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- Gold is safe for now
- Grow your wealth with Stocks
- Arbitrage Funds Give Tax Efficient Returns to Investors
| Posted: 05 Jul 2014 02:44 AM PDT Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Leave a missed Call on 94 8300 8300
Gold gets its safe
Gold is again seen as a safe haven, with prices up 5.5 per cent in the past few days. On Friday, at the spot market here, gold was up 2.1 per cent to close at ₹ 28,450 per 10g.
In three weeks, gold has risen 5.8 per cent here, from a low of ₹ 26,900 for 10g. Internationally, it was up 5.5 per cent from a low of $ 1,243 an ounce; silver also went up 10.9 per cent from ₹ 40,850 per kg to ₹ 45,300 a kg on Friday.
On Thursday evening, it crossed $ 1,300 an oz in the international market and now trades at $ 1,312 an oz. Much of Thursday's buying was technically driven, after prices moved higher in response to a dovish tone from the US Federal Reserve and sustained concerns over Ukraine.
However, traders and analysts have started talking of a trend change. The price pushed above $ 1,300/ oz this week as instability in Iraq raised concerns that the whole region is at risk of falling into a sectarian war, which could materially affect the supply of oil. As such, gold once more offers a safe haven refuge for investors. At the same time, Fed Chair Janet Yellen's message at the FOMC (Federal Open Market Committee) this week was supportive for gold. In the face of rising inflation, the Fed acknowledged that interest rates might rise sooner than expected but argued that the peak in the hiking cycle should be lower than previously anticipated, due to the lower long term potential growth rate of the US economy. The resultant weaker dollar, along with the Fed's apparent lack of concern about rising inflation, helped to provide further support for gold prices." For India, the premiums for physical delivery, the major factor influencing prices since the import restrictions in place for almost a year, have remained around $ 20 an oz. For, there is wide expectation that the Union government will cut the import duty on gold in the coming Union budget by two per cent. An analyst of a foreign research firm said on condition of anonymity that the lower premiums suggest the market is discounting the possibility of a duty cut. In the market here on Friday, market premiums were quoted around $ 20 an oz.
Technically, gold is in an overbought position, as the rally has been too fast. Rhona O'Connell, head of metals research and forecasts, Thomson Reuters, said: " Profit taking already appearing looks to me as if this is a short- lived burst, as there is no demand backing the price rise. So, I would look for a downward correction from here, as the market is overbought. We would expect a drift lower over the next few weeks and then some improved strength developing, perhaps in late August, and then also in September. To support her views, data of the largest exchange traded fund, United States' SPDR shows investors had sold gold in the past three days. Its holding on June 13 was 787 tonnes, marginally down to 782.6 tonnes on Thursday in the US.
Going forward, as Nic Brown puts it, gold prices will continue to depend heavily upon these two factors. If the Fed is seen to disregard additional signs of building inflationary pressures, then gold prices might have further to rally. If tensions in Iraq continue to escalate, and neighbouring countries find themselves being dragged into the conflict, then gold's safe- haven status will remain attractive for investors, especially if oil prices continue to rally. The risk to India is that higher oil prices might once again lead to a deteriorating current account balance, as well as raising inflationary pressures, both of which might be expected to weaken the rupee. This will only add to pressure on gold's price in Indian markets.
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--------------------------------------------- Invest Mutual Funds Online
Download Mutual Fund Application Forms from all AMCs Download Mutual Any Fund Application Forms ---------------------------------------------
Best Performing Mutual Funds
B. Large and Midcap Funds Invest Online
C. Mid and SmallCap Funds Invest Online
D. Small and MicroCap Funds Invest Online
E. Sector Funds Invest Online
F. Tax Saver Mutual Funds Invest Online 1. ICICI Prudential Tax Plan 2. HDFC Taxsaver
G. Gold Mutual Funds Invest Online
H. International funds Invest Online 1. Birla Sun Life International Equity Plan A 2. DSP BlackRock US Flexible Equity 3. FT India Feeder Franklin US Opportunities 4. ICICI Prudential US Bluechip Equity 5. Motilal Oswal MOSt Shares NASDAQ-100 ETF             | ||||||||
| Posted: 05 Jul 2014 01:46 AM PDT Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Leave a missed Call on 94 8300 8300
Joining the workforce opens a whole new world for an individual. A new place, people, culture, setup, income, ever-increasing expenses, etc -all become part of the change. Usually in the initial years, there are more expenses than income as one starts fulfilling his/her aspirations. If you are living with your parents and have very few dependencies, then there are more savings to start with. But for most people, savings start accruing only after two-three years into the job.
Usually in the first year of work life, it is also the first time for filing income tax returns. In such cases, understanding the tax structure and tax deductions becomes essential. More often than not, during the last quarter of the financial year (Jan-Mar) your office would require details of all investments and expenses for calculating taxes for an individual. There would be a mad rush to make last minute investments to avail of the maximum tax benefits (typically advised/guided by friends, colleagues or seniors).
Rather than making investments at the last hour, it would be beneficial to start early and invest through SIPs in case of mutual funds or plan investments well in advance. Know your I-T deductions The deductions covered under section 10 of the Income Tax Act include HRA, LTA, medical, transport and leave encashment deductions. All of the deductions under this section would be based on actual expenses incurred. The deductions under section 80C (Rs 1 lakh) give ample options for investment under different instruments like life insurance, PPF, NSC, ULIP, ELSS, tax-saving FDs, infrastructure bonds, etc.
What is important before choosing any or some of the options is to evaluate the net returns (post fees and taxes), investment limits of each instrument and know the lock-in periods for each of the available options. For example, ELSS investments have a lock-in period of three years while PPF 15 years, although some withdrawals are allowed after the sixth year. Also, in case of recurring payments like life insurance premiums, recurring FDs, etc, one should be sure of being able to make those payments every year depending on the tenor of the instrument.
There are several other deductions under section 80CCC (Pension scheme), 80CCG (RGESS), 80D (mediclaim insurance premium), 80E (education loan interest repayment), 80DD, 80EE (interest on housing loan) and 80U that one can avail of depending on each individual and the actual expenses incurred.
Being young and just into your first job, from an asset allocation perspective it is good to allocate funds to equities.
The ease of investing in various instruments and tracking the investments on a regular basis is as important as investing. Also, rather than keeping money in a savings bank account, it is advisable to park funds in liquid mutual funds.
For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call
Leave a missed Call on 94 8300 8300
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 Mutual Funds Online
Download Mutual Fund Application Forms from all AMCs Download Mutual Any Fund Application Forms ---------------------------------------------
Best Performing Mutual Funds
B. Large and Midcap Funds Invest Online
C. Mid and SmallCap Funds Invest Online
D. Small and MicroCap Funds Invest Online
E. Sector Funds Invest Online
F. Tax Saver Mutual Funds Invest Online 1. ICICI Prudential Tax Plan 2. HDFC Taxsaver
G. Gold Mutual Funds Invest Online
H. International funds Invest Online 1. Birla Sun Life International Equity Plan A 2. DSP BlackRock US Flexible Equity 3. FT India Feeder Franklin US Opportunities 4. ICICI Prudential US Bluechip Equity 5. Motilal Oswal MOSt Shares NASDAQ-100 ETF     | ||||||||
| Arbitrage Funds Give Tax Efficient Returns to Investors Posted: 04 Jul 2014 09:39 PM PDT Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Leave a missed Call on 94 8300 8300
Arbitrage Funds to Give Tax-efficient Returns to Investors
Experts advise individuals to park their money in these schemes in the current market as dividend & long-term capital gains are tax-free
Many experts recommend investing in arbitrage funds as they feel that the current market conditions are ideal for these funds. Arbitrage funds try to exploit the arbitrage opportunity or the difference between the prices of securities between different market segments. There are eight arbitrage funds currently available in the market. Edelweiss and L&T funds have just launched their new fund offers (NFOs) in June.
According to Value Research, a mutual fund tracking firm, arbitrage fund category has given an annualised return of 9.18% in the last year. Investors looking for tax efficient returns with a time frame of more than three months can consider these funds.
For example, a fund manager can buy 1000 shares of Syndicate Bank in the cash market at ` . 160, and . 161.75, earn sell the same in the futures market at ` ing a spread of `. 1.60 or 1.12%.
The fund manager has the opportunity to reverse the trades anytime during the month, when he feels the profit is maximum or till the contract expires. Assuming the trades are reversed on expiry day, after subtracting broking and STT expenses of approximately 0.33%, the trade generates a profit of 0.79%, resulting in an annualised return of 9.48%.
Dividend arbitrage opportunities arise when a company announces the dividend amount or the dividend date. Based on the past years history of dividend pay out, the fund manager takes a position, to earn a spread. If it works in his favour, he earns a higher return. However, if the dividend is delayed and goes to the next month, he earns a normal spread.
This makes arbitrage funds volatile, and they could even move down in the interim period as the NAVs are declared on a mark to market basis. While liquid funds can be bought for a time frame of even a day, investors should have a time frame of at least one to three months for arbitrage funds,. This is why most arbitrage funds have an exit loads. For example, IDFC Arbitrage Fund charges an exit load of 0.25% for 90 days, while Edelweiss Arbitrage Fund charges 0.5% for 90 days.
For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call
Leave a missed Call on 94 8300 8300
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 Mutual Funds Online
Download Mutual Fund Application Forms from all AMCs Download Mutual Any Fund Application Forms ---------------------------------------------
Best Performing Mutual Funds
B. Large and Midcap Funds Invest Online
C. Mid and SmallCap Funds Invest Online
D. Small and MicroCap Funds Invest Online
E. Sector Funds Invest Online
F. Tax Saver Mutual Funds Invest Online 1. ICICI Prudential Tax Plan 2. HDFC Taxsaver
G. Gold Mutual Funds Invest Online
H. International funds Invest Online 1. Birla Sun Life International Equity Plan A 2. DSP BlackRock US Flexible Equity 3. FT India Feeder Franklin US Opportunities 4. ICICI Prudential US Bluechip Equity 5. Motilal Oswal MOSt Shares NASDAQ-100 ETF     |
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