Equitipz

Stealing from the Gods – Quantative Easing the ancient Greek way

Amandeep Singh — Sun, 23 Oct 2011 21:13:38 +0000

Gold has always been popular in troubled times. During the Peloponnesian War (around 431 BC) between the Athenians and the Spartans, the Athenians melted down the gold from the statue of Athene in the Parthenon in order to issue an emergency gold currency. It’s a fashion that has continued ever since. Recent economically choppy waters have seen record rises in gold prices. Central Banks have their own reserves of gold and although not adverse to selling it from time to time the current trend is for them to purchase, keeping the prices high and returns good for investors. However, despite its reputation as the investment of the wealthy, gold is accessible for investors of any level.

Cautious speculations

As a first time investor in gold, there are some sectors of the market to be wary of. You can speculate by investing in shares in gold mining companies. On average the World Gold Council estimates that 2500 tonnes of gold are being mined annually, much of which is destined for the jewellery trade. With such small amounts being introduced into the market each year it may seem attractive to buy shares in your very own gold mine. However, this is a high risk strategy. Mining operations can be affected by all manner of problems; from sudden unexpected nationalisation to war, famine and plague. Geology can affect expected returns and for this reason alone, investment in gold mining operations should be only undertaken by the experienced.

Also Read: Why Should I buy Gold?

Bullion, coins and jewellery

Once mined, unlike most other commodities, gold remains in circulation. Jewellery can be returned to the market, and gold bullion is held by Central Banks and investment companies. For those new to investing in gold buying bullion, gold coins or even jewellery is probably the safest way to invest. Gold has been subject to some record breaking highs recently – but there is always the danger that it can fall. Over time gold will remain a viable investment – very much like property investment and possibly less risky. By investing a section of your portfolio in gold you create a sound basis to your holdings. Gold, unlike cash, is not subject to spectacular devaluations and inflation. An ounce of gold at today’s prices (around £1000) will be worth the equivalent if not more in 20 years’ time, whereas the same amount of cash will most likely have devalued to the status of ‘pocket money’. Gold coins may hold more attraction for some investors as they have the potential for a ‘numismatic’ value in addition to the face value of the metal – this simply means that the older and rarer the coins the higher the price.

Secure shopping

Buying gold online is relatively straightforward although a number of factors need to be considered. Gold bullion can be sent direct to you and you can arrange your own storage. There are additional insurance costs in this case – to ensure you receive the gold safely. However there are numerous gold trading sites that can arrange storage for you. If you are buying gold for the first time it’s worth considering the reputation and the guarantees offered by the site your purchasing from. National mints that supply gold bullion and coins should offer some of the best security and guarantees on the market. For the first time investor gold bullion should be the first option to consider. Gold is a reliable way to protect wealth and to establish a strong basis to a portfolio. While wars and economic troubles can see rapid rises in the price of gold, silver and other precious metals, the most common gold investment strategy is to retain ownership for several years – to protect cash wealth against devaluation and inflation. Investing in gold is one of the oldest methods of wealth protection, and offers a level of security that is available in few other investments.

For Further Reading:

9 Tips to Remember When Choosing a Financial Advisor

Ashyia — Sun, 25 Sep 2011 22:18:31 +0000

Choosing a financial advisor is an important step, for most people, to creating more wealth and financial security. Whether you’re a minor investor who just wants to keep your assets safe or have several thousand dollars to invest so that you can watch them grow, a financial advisor can help you do these things. Remember, a financial advisor is not an insurance salesperson or a stock broker, but is rather a person who will help you create an overall financial plan for your current needs and where you want to go with your finances.

Also Read: 7 Reasons to be Your Own Financial Advisor

Before you choose a financial advisor, read through these ten tips, which will make it easier:

1. Avoid those who charge commissions

Financial advisors who charge a commission are more likely to push you to purchase certain products. They may care less about what’s good for you and more about their own bottom line. If you see that a financial advisor gets even part of his or her income from commissions, look elsewhere for a better advisor.

2. Look for CFP certification

Always go with financial advisors who have a current CFP – Certified Financial Planner – certification. This is the highest-quality certification that can only be earned by pasting the Certified Financial Planner Board of Standards. Plus, to keep the CFP current, financial planners must engage in continuing education, which keeps them up-to-date on the latest developments so that they can help their clients more effectively.

3. Ask for recommendations

As with most things, it’s a good idea to choose a financial planner based at least partially on recommendations. At the very least, getting recommendations can give you a place to start. Your best bet is to ask for recommendations from people who are in a similar life situation to yours, as different financial planners will have different specialties. Start with colleagues at work or friends who have a similar lifestyle to yours.

4. Ask specifics about the pay structure

It’s not enough to know that you want to avoid those who earn money from commission, though this might seem a little cheaper to you up front. You really need to know exactly how the pay structure of a financial planner works. The most common are flat fee, hourly, and percentage-based. At first, it’s probably best to start with a flat fee or hourly rate. At some points, turning over 1% or so of your annual assets to your financial planner can be beneficial, but this may also lead to an advisor who makes decisions based on her own bottom line rather than on what’s best for you.

5. Find a fiduciary planner

A fiduciary financial planner has basically promised to always act in your best interests. Non-fiduciary financial planners usually hold to the sustainability standard, which means they can get you products that are good for you, but aren’t necessarily in your absolute best interest. If your financial planner isn’t going to always, 100% of the time advise you in a way that’s in your best interest, run the other direction.

6. Use a background check

Getting a background check on a potential financial planner is a great idea, particularly if you don’t have recommendations from other long-term customers you know and trust. Also, check to see if the CFP certification for that financial planner is current by finding out who administers the credentials and calling or emailing the administrator to see if the credentials are valid.

7. Avoid those who make too-good-to-be-true claims

If your financial advisor claims to be able to beat the market every time, they’re giving you a too-good-to-be-true promise and they probably aren’t telling the truth. A financial advisor may be able to show evidence of beating the market average often, but no one can guarantee you that this will happen all the time, so if you’re getting guarantees like these, find someone who is more reasonable.

8. Get details about experience

Just because a financial planner has a CFP or another credential doesn’t necessarily mean they have great experience – it just means they studied hard enough to pass the credential test. Before you decide to work with a financial planner, get as many details about that person’s experience – from the planner and from other clients – as possible. You don’t necessarily have to work with someone who has decades of experience (you might not be able to afford this person!) but you do want to leave your finances in the hands of someone who is reasonably experienced at giving sound financial advice.

9. Find a planner who agrees with your basic financial principles

Even if you’re just starting out, you probably have at least some basic financial principles in mind. For instance, you may be willing to take on a little bit of debt, or you might wish to live basically debt free. A financial planner who essentially agrees with the things that are important to you – or who can at least convince you otherwise using well-supported arguments – is your best bet.

Paying for a financial planner

If you can’t pay for a financial planner up front, Ashyia Hill from CreditDonkey says, you could always ask if they’ll take credit card payments. As long as you can charge flat fee or hourly payments to a low interest credit card and pay them off within a few months, you’re better off hiring a financial advisor now than waiting until you have cash in hand.

Whether you’re twenty-five or fifty-five, working with a financial planner can hugely benefit your financial life. This is because financial planners can help you make the best financial choices without your having to spend hours researching the latest developments in various markets.

This is a guest post by Ashyia Hill who writes at CreditDonkey. If you also want to Write for EquiTipz, please read more details here.

For Further Reading:

All you wanted to know about ULIPs Unit Linked Insurance Policies

trijotsingh — Fri, 27 May 2011 23:56:37 +0000

ULIPs - many of us have heard of this term and want to learn more about it but have been unable to get the proper information as to what ULIP is all about, who regulates them (there is a conflict between IRDA and SEBI as who is going to regulate ULIP)

What are ULIPs (Unit Linked Insurance Policies)?

ULIP is a life insurance policy which provides a combination of risk cover and investment. The dynamics of the capital market have a direct bearing on the performance of the ULIPs. (Remember that in a Unit Policy, the investment risk is generally borne by the investor.)

In other words we can say that it is a goal-based financial solution that combines the safety of insurance protection with wealth creation opportunities.

How the ULIP works?

In ULIPs, a part of the investment goes towards providing you life cover. The residual portion of the ULIP is invested in a Unit fund which in turn invests in stocks or bonds; the value of investments alters with the performance of the underlying fund opted by you.

What is a Unit Fund?

The allocated (invested) portions of the premiums after deducting all the charges and premium for risk cover under all policies in a particular fund as chosen by the policy holders are pooled together to form a Unit fund.

What is Unit?

It is a component of the Fund in a Unit Linked Policy. (It is almost same as that of Mutual Fund).

What Types of Funds does ULIP Offer?

Most insurers offer a wide range of funds to suit one’s goals:

Investment objectives
Risk profile
Time horizons.

The following are some of the common types of funds available along with an indication of their risk characteristics:

General Description	Nature of Investments	Risk Category
Equity Funds	Primarily invested in company stocks with the general aim of capital appreciation	Medium to high
Income, Fixed Interest and Bond Funds	Invested in corporate bonds, government securities and other fixed income instruments	Medium
Cash Funds	Sometimes known as Money Market Funds — invested in cash, bank deposits and money market instruments	Low
Balanced Funds	Combining equity investment with fixed interest instruments	Medium

Investment returns Guaranteed in ULIP?

One of the reasons people find to stay from ULIP is that, investment returns are not guaranteed in a ULIP. The investment risk of the portfolio is borne by the policy holder. Depending upon the performance of the unit fund chosen, the policyholder may incur gain or loss on his investment.

The Charges in ULIP?

ULIP which are offered by different insurer have different charge structures, following are the different types of fees and charge :

Premium allocation Charge

This charge normally includes initial and renewal expenses apart from commission expenses. It is basically a percentage of premium appropriated towards charge before allocation the units under the policy.

Mortality Charge

This is the charge to provide the cost of insurance cover under the plan. It also depends upon the age of member, heath, and amount of coverage.

Fund Management Fees

These are fees levied for management of the fund(s) and are deducted before arriving at the Net Asset Value (NAV) .

Policy/ Administration Charge

These are the fees for administration of the plan and levied by cancellation of units. This could be flat throughout the policy term or vary at a pre-determined rate.

Surrender Charge

A surrender charge may be deducted for premature partial or full encashment of units wherever applicable, as mentioned in the policy conditions.

Fund Switching Charge

Generally a limited number of fund switches may be allowed each year without charge, with subsequent switches, subject to a charge.

Service Tax Deductions

Before allotment of the units the applicable service tax is deducted from the risk portion of the premium.

How much of the premium is used to purchase units?

As I mentioned above, the full amount of premium paid is not allocated to purchase units. Insurers allot units on the portion of the premium remaining after providing for various charges, fees and deductions.The total monetary value of the units allocated is invariably less than the amount of premium paid because the charges are first deducted from the premium collected and the remaining amount is used for allocating units.

What is Net Asset Value (NAV)?

NAV is the value of each unit of the fund on a given day. The NAV of each fund is displayed on the website of the respective insurers.

Basic Terms Used:

Free Look Period: The policyholder can seek the refund of premiums if he disagrees with the terms and condition of the policy, within 15 days of the receipt of the policy document. The policyholder shall be refunded the fund value including the charges levied through cancellation of units subject to a deduction of expenses towards medical examination, stamp duty, proportionate risk premium for the period of cover.

Top up: One can invest additional contribution over and above the regular premiums as per their choice subject to the feature being available in the product. This facility is known as “TOP UP” facility.

Switch: This option provides for shifting the investments in a policy from one fund to another provided the feature is available in the product. While a specified number of switches are generally effected free of cost, a fee is charged for switches made beyond the specified number.

Partial Withdrawal: This option facilitates withdrawal of a portion of the investment in the policy. This is done through cancellation of a part of units.

Additional Information

One has to verify the approved sales brochure for:

all the charges deductible under the policy
payment on premature surrender
features and benefits
limitations and exclusions
policy lapse and its consequences
Illustration projecting benefits payable in two scenarios of 6% and 10% returns as prescribed by the life insurance council

At last, the information which is provided by the insurer to the insured consist of following:

An annual report covering the fund performance during previous financial year in relation to the economic scenario market developments etc. which should include fund performance analysis
Investment portfolio of the fund
Investment strategies and risk control measures adopted

Author Disclaimer: The above material is provided for general information only and does not constitute legal or other professional advice.

For Further Reading:

Should you invest in Highest NAV Guarantee ULIPs?

The Miracle of Compounding Returns – The Eighth Wonder

Amandeep Singh — Mon, 16 May 2011 20:51:00 +0000

Some of the greatest minds in the world have marvelled over a simple, but extraordinary forceful concept – the power of compounding. Einstein called it “the greatest mathematical discovery of all time” and “the eigth wonder of the world.” The economist John Maynard Keynes described the “awesome power of compounded interest”.

The Concept of Compounding

The key to this concept is the way in which, given enough time, even apparently trivial amounts of money can turn into sizeable sums. In other words, the longer you invest for, the more you benefit from the “snowballing” effect of achieving growth not only on the original amount you invested but also on all the growth it has achieved in the earlier years.

Example

Lets’ quote an example which will show how much growth you might achieve with a monthly investment over 10, 20 and 30 years. For example, if you invest Rs.1000 a month in a fund that grows by 8% on a monthly compunding basis you will have Rs. 184,166 after 10 years. The benefit of Compounding is evident when you look at the returns over a period of 30 years – they are far more than eight times the value of a 10-year investment. In fact, the final value is nearly Rs. 15,00,000.

The powerful effect of compounding is another inportant reason why it actually makes sense to maintain a long term strategy, rather than changing your investments in response to the short term Market Movements.

Also Read: When is the best time to invest?

So, are you taking the full advantage of this miracle? If yes, then which channel have you invested your money to see the compounding magic work wonders for you?

For Further Reading:

Investing can be rewarding but is often uncomfortable!!!

Financial Plans For Younger People

Amandeep Singh — Mon, 11 Apr 2011 15:30:05 +0000

When should you start considering financial planning? Many young people cannot see the point of insurance and investments, because they feel they don’t need them, or they believe there is plenty of time left. It is only when we see what benefit, we could have had if we had invested those small amounts regularly, do we see the great loss from not planning ahead. Financial planning, insurance, good lending and investments should start as young as possible. Here is a general guide for your young people, from income protection insurance, through to simple saving.

Financial planning

Financial planning sounds such a big and complicated term. In reality, it is about using your money sensibly. Financial planning can just mean making up a monthly budget and sticking to it. Financial planning implies a sensible use of your money. Money will work to your benefit if you can accumulate it. You will be able to lend more if you have gained that trust.

Savings

A standard rule for general long-term saving is simple. It should be 10% of your income. This is not saving for any particular purpose, it is purely long-term savings. This money should never be used for any purchase that is not another long-term investment, such as buying a house. If you are saving for other items, such as a new TV, you should save separately for that. Consistent saving, and consistent increases in your monthly bank balance, will put you in favour with your bank. And there are a lot of consequences to that. Read: The Miracle of Compounding Returns

Credit

We all need to get credit in our lives. Starting of small, and getting a good reputation, is the name of the game. There are too many ways to get credit, and you should be very careful about this. There are many better ways to get that new home entertainment system than signing up for a two year contract. The best initial credit to get is a credit card. And only use this when it is beneficial to you, and always make the payments back so you do not get charged interest! (Read: How are the Interest- free days calculated for my credit card?)

Must Read: 8 Mistakes to Avoid When Using a Credit Card

Before too long, you will be able to get a personal loan. We all need a car, and getting a car loan, or personal loan to fund that purchase, will put you in good stead for the biggest investment in your life, your mortgage and your home. (Read: Should I prepay my loan or Invest that money?) The early you can get a mortgage, and afford it, the better. It is easy to get side-tracked with so many offers of credit. Remember, what ever you get now, you have to pay more for later. You should choose wisely.

Future

When we are young, it is too easy to think that we do not have to think about the future, and we have plenty of time. Even if you are single, your funeral could be rather expensive. Manage future protection with the size of your life insurance and other policies. In today’s volatile business market, none of us can afford not to have income protection and health insurance. Because you are young, and your policies will be cheaper, the best choice is to manage your cost of coverage. Invest step by step. You can increase these policies over time. It is best to get your foot in the door early. Insurance and even a small amount of superannuation, even at a young age, is very important.

The key to making the most out of the money you earn is a little patience. Spread your money evenly so you are covering all your bases, and by the time you are in your 30s, you will find that you are well on your way to a successful future. That is when it will really count.

For Further Reading:

Top 8 ways to Build Your Emergency Fund

Amandeep Singh — Sun, 19 Dec 2010 20:18:59 +0000

This post is submitted by our Guest Blogger Shaun Nichols. Shaun is the founder of debtconsolidationdetails.com where he writes articles on debt consolidation and other aspects of personal finance. Click here if you also want to write for EquiTipz.

Have you very often faced a situation where you needed cash urgently but there was no help in sight? If your answer is a yes, then you should perhaps start thinking about setting up an emergency fund. Yes, you always knew its importance, now it’s time to create one for yourself. Be it an urgent need for cash or pulling yourself out of debt, it is always wise to be prepared for emergencies.

Perhaps, the saying “prevention is better than cure” applies most aptly to a financially strapped situation. Read on to know how you can bail yourself out of such an emergency.

1) Begin with a small savings account: Whoever told you that emergency fund account got to be started big was utterly wrong! The idea is to start small. Open a savings account and deposit whatever you can regularly. The important thing is to make a habit of contributing something towards it frequently.

2) Go the traditional way: Isolate the emergency fund and make it your most important priority. Use every cent to boost your emergency savings. After paying off your bills each month, determine to set some money aside for your emergency account. A decent fund is generally equivalent to 3 to 6 month’s worth of expenses.

3) Try the frugal path: You longed for that $150 jeans at the supermarket? Well, drop the idea for the time being. Yes, curb your unnecessary expenditure and use the money to make your emergency fund healthier. Purchasing things like video games, gadgets, magazines etc. should never be on your priority list.

4) Add it to your list of bills: It takes determination but treating your emergency fund as your bill would greatly help to increase your savings. Imagine it is your payday when you have to clear your bills before you can take care for other variable expenses. The increment in your savings this way would help you to stick to your decision.

5) Make use of financial windfalls: If you have been lucky to receive a tax return or a bonus from work, don’t get tempted to spend it all at once. Instead, make use of such windfalls to fill up your emergency fund. You might want to spend a part on yourself, but make sure that the rest of it makes it to your fund.

Also Read: The Importance of Investing

6) Use a piggy bank: Get a piggy bank or anything good enough where you can safely keep your money. Whenever you get a chance, put something into this piggy bank. For example, at the end of the day you can empty your purse of all the change and use it to fill your piggy bank.

7) Sell sell sell! : Make a list of all the items that you own and get rid of the clutter from your house once in a while. You might want to sell these off on eBay or some other website. Save your earnings from these for your emergency fund.

8 ) Most importantly, stay focused: Most of the times people give in to their temptations. To save your money, you have to sacrifice on little pleasures like eating out, going for movies and the like. You can stay focused by looking at the positive aspects of your doings. Overcoming temptation makes you stronger. Also, giving in to such allurements once in a while doesn’t harm and, in fact, helps you to stay focused.

So, stop making excuses and get geared to start an emergency fund from today itself. This is the best way to be prepared for a rainy day. Sure, you do not want to rely on credit cards for emergencies and push yourself all the more into the hole!

Also Read: 8 Mistakes to Avoid When Using a Credit Card

For Further Reading:

Download “Markets on Mobile” – Official Moneycontrol.com app for iPhone

Amandeep Singh — Sun, 19 Dec 2010 16:16:45 +0000

This is a cross post from our technology related blog, Technolism.com where we write about the latest and interesting iPhone applications.

Each morning, every stock investor has the excitement to stay updated about what his Stock portfolio is up to. I fall in the same category and while leaving for office each day, I have the habit to access Moneycontrol Portfolio on my iPhone by opening the site in Safari browser for iPhone, and this happens each day.

Till now, India’s leading financial portal, moneycontrol.com did not have an iPhone application, considering the fact of increasing SmartPhone user base in India. Recently, when I logged into the Moneycontrol website, much to my surprise, it showed a pop-up saying “Download Moneycontrol iPhone app now”

Moneycontrol.com, India’s leading financial portal has launched its official app for iOS devices like iPhone, iPod Touch and iPad. I have downloaded the app and I must say, it is a great application and much easy to access as compared to the way I had to do it earlier

The free iPhone application is extremely useful for traders, stockists, and brokers who deal in finance and markets.

Some of the main features of the Moneycontrol Markets on Mobile iPhone app are listed below:

Get live stock quotes : Get real time stock quotes, Indian and Global Market Indices.
Track your portfolio: Now get Portfolio Manager and track all your investments, assets and borrowings while on the go.
News Center: Stay updated with the latest from News Center.
Watch LIVE TV: Watch CNBC-TV18 & CNBC AWAAZ live.

Below are some of the screenshots from the app:

Download now from the App Store: MoneyControl ‘Markets on Mobile’ iPhone app

You can also get this app by sending an SMS ‘MOM’ to 51818 from your Mobile.

Have you already downloaded the iPhone app? If not go ahead, download the app on your Apple device and share your views with our readers.

For Further Reading:

Getting through the personal budget minefield, one step at a time

Amandeep Singh — Wed, 08 Dec 2010 21:28:00 +0000

Most people get more mental exercise than they want when it comes to dealing with personal budget issues. The problems can range from real nuisances to quite genuinely baffling situations where they may be wondering whether they need a financial adviser or an astrologer. Some things, like home insurance, may be basically simple in themselves, but in combination with other finance issues, can be absolute pests if you don’t know how to manage the combination of expenses.

Image Credit

The basic answer to dealing with personal budget issues is summed up in one word – “Planning”. The best thing you can do for your personal budget is to get ahead of the problems. It is possible to avoid problems entirely simply by navigating around the irritating issues and creating a working cost base oriented to essentials.

It’s ironic that quite a lot of problems people have with their personal budgets aren’t really the result of lack of care or extravagance. They’re much more likely to be the result is simply not understanding some of the issues involved in budget spending, or miscalculation. Personal budgets can be complex, and unless you’re living in a cave, learning to manage budgets can be quite an ordeal.

Personal budget basics

The only real way to manage the personal budget is to lock down expenses:

You really do need to plan your expenses in advance, and as far as possible stick to the budget.
Saving a bit of money wherever possible is also a good way of making sure that your budget isn’t going to fall to pieces on you. Read: Importance of Long Term Investments
If at all possible, try and pay unavoidable and essential expenses in advance, preferably including a discount if you can.
Put aside a little money around for spending and just having fun. This is also useful if you find something you really like that might trash the budget.
Look for better deals, always. Whatever you buy, whatever you’re paying for, it usually is possible to get things cheaper with a bit of effort.
Keep credit card spending firmly under control. Credit cards can be like financial ulcers, needing attention all the time and costing you money, usually at the times when you don’t want to be spending anything. Read: 8 Mistakes to Avoid When Using a Credit Card
Always try to get the best value out of your spending. Bulk buying, buying quality things that will last a long time and similar buying patterns all add up to considerable savings over time.

Dodging the minefield

As you can see, there’s a pattern in personal budgeting – The idea is that all your spending, saving and budgeting is properly integrated. That way you don’t get surprised by expenses, which is the real minefield zone. It’s easy enough to dodge spending by anticipating situations and making provisions in advance and create spare resources. The likely difficulties are when sudden expenses arise, and you do have to be prepared for those.

Savings and squirreling away can provide a useful buffer which prevents the live budget going off the rails. Think of these savings as your personal budget’s “contents insurance.”

For Further Reading:

The ETF effect – How investors can upgrade portfolios and stay out of the rat race on markets?

Amandeep Singh — Tue, 19 Oct 2010 20:57:56 +0000

Exchange Traded Funds, or ETFs, have been making big inroads into the mutual market. There’s currently estimated to be over a trillion dollars in fund management around the world, and managed funds are paying a lot of attention to their performance. ETFs are portfolios of funds, with unit prices valued on the basis of the net worth of the fund holding. The ETFs, which are commonly index based, are also traded in real time on the stock market, and have been becoming major trading commodities.

Also Read: 7 Reasons to be your own Financial Adviser?

ETFs as investments

The major benefit of ETFs is that they provide real value while also providing investors and funds with some shielding against the effects of individual stock movements. ETFs usually have quite conservative weightings of holdings in their portfolios, and a single stock taking a hit won’t have wide “collateral damage” to the holdings on that basis.

Conversely, investing on an index basis can provide massive upsides. The commodities markets, tech, aerospace, and other indices are typically prone to big moves, and if an entire index jumps, so does the ETF holding value. You only need to remember the big moves in tech stocks, oil, metals and others to see the major benefits in this sort of holding structure.

The portfolio approach to ETFs

Most investors, even the best, get at least a bit singed on the stock market at some point. Many don’t like or need to be waiting on stock moves to see returns on their investment portfolios. That’s where the ETFs come in. The stock market rat race is fine for day traders and institutions, but for managed funds and private investors, it’s not necessarily the place for peace of mind.

More to the point, it’s also not the best place for making actual money. The 2008 crash vividly defined the limitations of the conventional investment market. It also defined the worries of investors. The ETFs took their own hits, but they also recovered pretty quickly, and in some cases they actually took over as preferred trading entities. Huge numbers of ETFs were traded in the early recovery in 2009, and they’ve maintained a steady rate of growth.

Also Read: Market Fall – How To Recover Losses?

A typical ETF portfolio is based on a “spread”. The portfolio is spread over a range of indices, for example:

Dow blue chips
Energy and oil
Tech stocks
Mining
Food
Gold and precious metals.

As you can see this is strategic investment rather than the conventional form of market investment. The investment in 5 indexes can be made through share trading on the market or by prospectus. Each ETF also pays dividends, and they also do stock splits. (Like normal shares, they have their “X date” for dividends and entitlements.)

If you’re looking for investment options, the ETFs may be exactly what you need. It’s a good idea to research the different funds and get a good level of orientation to how the ETFs operate in the market, and look at relative performance. Talk to your fund manager if you need specific professional guidance in this type of investment.

http://www.equitipz.com/2009/02/market-fall-how-to-recover-losses.html

For Further Reading:

Top 5 Stock Tips for Beginners

David — Fri, 08 Oct 2010 19:37:54 +0000

Do you always want to run away from the idea of stock trading because you just do not understand anything about it? If your answer is ‘yes’ then it’s time to reconsider your notions. Trading in the stock market can be both fun and of much interest, provided you know how the market works.

It might be worth mentioning that many people have been lucky enough to earn millions in the stock market overnight while some have lost fortunes. So if you want to try your hand at stocks then better take some preparation. Here are a few tips which would help you to invest in stocks in a sensible manner:

1) Buying and selling of stocks frequently-a major mistake

Some people, mostly beginners, trade their securities rather too often. It might be due to the tips they hear on TV or the advices that are bombarded by the friends. These things can make you feel that you need to sell your current holdings and buy what’s recommended. However, this doesn’t work out. You only manage to make your broker rich in the process because he rakes in trading fees. If you buy and sell frequently, then the benefit will be negligible compared to the losses. Being greedy does not pay in stocks. Remember what Jim Cramer says: “bulls make money, bears make money, hogs get slaughtered”. This habit is not tax friendly either. You would often need to pay short term capital gain tax instead of long term long term capital gain tax which is lower.

Also Read: Sold the Shares; Do I have to Pay Tax?

2) Do not panic

Stock market is essentially for investors who like to experiment with their money. Here, Fear of losing may sink your ship. Of course, you ought to be prudent and cautious while investing in stocks but it is very important to hold your nerve when the market goes down. To win in the long run you should sell only when it yields you proper money. People who are driven by panic are prone to buying high and selling low.

Also Read: How to decide when to sell Shares?

3) Understanding stock market strategies

You should be aware of the basic investment strategies before you put your right foot forward. Warren Buffet believes that it is wise to invest in stocks that are undervalued by the market. He rightly points out that if you choose stocks with lower potential but higher price, then it might make you a winner in the long run. This kind of stocks usually grows faster and earns more than people expect. Technical analysis is another strategy that is widely used. Here, charts are used to predict the movement of stocks. It should be noted that this technique works best for short term trade rather than long term investments.

Also Read: Don’t let the Sensex Guide Your Senses!

4) Choose your broker carefully

Finding out the suitable broker for you can make a difference. While most people settle with brokers that their friends or relatives use, it might be useful to get yourself the best broker by doing some research. You should make sure that your broker has certain qualities. Firstly, the broker should allow you to place trades online. This is important because placing a trade online saves you quite a few bucks compared to doing the same in person. Secondly, don’t hire a broker who charges high fees. More often than not, their advices are not useful. Moreover, if the fees are quite high then it will eat your profits. Finally, if you are a novice then choose a beginner friendly broker. Some brokers are geared more towards veteran investors and their intricate methods may confuse you.

Also Read: Some facts your Broker does not tell you!!!

5) Beware of stock market scams

Stock market has its share of shady people but if you are careful then you are safe enough. Stay clear of offers which promise more than 50% return. Likewise, a guaranteed return is a doubtful case. Only a bank CD or Treasury bond can assure you of a guaranteed return. Scam emails informing you about “a golden investment opportunity”, are of course scams. Surprisingly, many people fall for it. Also remember that whenever someone tries too hard to sell you something, his motives are perhaps questionable.

Also Read: 4 Golden Rules of Equity Investing

Investing in stocks is not as difficult as it seems. If you have some basic ideas then stocks can be a very lucrative proposition. So remember the above points and give stocks a try.

This post is submitted by our Guest Blogger, David Brown. David is the founder of fileyourbankruptcy.org, where he writes articles on Personal Finance. He is also associated with monsterhols.com, quicklyprofit.com, darngoodblogging.com, debtincome.com and allfinancialforms.com.

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Is Payday loan the right solution for you?

David — Sat, 28 Aug 2010 20:21:01 +0000

We are often overwhelmed by some unforeseen financial emergency in life and don’t know who to turn for help. Borrowing from family and friends can indeed be a humiliating thing. At that point of time Payday loan can become a blessing for you.

Note: The Payday loans are something like Personal Loans, available in India. This article is for our readers in UK, Australia, USA and Canada.

What is a Payday loan?

A Payday loan is small, short term and unsecured loan. It is designed to cover your expenses till your next payday. They are provided by cash advance stores with one time fees attached. The borrower usually writes a check for the amount borrowed plus the fee. So it is a loan drawn against a future paycheck to meet urgent needs. Loan amounts can range from a few hundred dollars to $ 1000. The interest charged is usually 15-20% of the amount borrowed.

Payday loans are getting increasingly popular these days. Why?

Payday loans provide an instant solution to an unexpected financial emergency. They can provide easy and fast access to cash. In case you have an emergency (like a health related problem), Payday loan can act as a quick fix.
Payday loan involves a hassle free process. It takes only a couple of hours to complete the formalities. You just need some basic documents like identity proof, bank statements etc.
Within a day the money will be deposited to your bank account. So you will get the cash within 24 hours. If you need the money quite badly then this aspect of payday loans will appeal greatly to you.
A good thing about Payday loan is that your financial information remains private. It is for consumers who want anonymity during emergency situations. In case of traditional long term loans things are just the opposite.
Credit checks are usually not required here. This makes it easy for people with no credit or credit problems to apply for Payday loans.
It is not hard to qualify for Payday loan. All you need is a steady monthly income and a valid bank account. Even an individual with bad credit rating or a history of bankruptcy can be eligible for Payday loan. Generally people who don’t have access to credit cards and savings account use this kind of loan. Military personnel and immigrants also use them often.
A Payday loan, as mentioned before, is an unsecured loan. That means even if you fail to repay your loans you won’t have to lose your assets.

Also Read: 7 warning signs that you have got too much debt

A few things to remember while opting for a Payday loan

Excessive dependence on Payday loans can be a source of trouble. You must remember that Payday loans are an answer to the emergency situations that pop up out of nowhere. If you start relying on them just because you can’t resist the temptation to buy unnecessary stuffs then a lifetime of indebtedness would follow.
Payday loans have extremely high interest rates. The lenders virtually take advantage of the fact that you desperately need cash. So before going for it make sure that you can afford it.
Payday loans are usually small loans. So if you need some big bucks then better look elsewhere.

Also Read: What is the right strategy to Combat Debt?

Payday loan stores are all over the place these days. If you still have trouble to locate them then internet can help you. Now that you are familiar with the concept decide for yourself whether it is the best solution for you. Take your decision carefully.

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Finally, Indian Rupee gets the currency symbol

Amandeep Singh — Thu, 15 Jul 2010 20:19:23 +0000

Some days back we updated you about the final 5 in the race for being the Symbol for Indian Rupee, in which the final was to be decided by the Indian Cabinet. The final 5 were decided out of the 30k design entries received for the Rupee symbol design competition hosted by the Indian Government.

The final verdict has been announced by the jury and finally, the Indian Rupee has got the new Currency Symbol. It resembles the English letter ‘R’ with its left vertical stem removed and with two parallel horizontal lines intersecting the top curving portion. The symbol reflects and captures the Indian ethos and culture as it also has the Devanagri ‘Ra’. This will help the Rupee retain its Indian character with an International flavor.

With the new symbol, the Indian currency joined a select club of countries namely US Dollar, British Pound, European Euro and Japanese Yen that currently have a unique identity with their own currency symbols.

The winning design for the Indian Rupee symbol has been authored by D. Udaya Kumar, a post-graduate student from the country’s premier Indian Institute of Technology. “My design is based on the Tricolour with two lines at the top and white space in between. I wanted the symbol for the Rupee to represent the Indian flag,” said Kumar.

D. Udaya Kumar, Designer, The new symbol for the Indian Rupee

The new rupee will also find its way on to keyboards of Indian manufactured computer systems, with suitable amendments being made to the existing list by the Bureau of Indian Standards.

As part of the strategy on incorporating the new rupee with the mainstream, the government said the national association of software companies, Nasscom, will approach IT firms to embed the symbol in their operative software, as a new programme or as an update.

This will enable the computer users worldwide to use the symbol even if it is not embedded on the keyboards like in the case of the Euro.

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