very high returns because in this case, the investment would also need to have risks of a similar nature. This can upset the risk-return balance and could force the investor to make choices that would not be in their best interests. A way in which they can actually go about the process is to look at their goals and consider investment options closely. This would eliminate a part of the risk that need not be present in the portfolio.
Surety:
There is no surety in the capital markets and hence, when there is a surety that is built into the return expectations then the investor has to be careful about the whole position. This is vital because a lot of people get lured by some schemes promising returns of as high as 12-14 per cent, which cannot be guaranteed. The investor has to understand that there is a risk element that comes along with the effort to get these returns, so if there is some amount that is being guaranteed, then this would not be true and there could be a higher element of risk present here.
Loss of capital:
There are situations wherein the investor would feel that the returns and the conditions that are being offered with the investment are too good to be true. It is always important to be alert about such conditions because there is a chance that the end result could be unexpected. It should not be that in the search for higher returns, the individual actually finds that their capital is under threat and that the loss of capital can actually be a real position that they will face. The whole idea is to ensure that the conditions related to the investment are known and hence, there is an idea of the entire risk that is being taken by the individual.
The best way to avoid any problems for the investor is to ensure that they have done their research well. This means looking at all the conditions related to the investment and then checking whether there is anything that seems out of order.
Happy Investing!! We can help. Call 0 94 8300 8300 (India) Leave your comment with mail ID and we will answer them OR You can write back to us at PrajnaCapital [at] Gmail [dot] Com
--------------------------------------------- Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.
Invest Tax Saving Mutual Funds Online Tax Saving Mutual Funds Online These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)
Download Tax Saving Mutual Fund Application Forms from all AMCs Download Tax Saving Mutual Fund Applications
These Application Forms can be used for buying regular mutual funds also
Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )
------------------ Best Performing Mutual Funds
| |||||||||||||||||||||||||||||||||||
| How should you plan your retirement? Posted: 02 Sep 2013 07:18 PM PDT Invest In Tax Saving Mutual Funds Online Call 0 94 8300 8300 (India)
We have seen India change over the last two decades, notably there has been a change in the lifestyle of the working population. Purchasing power has increased considerably and so have the expenses.
An improved lifestyle and better medical facilities have led to increase in the lifespan of the average Indian. In the past, a salaried person would retire at 60 and live up to the age of 67; however, now the lifespan of an individual post-retirement has increased by at least 20 years. This implies that an individual needs to have sufficient funds to be able to lead a comfortable life once he or she stops working.
If a person spends Rs 25,000/- a month today, assuming an inflation of 7%, his expenses after 25 years would increase to Rs 1,36,000/- a month. Add to this medical expenses, which increase with age and occasional expenses such as gifts it could actually exceed Rs 1,50,000 a month.
Most private sector companies do not provide pension. Additionally, the rising trend of nuclear families, increasing cost of healthcare, inflation etc. make it necessary for an individual to plan for retirement.
The objective is to have a regular flow of money after retirement that will enable one to manage the increased expenses without compromising their lifestyle.
Today, consumers have access to products which enable them to plan for their retirement. While the awareness for retirement planning is increasing, most of us delay investing for it. Starting at an early age can significantly enhance realisation of an individual's dream to achieve financial independence in the golden yeaRs
When is the right time for me to start retirement planning?
Well, in case of retirement planning it is said 'the earlier the better', however, it is never too late either. Starting early gives you the benefit of time, which coupled with the power of compounding, enables you to create a sizeable corpus that can enable an individual to take care of expenses after retirement.
Though the amount required to be invested is more if you delay your planning, the key word is 'regular investment'. It is only through regular disciplined investments that you can put aside a corpus that will generate enough income to enable you to live your life comfortably after retirement.
How do I plan for my retirement?
Retirement planning can be done in 3 simple steps:
Step 1: How do I calculate my expenses post retirement?
Take into account your current expenses and factor in aspects like inflation, increased medical costs, vacations, gifts for family etc. You will then arrive at an amount that you will require for living comfortably once you have retired. You need to keep in mind that inflation will cause your expenses to increase (even if you are spending on the same items). One can eliminate costs like children's education and rent, if you own a home.
Step 2: What will be the savings pool I need to build?
Once you have an idea of your expenses, you can accordingly establish the quantum of amount (corpus) required to be built the amount that you need for meeting the expenses. This savings pool will be created taking into consideration the inflation factor.
Step 3: How much do I need to save now?
Depending on your financial status, determine the funds which can be put aside for building the desired retirement corpus. Start saving now so that you have time on your side and can enjoy the power of compounding.
For example, if a 35 year old person wants Rs 50,000 every month for meeting expenses after retirement, he needs to start planning now. A corpus of Rs 75,00,000 will be required to generate the desired amount. For this purpose, one needs to invest Rs 10,000 every month in a retirement plan.
How should I choose a retirement plan?
Studying the features and the charge structure of a retirement plan is important. Ideally, selecting a plan which has a low charge structure will enable you to contribute more towards your investment.
A good retirement plan would:
• Provide returns that beat inflation
• Give you the flexibility to choose your investment strategy as per your risk taking ability
• Protect your capital from market fluctuations
• Inculcate a regular saving habit to ensure the corpus is built in an uninterrupted manner
Happy Investing!! We can help. Call 0 94 8300 8300 (India) Leave your comment with mail ID and we will answer them OR You can write back to us at PrajnaCapital [at] Gmail [dot] Com
--------------------------------------------- Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.
Invest Tax Saving Mutual Funds Online Tax Saving Mutual Funds Online These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)
Download Tax Saving Mutual Fund Application Forms from all AMCs Download Tax Saving Mutual Fund Applications
These Application Forms can be used for buying regular mutual funds also
Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )
------------------ Best Performing Mutual Funds
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