Thank you 2011 and Welcome 2012

It is time to usher in a new year. It is also time to look back and take stock of things that happened in the year that went by. 2011 had been a tremendous year for us, it was a year that tested us with a lot of challenges and also the year which encouraged us with sweet successes. For both we are thankful, the challenges made us stronger and the success made us grateful.

Optimising investment: The importance of diversification

Author: John Hughes
Author Bio: John Hughes is the resident blogger at http://www.bestbonds.co.uk/, a UK based site that provides access to market-leading investment and savings bonds

“Don’t put all your eggs in one basket” is a well-known idiom that perfectly captures the ideas behind investment diversification. 

Part of the thrill of investment involves the introduction of risk to your capital in pursuit of better rewards, but no-one wants to risk their hard earned cash unnecessarily. Some investment opportunities will inevitably come with a higher element of risk than others, but diversification can help you keep risk levels at a minimum. 

What Akash Tablet means to India?

What a day for the emerging new India. The prestigious Indian government project to take the digital technology to poor, Aakash Tablet, received an overwhelming response on the very first day of its online booking. We saw many moments where the website http://www.akashtablet.com becoming unavailable due to heavy traffic. The device is now available for purchase online for everyone including students if you are willing to fork out Rs. 2,500. One of my friends joked that this is even cheaper than some medical tablets.

The Canadian company DataWind, who manufactured the Akash tablet, said that the online booking is available for students version and the pre-booking is for UbiSlate 7, the upgraded version for all.

To Buy or Not to Buy A Mahindra Reva.

There was a big discussion amongst ourselves about petrol prices and the cost of using a car on a daily basis. The way things are going it seems petrol prices are only going to increase in the long run and we need to come up with a viable alternative to petrol.  This obviously led to Mahindra Reva, the only electric car available in India.
There were opinions for and against Reva, for many the Reva was too costly when compared to a Maruti 800 or a Tata Nano but the others held the view that the high initial cost will be offset by the low running cost of the Reva. With both sides not relenting, we thought of doing an analysis of the cost of owning a Maruti 800 and Reva. In this blog we share what we found out, hope it will be useful to you as well.

The Hype and Reality of Indian Social Media

In our meeting with some of our clients we have come across the idea that Indian social media is more hype than substance. In this blog I intend to take a closer look at the matter.

The Hype
The ability of social media to influence people has been the key factor in its massive adoption by the marketing industry. Marketers job is to influence people so that his/her product is seen as desirable or essential by the target audience. It was the Midas touch that every marketer dreamed to have.

How to Create a Trading Strategy for Average Online Traders

Author: Janice Wilson
Author Bio: Janice Wilson is a financial expert who enjoys trying to find the best ways to use technology to help her financial life. When she is not trading stocks online, she spends her time trying to find lower car insurance rates online.

Over the past several years, a revolution has been taking place in online stock trading. With the continued advancement of computing power and internet speed, high-frequency and algorithmic trading have become very popular methods by which to profit from online trading. Although high-frequency and algorithmic trading are not precisely the same thing, they are generally thought of as two sides of the same coin. High-frequency trading describes the use of computers to make split-second trading decision, often employing strategies that require a position for only minutes or even seconds. Alternatively, algorithmic trading employs the use of sophisticated programming models to profit from market inefficiencies. Both institutions and individual traders have embraced such trading strategies to such an extent that high-frequency trading is now believed to account for three-quarters of all stock trades on the various exchanges. As such, it is very difficult to develop a profitable trading method without the use of high-powered computers with sophisticated programs. Of course, a computer is only a tool; in order to profit from online trading, a trader must develop a strategy in order to exploit profitable opportunities that exist in the market. There are many such possibilities of such strategies. However, two of the most popular strategies are the following:

1. Technical Analysis
2. Arbitrage

From Stranger to Kinship: Transform your customer relations

Don't Talk to Strangers
When we say the word "corporate" what is the picture that comes to our mind, usually it is either a building or a stranger with a confident but somehow plastic smile. There is nothing personal or warm about those images. Corporates/Business are viewed as cold, money making machinery that interface and interact with people out of the need to make a profit rather than by choice. Successful business houses are well aware of this and they spend huge chunks of money to build brand images that their customers can identify with. Usual ploy is to have a brand ambassador who has a good fan following in the target audience and then push advertisements to support the image that the business wants to build. What this does is that, to the customer, the business house is not a faceless cold entity anymore instead it is identified by a person who is loved and revered. The brand expects to rub off some of the goodwill that is enjoyed by the brand ambassador. Brand ambassador might be very famous personalities but they are still strangers to the customers. This means there is not much of an emotional strength in the relation that the brand is trying to build with its customer.

The Guests from the Emperor’s Court (Update for week ended 18 November 2011)

Guest Post by Narayan Swamy.
Narayan Swamy is currently a senior banking professional at an International Bank in Mumbai, India. He has over 20 years of banking experience across corporate and private banking in India and has lived in all the metro cities of India. This is a re-post of his blog post by the same name on his blog Making Sense of The SENSEX.

Chinua's father was an honorable businessman. He was respected in the village and his expertise in putting together gunpowder, oxides of copper and mercury was unrivaled. He had learned this from his father. He had also traveled to the court of the Emperor to present some of his masterpieces which were used in the Moon Boat Festival as well as the New Moon Year of the Rabbit. The foreigners had already started making inroads into the Emperor’s Court, by then, as advisors and tutors to the young Emperor. The Spanish also brought along a lady teacher to keep the Dowager’s palace members engaged in a new dance technique, which was so different from what the concubines danced to, tuned to the lilting shamisen. An Italian who traced his origins to a certain Signor Polo also tried to re-introduce the complicated wheat pasta into the royal kitchen. Chinua's father saw this as a negative influence on his people, as he had a hunch that trouble would not be far behind. He had grown up on the Confucian style of living, where foreigners were to be treated as guests, but if they made your home theirs and their food yours, it would be with no so good consequences. And he wanted to tell the court minister who had brought him to meet the Emperor and his Prime Minister. But little did he know that a traitor lurked behind the curtains. His horse was killed in what looked like an accidental explosion of fireworks, and his battered body could not even be transported back to his village. Di Hong had accompanied to Chinxuato Beijing for the funeral. And after they had returned to their village, just as Chinxua’slife had turned turtle, the Little Emperor’s life turned turtle, too. The turncoats had done him in. The Dowager’s drinks were poisoned and she was leading a life of a vegetable, with little abilit y to control and protect the Little Boy Emperor. The Europeans had started battling amongst themselves for the Golden Throne. The Prime Minister was murdered on his way to the Temple inside the Forbidden City. The countryside had started turning red, as the Red Uniformed army of the English started sailing upstream the Pearl River and pillaging villages, destroying crops and houses, leaving bloodshed in their trail. Chinxua had another battle to handle – that of Ni Bao vs Di Hong; but that could wait for now. And as Di Hong got to hear of the neighboring village being attacked, he rushed to the house on the Southern Bank of the Pearl River. He gathered some valuables, tied them up into a bundle, slung it over his back, and quickly asked the women of the household to follow him into the mountains nearby. They would have to leave the sheep and horses behind. Chinua said a prayer, lit some joss sticks, and stuck them in the sand bowl in the courtyard in front of the house. She bolted t he red door of the house (not knowing why, as she was sure that the marauders would break every lock and every door). She took a pearl from her precious belongings and prayed to face the gushing river opposite her house, and after the whispering prayer, turned around and threw the pearl over her right shoulder (for good luck) into the river. The pearl went back to the same river from where it had been fished. It was a sort of gratitude she gave back to nature. And that night they disappeared into the mountains with Di Hong as the protector.

The Italians and Spanish have been playing a different game on D Street this week. Apart from dancing their flamenco and cooking some spaghetti, they had also been plotting to turn the D Street Red (behind the curtains). So this week saw a series of reds for the D Boyz as they tried very hard to protect their SENSEX, which was stained red all week long. The D Boyz tried to run for cover and hid as they saw the pillaging and marauding on their Street helplessly. They could not even take flight as the kingfishers on the trees had fallen off due to clipped wings. The D Boyz just hid behind the Sensex and hoped that they would not be harmed. The hammering on the street saw the Sensex fall 800 points to 16371. Last seen, a few of the Boyz had managed to rush into the makeshift shrine of their beloved Elephant God to seek solace a nd protection. Will the Elephant God protect them? Will He rid them of their troubles?

Chinua had so longed to meet Ni Bao before she fled her village, but without saying any words, Di Hong had conveyed his objection through his dark eyes. Chinua had collected an old silk painting of her grandmother, one where she was a young woman with a young child on her knees. Her father swore that it was not him, but Chinxua knew. She had never met her grandmother but knew that she was still around protecting her family, like all dead souls. She would light an oil lamp for her once they were deep in the mountain forests, but did she carry any oil with her? She had no time to worry about this, as she had larger worries that bothered her. Like the sound of the hooves, she could hear in the distance and a shriek or scream that interrupted the otherwise silent night. She had to flee from the village, at least for the night. Di Hong wanted to stay back with the women in the mountains to protect them from the wild animals (in the mountains as well as those that were in the village now). But he had to protect the factory and the village folk as well…

Although the shenanigans of the Europeans and stock markets were not so good this week, life is not so bad. So take this weekend break and enjoy yourselves with your families and friends. Indulge in your interests especially those that make you happy. All tense phases of work or financial markets will pass….. like an Old Chinese Proverb - After every night comes a dawn…..

Indian startups, Can we change the world?

Can your startup change the world for better?....

Of late, there is a lot of talk in the media (the section of the media that covers entrepreneurship) about the shift in focus of the technology entrepreneurs in India from a service-based model to a product based model. It seems Indian IT industry is going through a metamorphosis that would transform it from being an outsourcing destination to being a builder of products that is differentiated by intellectual property and uniqueness. These two articles,  Why Silicon Valley should fear India and Indian Software Startups Similar to Excitement of Late-90s Silicon Valley that was published in Washington Post and the NASSCOM Emerge Forum makes a good case of the point. The articles also highlight the success stories of Indian start-up companies in the product space. All that is good.

Social Media: Is Indian Financial Market Firms Doing It Right

In a previous post, I had talked about adoption of social media among firms in the Indian financial market. Now we look how these firms are using the social media and whether it is the right way to do social media.

Indian financial market firms seem to be mainly using blogs, Facebook, Twitter, Linkedin and Orkut for their marketing activities. The firms selling trade and investment tips use the social media very aggressively than stockbroking firms. Tip sellers are using social media as a broadcast medium, they use blogs to publish their free tips on a daily basis. Most of these firms also have Twitter and Facebook accounts. On Twitter also it is mostly one-sided broadcast of buy/sell calls. On Facebook, the modus operandi seems to be to befriend possible leads and then add them to groups they had created and then post the messages to the group.

Jan Lokpal Bill - What is it and Why we need it?

Anna Hazare, who created a storm in India by fasting unto death in support of the Jan Lokpal Bill, received massive support from all over India and world. People from all sectors and age have come forward for his support and has shown the world when it comes to saving India we are one. Not everyone knows much about the Jan Lokpal bill, so we are trying to explain this in simple words,


What is  Jan Lokpal Bill?
The Jan Lokpal Bill (Citizen's ombudsman bill) is a draft anti-corruption bill drawn up by prominent civil society activists seeking the appointment of a Jan Lokpal, an independent body that would investigate corruption cases, complete the investigation within a year and envisages trial in the case getting over in the next one year.

US downgraded by S&P, What it means to you?

The credit rating agency S&P on Friday lowered the nation's AAA rating for the first time since granting it in 1917. The move came less than a week after a gridlocked Congress finally agreed to spending cuts that would reduce the debt by more than $2 trillion. The promised cuts were not enough to satisfy S&P.

The biggest questions after the downgrade was what impact it would have on already nervous investors. While the downgrade was not a surprise, some selling is expected when stock trading resumes Monday morning across all markets. Following are the possible impacts of S&P down grade.

Dooms day coming? Investors are now hedging against US debt default

US government is just a few days away from a default deadline, as warring politicians have not yet come to an agreement to raise the borrowing limit of the federal government. A few hours back the vote for debt bill in the Congress got delayed. So where are we heading?

As seen in the video given below investors, traders and executives across the globe are now starting to hedge for what was once unthinkable. Banks and money market funds are starting to hoard cash while businesses become even more wary about spending money.

There is also the worry about the impact of a downgrading of US debt by the global credit rating agencies. The US is the largest issuer of triple-A debt in the world, the issuer of the global currency and most bond prices around the world are benchmarked to the yield on US treasuries. Treasures and bonds make up the majority holdings of most of the conservative portfolios and there could be huge portfolio adjustments across the world if the US loses its top-notch rating. People may rush to put their money into safer physical assets like gold, oil and other metals driving their prices high.

Having said all that, I still believe that the US will come out of this unscathed but it might go to the wire. Democrats and Republicans are going to toil it out till the last moment to decide whether to increase income tax and an estate tax of the rich or to cut humanitarian social welfare or both.

A possible U.S. Debt Default and should we be worried?

U.S. Debt Default might cripple the U. S economy and in an interlinked world economy, the ripple effect could be of unimaginable proportion. The impact on other economies, like India, would be grievous. In this post, we are trying to give an overview of the issue and how it might impact the world economy.

Social Media and Indian Financial Market Firms

The importance of social media for business has been established firmly by brands such as  Coca Cola, Ford, IBM, Dell, Burger King and Starbucks to name a few. These companies used social media platforms effectively to sell more products and services, engage and empower their customers to build a fan following, manage brand reputation, run effective marketing campaigns etc.

With more and more people in India coming online and social media gaining more and more online timeshare, Indian business also have started realizing the potential social media. Internet and online users are more significant for financial market firms in the investment, trading and banking sectors. With the push for online banking and online trading, social media becomes the natural choice for financial market firms to engage their customers.

Many Indian firms started off by using Orkut and then shifted to Facebook as the latter started gaining significant market share. Some firms have started setting up Linkedin and Twitter accounts. There are financial advisory and brokerage firms that have their own Youtube channels that post video update about market-related news and developments. Check out the Youtube channel of Kotak Securities and Karvy's Private Wealth channel. A few stockbroking firms have their own blogs, check out the blogs by Angel Broking and Geojit.

All these are steps in the right direction and if done right, social media can reap good rewards for a long time. But the million dollar question here is, Are We Doing it Right?

Why worry? your money in savings bank account is insured now.

Yes, it is true, your savings bank account may be already insured. It's a great initiative by RBI which formed Deposit Insurance and Credit Guarantee Corporation (DICGC) a fully owned subsidiary of RBI (Reserve Bank of India). Do they cover every thing? Almost... they cover all deposits such as savings, fixed, current, recurring, etc. Certain deposits of central and state govt are avoided and how much do they cover? They cover a maximum of 1,00,000 (1 Lakh Rupees) per depositor in a bank. Want to find out whether your bank is insured, please check out this list. 

When exactly DICGC is liable to pay?
If a bank goes into liquidation: DICGC is liable to pay to each depositor through the liquidator, the amount of his deposit up to Rupees one lakh within two months from the date of receipt of claim list from the liquidator.

If a bank is reconstructed or amalgamated/merged with another bank: DICGC pays the bank concerned, the difference between the full amount of deposit or the limit of insurance cover in force at the time, whichever is less and the amount received by him under the reconstruction / amalgamation scheme within two months from the date of receipt of claim list from the transferee bank / Chief Executive Officer of the insured bank/transferee bank as the case may be.


What if, if I have more than one account on different banks?
In that case, each of your accounts will be insured separately.


During the recent subprime crisis in the US, many banks went bankrupt and a similar insurance had played a major role in securing at least some money of the account holder. Even though bankruptcies of major banks in India looks a remote possibility, it can never be ruled out. You will never know which of your friendly neighborhood bank will be the next Leman Brothers in the making.

Please do share us your thoughts on this scheme.

Dogs of Nifty - Revisit after 8 months

In one of our blogs about stock picking strategy, I had shared a very simple stock picking strategy called "Dogs of Nifty", which is an Indian version of the "Dogs of Dow" strategy. To see if the theory  really works, I created a finahub portfolio with an initial investment of rough rupees one lakh. Its been 8 months since I created the portfolio and let us see how the portfolio performs after 8 months. Do remember that, as per the strategy, the portfolio composition can be changed only after 1 year.

Following is the snapshot of the portfolio after 8 months. The portfolio is running a loss of Rs 11,287.60. Only two stocks (hero honda and ITC) are in green, rest of the stocks are in red.

It is still early to say that the portfolio will be in loss and that the strategy failed but still we can analyze the reason for such a bad show as of now. We created the portfolio on Nov 1st, 2010 and as evident from the Nifty index chart given below, Indian markets were soaring at that period of time.

Nifty was around 6100 on Nov 1st 2010 and at 5700 level as of now (11th Jul  2011).  The Dogs of Nifty strategy centers around finding index loggerheads but a bull run is not exactly the time to find loggerheads as valuation of all stocks will be affected by the overall positive market sentiments. In other words the loggerhead stocks were bought at a higher price than what it should have been and that will affect the profitability of the portfolio.

Having said all that, one needs to remember that the markets behave in periodic cycles and the current market phase is different from that of the month of November. So we will have to wait till Nov 2011 to make a meaning full comparison and the final verdict, until then let's keep our fingers crossed.

Let us know what you think about Dogs of Nifty, and it's relevance.

You can hate IE but can't ignore it, not yet!

As developers/web designers it is easy to hate Internet Explorer (IE), the whole Microsoft machinery seems to be geared up in helping you at it. Often you hate it so much that you don't want to take a look at your web site in IE, wishing it did not exist in the face of the earth. This creates issues if you are deploying web applications/websites for the general public. We just ran into one and it is very embarrassing. We added a small menu bar to the top of our website, this was to allow users to sign in to the website from any public page without having to go to the sign in page.
The menu bar is a small innocuous HTML DIV that is positioned on the top right corner of the website. The changes were made in the site template and will affect all most all web pages in the site.
It worked perfectly in Firefox, Chrome, and Opera but we ignored IE :(.  We moved the change into production and send out a mail to all our users. We had also made some UI layout changes so the email made high claims about our new look & feel and how happy we are to get it to you, our dear users.

What we did not know was that the small menu bar had completely ruined our main tabs for the pages in IE 8.0.   IE users that came to our site must have found it to one annoying site to use. The most uneasy thing about the whole episode is that we have a relatively very high IE user percentage, hope we haven't alienated all those users.

Internet Explorer's market share is sinking but the market share it holds right now is still huge. According to NetMarketShare on May 2011, Internet Explorer has 54.27 percent of the browser market, followed by Firefox with 21.71 percent, Chrome with 12.52 percent, Safari with 7.28 percent and Opera 2.03 percent
Clearly, the average Internet user is on IE and if you need them on your websites better take care of them.

So it is OK to hate IE but you just can't ignore it, at least not in next five years...

We are changing - finahub.com

It's us again. We are making some more interesting changes to our site finahub.com for better user experience. Among this, the major change is to allow social sign in and more close integration with facebook.com. We also enhanced the stock picks a section to get stock picks from the people you follow. Major changes are

Hassle free Social Registration / Sign In
Now users can register/sign in using various social tools such as facebook,twitter,google,yahoo, linkedin and openId.

Improved Stock Picks section
Now users can easily see the stock picks shared by the people they follow on their Stock Picks tab itself. They will be able to share stock picks to their followers too.

Scribbles are Messages now
To avoid any possible confusion, scribbles are now renamed to Messages now. Now users can be sent and receive messages from a single place (Messages tab). Previously they had to go to other users public profile to post a scribble.

Close integration with facebook
Apart from facebook login support, now users can Like the marketupdates they see. Users can also recommend public profiles of other users to their facebook friends.

Please check out the site and let us know what you feel about the changes.

Finahub.com
Invest Together

File your income tax returns online in 10 simple steps

It's that time of the year again....all are rushing to file their tax returns. All are trying to find an agent to help them file their taxes, this is because they are dreaded on long queues in front of income tax office. A simple fact we forget here is that you can do it yourself now, that too online, in the comfort of your home/office and is also hazel free. 

Following are the ten steps to file an income tax return on your own.

1. Go to incometaxindia website and register as a new user.
2. The site will ask for your PAN number for registration, please use it while registration
3. Once you click on the 'Register' button you will be taken to a form that will automatically have your address and other details (as submitted by you for getting a PAN). You will just have to put your own password, telephone number, e-mail and click on the 'Submit' button
4. You will reach a  page that has links for e-filing your tax returns for the assessment year 2010-11
5. Once you choose the year, you will be taken to a page from where you can download an excel utility that helps you file online income tax returns.
6. Select which category you belong to (salaried employees with only salary income will have to download ITR-1).
7. Fill in the required data asked for in the excel sheet.
8. Save the excel file on your local machine.
9. Click on 'Submit return' link in the middle on the left-hand side to upload the saved excel file to the income tax of India's server
10. After uploading excel file successfully a form will pop up in your computer's window. This is an acknowledgment that you have filed your returns online successfully. Take a print out of this form and fill in the verification part which duly needs to be posted to your nearest local income tax office.   

Today I filed my IT returns using the above method.
If you have any questions feel free to post it on the below comments section.

Revolution Now - Social Media

It gives me goosebumps when I think about what is happening right now as I write this blog or you reading it. We are going through a period in the history of humankind that is revolutionizing the way we relate, engage and communicate with people across the globe and in space. The barriers of color, cast, culture, and creed fade away in the social web and we all can relate to one another as fellow human beings.

Some of the things that stuck as I watched the video are

• Social media is about people
• It is the number one activity online, an astounding feat when you consider who comes second
• It has an impact on offline behavior
• Transactions for virtual  goods will surpass those for real goods in near feature
• Peer recommendations are the way to go
• Compared to conventional advertising, social media marketing has a very long half-life.
• Facebook is Huge.
• Business will have to adapt to survive.

In order for business to adapt and survive, they would need new tools, new outlook, new planning new methods... Just as Erik Qualman had said, "We don't have a choice on whether we do social media, the question is how well we do it."

That is where finahub.com and other social media integrated applications come in to help you in doing social media well. 

Finahub gets an overhaul

We are excited to let you know about the release of the new and improved version of finahub.com. The changes are part of our ongoing effort to improve the user experience and the value you get out of the site.
As part of the release the finahub.com gets a new look and feel, that has more white space and more efficient use of the screen. Apart from the look and feel we have also introduced some cool new features such as:

Real time Street Talk
Real time street talk helps you keep updated with all things happening in the Indian stock market world in real time. Stock market news from the website across the internet and social networks such as facebook and twitter updates related to stocks and investment are streamed to the security research page in real time.

On individual stock detail page, the real time street talk will have the behave in a more focused manner. It will only show the real time updates related to the stock being displayed on the page.

Improved search interface that shows real time results
A search on finahub will take you to a result page that has an overview of results from four different categories, namely, Market updates, Real time web, Securities, and User are displayed.
Users can use the search filter on the right-hand side of the page to select the category of their choice and see the complete search results for that category.

Market Buzz
Market Buzz shows the latest market updates from all the finahub.com users.

Security Research Page
Security research page gives you on overview of the Indian security market. In incorporates the above mentioned new features and acts as the default landing page. You can access the page with out logging in to the site.


250 Character Market Comments
You don't have to limit your comments on the market to 140 characters now, we have increased the limit to 250 characters. This does not mean that you cannot share your market comments on tweeter. A market comment having more than 140 chars will be posted to the tweeter with the first 130 characters followed by a link to the market update page that has the full content.

Please check out the site and let us know what you feel about the changes.

Nano finally delivering good for Tata

Gone are the days we saw Nano sales going down and down every month. We thought Tata's gamble with the nano was not good enough. But finally, Nano is back or is it the TATA the brand itself.

They sold 8,707 Nano units in March - an increase of 85 percent, compared to March 2010

 Last month, the company reported an increase in sales for small car Nano in rural markets, primarily owing to an expansive distribution and financing network for customers.

Initially, over 80 percent of the bookings were registered from buyers who already owned a car, while the remaining 20 percent were from first-time buyers. The balance is now shifting.

'Last month, over 50 percent of our sales were reported from first-time buyers. We are expecting the numbers to increase by another 30 percent over the next few months.

'Sales are also on a rise in rural markets,' said R Ramakrishnan, vice-president, (commercial, passenger car business unit), Tata Motors.

But how it happened?  The answer is here.

To boost consumer confidence, Tata Motors had announced various schemes, including offering a free four-year/60,000-km extended warranty and comprehensive maintenance contract for new buyers at Rs 99 a month.

Tata Motors Finance also promised up to 90 percent finance for the Nano at low rates.

Volumes for the compact car have picked up since then. In December 5,784 units were sold, in January 6,703, and February recorded sales of 8,262 units. The graph is now going in the right direction as they initially wished it would.

We need to see how much more it can go? Will Nano become the loving baby of the rural masses? Considering the majority of India living on rural area's, it's indeed a huge market up for grabs for the Nano.

5 Reasons Why Gold Loan is Considered A Smarter Choice

Quick processing time

                  The gold loan requires very minimal documentation, so the processing time taken by banks or other financial institution is very small. Normally it will be sanctioned in one or two hours. Some banks even offer to give loans in a very few minutes. Normally the only document you may require is an address proof

Lower interest rates  (around 5-8%cheaper than the personal loan)

                      The interest rates charged for a gold loan is lower when compared to personal loans (around 5-8% cheaper). So it is better to use your asset to work for reducing the interest rate burden.

No usage restrictions

                       Unlike loans such as housing loan, car loan or agricultural loans there are no usage restrictions for the amount you borrow using a gold loan. You can use it for any of your needs.

Emotional attachment may ensure timely payment

                        Most families in India have an emotional attachment to gold. So this might make you morally responsible to repay the loan so that you can get back the gold pledged for a loan.

Acts as a security locker for your jewelry

                         Keeping gold in houses comes with a risk as thieves are always on a lookout to steal gold. If the gold is pledged for a loan, it will act as a secure locker for you. The bank will be ensuring their lockers which they are keeping the gold. So you are sure that you will not lose the value of your gold asset kept as collateral.

Please share your comments below.

Reasons to Love or Hate Mutual Funds

Mutual Fund investments are one of the main investment options of a retail / normal investor. Like any other investment product this have it's own pros and cons. Here we are trying to come up with a list of key points to love or hate mutual funds.

Reasons to Love Mutual Funds

1. Well regulated
1. Mutual funds in India are regulated by SEBI.  This forces the mutual fund company's to be transparent to people. That's why they disclose the offer document which consists of the fees details, entry and exit load details as well as the style and risk of investments.
2. Liquidity
1. Mutual funds are typically liquid investments unless a pre specified lock in period is mentioned. Usually funds take a couple of days to refund the money, once we liquidate the investments. As they always is linked with a banking account, usually it will be credited directly to your bank account, or else it will be an account payee check.
3. Ease of Process
1. If a citizen have a bank account and PAN number you can start investing in Mutual funds. Only thing is fill the form and issue a cheque for your investment.
4.  Asset Management cost is low
1. The cost of asset management is low as they are dealing with  a very large pool of money. The charges comes around 1 to 2 % per year for equity investments. Previously there were entry loads for mutual funds which are removed by SEBI now.

Reasons to Hate Mutual Funds

1. Non convincing management
1. When compared different mutual fund managers, not every one is above average. Some are comparable only to a non professional who charges fees for his lossy work  So one need to study their fund manager before choosing a fund.
2. You dont have any control
1. Unlike you picking your stocks, you are becoming a passenger of an investment bus. Your only option is to just sit and decide when to jump out of it. The speed and stops of the bus will be decided by the fund manager.
3. Hidden Costs
1. They will appear to be zero entry load investments. But in reality they charge you for every transaction they do plus the fund management charges. The sales man tend to not make it clear to the clients. And this will be hidden deep in the offer document which normal clients tend to skip reading.

Please do share your comments.