Historically, gold has been the perfect hedge for inflation. This is based on data from the year 1800 AD. But in terms of absolute returns gold has fared rather poorly giving returns at only 0.8% above inflation. Real estate and shares beat gold squarely on the capital appreciation front. Real estate and shares have given [...]
A look at the past 15-20 years record, it is seen that Gold is a hedge against inflation. Over the last 20 years, the average return from Gold has been around 7%. So, if the past trend continues, one could expect around say 6-9% returns from gold in the long-term.
Another way to use this rule of thumb is to guess the rate of return that you must get for an investment to double within a particular period. Say, Mr. Ramesh wants to buy a house after six years for a budget of Rs. 30 lakhs. He has Rs. 15 lakhs [...]
What is the volatility of the fund? Remember in most instances funds with high returns tend to be more volatile. E.g. funds with mid-cap exposure and sector funds tend to be more volatile, but also offer higher returns. Also some fund managers tend to churn the portfolio in order to give higher returns, thus making [...]
Don’t let the money that you save lie around in your bank account. Keep a certain amount for an emergency and invest the rest in the best options for investment. You have to educate yourself about the options available. Try to increase your investments steadily every month.
Liquid funds are a very popular choice if the investment is for a small duration. These funds invest in very short-term securities such as commercial papers, short-term treasury papers and bank deposits. They are not affected by interest rates fluctuations. So, if Mr A holds on till the maturity of the product, then he [...]
If securities are sold on the exchange within a period of one year of purchase, it is short-term in nature. Short-term capital gains are taxed at 15%. Short-term capital loss can be set off against short-term capital gain & long-term capital gains.
If you are thinking about putting all your eggs in one basket, better not do that because Section 80C has a limit of Rs. 1 L. That is, if you have made investments of Rs. 1.50 L in the investment instruments mentioned above, only Rs. 1, 00,000 out of it would be eligible for deduction [...]
Having discipline is extremely important. You have to have discipline in the way one spends and controlling one’s expenditures. It is the key to reduce liabilities and debts and save more. As per a famous trading and investing legend- One must not spend time looking for the Holy Grail of investments or trading systems. It [...]
Liquid funds invest in money market instruments. Money market is a market for short term borrowing and lending. This market deals with debt instruments such as certificate of deposits, commercial paper and treasury bills.
Most investors tend to think that an ETF is the same as an index fund. While an index fund also mirrors returns of a particular index, ETFs have an edge over index funds because of the benefits it provides.
Blue chip stocks are stocks of companies which are well-established companies and have stable earnings and no extensive liabilities. They can be income or growth stocks. They have a track record of paying regular dividends. They are relative safe and stability.
The recession taught Indians value of money. So how to manage/use the salary hikes in an effective way so that it brings a fruitful return? Is it the time to splurge or go slow? Or is it prudent to continue with the austerity measures that one discovered during the lean time?
Now, is it really worthy [...]
If one if not a person who can extensively devote hours to stocks, he should try to stick to the blue chips. These are companies that have been in existence for a long time, have posted positive numbers every time, mutual funds hold investments in them and are market leaders. These stocks may seem to [...]
The 40% scheme allows for purchase of equity, preference shares and convertible debentures not exceeding 51% of the face value of each issue. Repatriation of up to 40% of the new issue is allowed. Under this scheme, NRIs can invest in new projects or in expansion and diversification projects of existing [...]
Investing directly in art has its own drawbacks. For one, these artworks need to be protected against theft and damage. Second, you need to have large sums of money to buy these works. Third, they occupy a lot of space. So for those looking to invest in art but have money and space constraints, there [...]
P/E ratio (Price Earnings Ratio) shows what the market thinks about the earnings potential and future business forecast of a company. Companies with high P/E ratios are the darlings of the investors and thus enjoy a higher market rating. In order to use the P/E ratio properly, take into account the future earnings and growth [...]
Liquidity can also affect arbitrage funds. As futures are traded in lots, one lot will have numerous shares of a company. A fund manager may not be able to buy the required number of shares at a predetermined price. E.g. [...]
Asset allocation, as explained above, is a process wherein an investor takes a decision of how his portfolio will be diversified. Diversification is an important goal for an investor. Putting all the savings in equity market might not be a safe investment decision while investing in fixed income securities is also not advisable looking at [...]
Real estate appreciates in capital - particularly the land. The building generally depreciates. Recently the National Housing Bank launched the Residex, an index which will track the capital appreciation of real estate house properties. The data is updated for 3 years now. Over a period of time, the index can be used as a good [...]
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