Money Today Archive June 14, 2007 Issue

Edition: June 14, 2007

Cover Story

By Narayan Krishnamurthy

Should I buy stocks now?

Yes, but you need to be more choosy about the shares you pick than ever before. If you can't, let a fund manager do it for you.
  • Is it time for fixed returns? Volatile stock markets and high interest rates have made fixed income instruments attractive. Make most of this opportunity.
  • Is risk manageable? Yes if you understand correlations between various investments you have made and how each asset moves in relation to others.
  • Should I reallocate my assets? Yes, and regularly, to ensure that your investment portfolio stays in sync with your timeline, investment goals and risk tolerance.
  • What investors want to know? The days of heady returns on most assets are over for now. We advise you on where to invest.
Mutual Fund
Floating rate funds are well-equipped to handle interest volatility, but even they are not completely safe.
  • NFO resume Prasunjit Mukherjee, CEO of Plexus Management, a Kolkata-based fund tracker, deconstructs the NFO.
This will allow you to get the money in your credit on one day's notice, though at a minor interest loss.
My Story
Here's how Mahavir Jain, 32, used his power of mind to build a business. He had spare time to develop vocabulary building modules using mnemonics.
By Sharadh Manian
Wireless networks are no longer out of your reach. By spending less than Rs 10,000 you can surf the Net, print documents and pictures and listen to music.
Reliance Capital has attracted the interest of many foreign financial institutions. An expected sale of cross-holdings in its own group concerns should boost profits.
  • 'Buy' recommendation Foreign institutional investors continue to be heavy buyers of Indian stocks, benefiting from a strong rupee that translates into higher returns in US dollars. Indian mutual funds too have turned buyers.
By N. Krishnamurthy
Yes. If you invest for at least 10 years and review allocation, it will give you the best combo of insurance and mutual funds.
Real Estate
The number of new houses in Nagpur have almost doubled in the past four years. But the heavy demand for housing has ensured capital appreciation despite such robust supply.
Sector Scenario
Valuations of cement stocks seem to be reasonably priced. Companies are upgrading their recommendation to ‘reduce’ from ‘sell’.
Expert View
K.S. Gopalakrishnan
Ulips give flexibility to decrease or increase protection over the term of the plan. One can also add health insurance cover by adding critical illness riders.
  • Taking Interest In the current scenario the debt and fixed return instruments look very attractive and interest rates on bank deposits are still above 10% is indicative of good times.
  • Hype defused The rupee could further strengthen against the dollar to about Rs 38-39. But dipping exports, noise by exporters and low inflation could prompt the RBI to intervene and push it back to the Rs 40-42 range. Investors will just have to live with currency volatility.
  • Riding volatility Investors with a long-term perspective can take the systematic route to investing. Systematic investment and transfer plans operate on the principle of rupee cost averaging.
  • Enigma of returns The question is not which sector looks good. It is where MFS and FIIS will be pumping in liquidity.
  • Engage early with the market The entrepreneur should be willing to stay the course in spite of the inevitable initial hiccups and hurdles.
By Sushmita Choudhury
You need to know about how airline frequent flyer programmes stack up, from collecting reward miles to redeeming those slippery points.
Small Fortune
Joining a gym can hurt your financial health. Instead, jogging or walking in the neighbourhood park can help you save Rs 6.15 lakh.
If small is beautiful, taxpayers can say goodbye to Saral forms. The new income tax return forms are substantially lengthier than various Saral variants used till now.
Portfolio Doctor
Chennai-based U.N. Subhash has been wise to start investing early but must increase his exposure to equity and insure himself adequately.
Query Corner
We introduce a new interactive section for investors. Write to us and we will give a detailed answer.
Editors Note

There are too many investors who could have avoided trouble and losses had they asked basic questions before investing their money. So “Ask Questions” is the best advice we can give you about how to invest wisely.

Talk Back

It is a misconceived notion that wills must be made only in old age. A will should be written as soon as an individual has reasonable wealth that may be useful to the person it is bequeathed to.

By Babar Zaidi
The Saral was an omnibus form to be used by all taxpayers with all types of taxable income.  The single-page form is the outgoing Saral and the multi-page variants are the new income tax return (ITR) forms.

December 27, 2007

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