Money Today Archive December 25, 2008 Issue
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Edition: December 25, 2008

Cover Story

Narayan Krishnamurthy

2009: A year of hope

What is in store for investors in 2009? Money Today reached out to experts across all areas of personal finance to find out the new products and services that will be launched in the coming year.
  • Favourable for end-users After the recent price cut, most developers would have squeezed their margins close to the minimum level, so we do not foresee any further price correction.
  • After detariff, what? Price wars, new products and service initiatives…That’s what 2009 has in store for policyholders.
  • 'The new pension scheme is portable across jobs and locations' With the Pension Fund Regulatory and Development Authority (PFRDA) becoming operational and planning a new scheme for the public from April 2009, the stage is set for action in the pension industry. PFRDA Chairman Dhirendra Swarup tells Narayan Krishnamurthy how the new plan will work.
  • Back to savings Investment is likely to take a back seat compared with deposits and savings as banks focus once more on the basics.
  • Your money, your life The new year could see a shift towards protection and pure risk insurance covers.
  • Better security for sunset years This year might finally see the country’s first large-scale effort to build a system for its citizens’ social security.
  • Setting a tough goal The provident fund has failed to deliver what it was set up to provide—inexpensive and effective social security for the organised sector.
  • The gain and pain of getting credit Stringent lending norms will make it difficult to secure loans, but the cost of borrowing will definitely go down.
  • Borrow to build assets Lenders will want a higher down payment. The impact of credit rating will see private banks offer a differential interest rate to borrowers based on their credit history and score.
  • Money on the move There’s hardly a bank whose site provides comprehensive and quality financial planning. We’ve got to work on this and provide consumers with a quality tool.
  • More covers, customisation Price competition will force insurance companies to reduce costs and customise products. Buyers would have a choice of distribution channels, which would lead to differential pricing.
  • Crisis could be cathartic In 2009, investors will use past performance as a benchmark while investing in funds. The industry must ensure that they are armed with the knowledge required to make informed decisions.
Mutual Fund
Narayan Krishnamurthy
This year, the mutual fund space will witness tougher regulations, some new players and investor-centric plans.
  • 'G-sec yields may decline' Debt investments are not risk-free, though the risk is lower. Also, there is always a liquidity risk during uncertain times.
  • What’s an FoF? During an economic slowdown or recession, it is not advisable to follow a fixed investment style in mutual funds as it can be detrimental to the fund’s performance.
Tax
The Income Tax Act offers exemptions for certain categories of allowances. You can opt for some of these to minimise your tax outgo. Besides these, there are some tax-free allowances on which the employer has to pay the fringe benefit tax.
Technology
Brinda Vasudevan
Fast cars, powerful bikes, snazzy phones, gripping games… The new year is set to offer more than its share of goodies for gizmophiles. These are just some of the many gadgets that are likely to hit the Indian markets in 2009. We also look at the new technologies that are bound to rivet the masses.
Stocks
Nowhere is the resilience of Indians more apparent than on the Sensex, which seems to shrug off the effects of terror attacks every time. While the 9/11 slide was more an after-effect of the American markets.
  • Not so great expectations Corporate earnings are likely to fall this year. Money Today studies the top companies and sectors to examine their performance over the next few quarters.
  • A twist in the portfolio tale As Dipen Sheth indulges in introspection, he proposes a change in the management of portfolios. An interactive style, he hopes, will help deal with the crisis in a better way.
Insurance
A life insurance policy covers your life, offering benefits in case of death. Riders are a good way of enhancing a policy without having to pay as much. They not only help spread the risk but can be selected to suit specific needs.
Portfolio Doctor
Kamya Jaiswal
This Visakhapatnam-based couple must try to increase surplus money and invest it in equity diversified funds to accelerate the growth of their portfolio.
Books
There is more philosophy than finance in these cult books, but randomness requires this extensive build-up to be executed, or even understood, says Kamya Jaiswal.
Query Corner
The economic downturn has spawned several misconceptions. One such erroneous notion is that the Indian economy is facing recession. Here’s what it means and why it is not correct.
Insight
After huge redemptions in September and October, November saw investors’ confidence returning.
Editors Note
Alam Srinivas
It is clear now that the impact of global recession on India will be severe. It may not suffer as much as the developed economies like the US, Europe and Japan, but the situation here will be worse than what was anticipated a couple of months ago.
Talk Back
We will be coming out with a special issue on tax soon. So keep an eye out for our taxation issue. You may also find the tax calculator on our Website useful.
Upfront
Depression, recession, bear market... all have translated to job scares, a slowdown in demand and panic attacks. Here is a recap of the spillover effects of the ongoing economic imbroglio in the last fortnight, across the globe.
  • Persistence pays Policyholders gain by staying with an insurance policy, and insurance companies benefit by offering better prices and making it possible for the policyholders to stay on.
Now and Then
In India instant noodles aren’t the cheapest of foods though they are considered convenient by millions of mothers and young, working professionals.
My Idea
Eight friends from diverse professions join hands to launch Monster Fishing, a company that offers a unique fishing holiday on the picturesque Andaman Islands.

December 25, 2008

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