Cover Story

7 investment truths
Everybody says, mutual funds are the best way to de-risk your portfolio. But the Money Today-Value Research list of India's Most Wanted Stocks over the past two years proves that this is a widely accepted fable. Here is the new set of investment truisms.

Following in the market's footsteps
People believe that fund managers will always be able to outperform the benchmark because the Indian market is inefficient and the managers have better information. but in practice, this theory falls flat.
Mirror the index, not the fund
If you do not want to be disappointed when the bull market resumes, it is best to switch to an index fund, which will ensure that you get market returns for a minuscule fee.
Hanging by a threat
The noose around your finances is tightening. It may seem impossible to do so, but there are ways to loosen it. Find out how.Living on a shoestringThe unthinking borrower7 investment truths
My experiments with a job loss
If you have lost your job, this is not the time to be choosy. Sitting at home, waiting for a better job, increases frustration and depletes savings. If you can’t find another job, seriously consider self-employment.
Living on a shoestring
Rising costs and expenses and diminishing returns are forcing families to live on tight budgets and come up with innovative ways to save.
The unthinking borrower
Easy loans, free credit cards and a rising standard of living have resulted in a debt trap for the middle class. Can it escape unscathed?
Time to adapt or perish
Small businesses can’t solve all their problems. But in order to survive, they should ensure that they are not caught off-guard.
Can you bank on funds?
No investment is risk-free. If the entire stock market declines in value, the value of mutual funds goes down too.
Indias most wanted stocks
The market is back to the January 2006 level. Value Research and Money Today look at how India’s most wanted stocks fared in this journey.

2008-11-27

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Your Wallet

Your wallet: Insurance and loans

Health insurance is a tool for cutting risk and making lives simpler. The premium depends on your age, the cover and even your city in some cases.

Wedding wows

Make the best day of your life better by being different. Here are some options that will up the classy quotient at your wedding without cramping your budget.

Stocks

Zandu performs well

29.4 per cent is the return from Zandu Pharmaceutical stock since Jan 2008. The Sensex during the same period lost 52%.

Stocks with lifebuoys

Stocks with high dividend yields tend to be less volatile. But there are other things to look out for before you invest in such shares.

Purging losers, adding winners

As markets show signs of bottoming out, Dipen Sheth goes shopping for value picks and weeds out three spectacular duds.

Expert View

The current collapse in the stock market is because of a liquidity squeeze. it’s a case of too little money chasing too many assets. Such markets throw up chances to buy stocks at prices that are way below their real values.

Small is risky, but can be profitable

Stocks of small companies are not for people who are averse to risk. But if you are willing to put a small part of your portfolio at risk for a potential payoff, consider them seriously.

Time to get back to basics

Check if your favourite stock can withstand shocks such as a couple of bad quarters (look for low overheads), fund crunch (check the dividend yield), interest rate hikes (tolerate zero-to-low debt) and margin squeeze.

Travel

Serviced with a smile

Serviced apartment is no longer a foreign concept catering to expats and business travellers. Rivalling, and often, trouncing hotels in convenience, flexibility and budgeting, the new hospitality havens sprouting across Indian cities can offer more than you bargained for.

Upfront

Raising the cap

The Indian Cabinet has finally given the nod to the proposal to hike the foreign direct investment cap in insurance from 26% to 49%.

BASICS

Are you fit for equity investing?

Stock investing is not for everyone. You should enter only if you can withstand the gut-wrenching feeling that comes with the ups and downs in the markets. Take this short quiz to find out if you are mentally suited to dabbling in equities.

E2E

Dress sense

Meena Bindra's passion for clothes and perseverance have seen brand Biba grow to a Rs 87-crore entity.

Now and Then

High rise

Real estate prices are witnessing a correction but there has been no let up in the high cost of construction. The prices of almost all building materials have risen sharply in the past few years.

Books

Demystify the math of investing

If you are plagued by the twin bugaboos of financial formulas and cryptic concepts, turn to this book. Devoid of jargon, yet covering most analytical techniques, it will help you monitor your investments more adeptly, says Sameer Bhardwaj.

Technology

007 wishlist

Drop-dead gorgeous can as easily describe James Bond as his car or watch. Not all the gizmos are available in India yet, but with online shopping and shipping, you can still lay your hands on them.

Banking

Countering the fakes

According to RBI, fake currency worth Rs 2.31 crore was detected in 2006-7, and the figure went up to Rs 5.49 crore in 2007-8. The jump has been registered mainly across Rs 100 and Rs 500 denominations.

Portfolio Doctor

Jekyll and Hyde investing

Noorul Hasan follows a disciplined asset allocation and chooses his mutual funds with utmost care. But he throws caution to the winds when it comes to stock-picking.

Tax

What to do if refund cheque has wrong bank account number?

If the income-tax office has provided incorrect account details, you can resolve the matter by visiting ITO with the copies of the acknowledgement of your return and the bank statement with the account details.

Insurance

Learning the basics

Insurance is as important for women as it is for men. Women should definitely buy life insurance the day they start earning and should revaluate the cover whenever they get a substantial raise.

Query Corner

How does a fixed maturity plan work?

FMPs are closed-ended funds that primarily invest in bonds and fixed deposits, though some also have a small equity exposure.

Mutual Fund

'Invest for 3 years'

Invest in the market at current levels with a three-year perspective. The index is expected to deliver a CAGR of 15-20% over the next three years, says Srividhya Rajesh.

What's on offer?

An offer document is one of important sources of information concerning a mutual fund. A fund must revise its offer document once every two years.

Talk Back

'Government should fix a fair price for stocks'

The stock market work on the free market principle. So, it is almost impossible to fix a price for the stocks. The investors who want to play it safe can always go for debt instruments such as fixed deposits, National Savings Certificates and the Public Provident Fund.

Editor's Note

From the executive editor

The explosive combination of Obama and the global financial crisis can create more jobs in India over the next few years. So, despite the fact that you are at risk now, expect some good times ahead.

My Idea

Pots of money

At Colour Factory, you can paint pottery, even make it, and take it home at nominal rates. Gurgaon-based Vikas Verma, 45, helps people lend colour to their creativity through the five outlets spread across the country.