Financial advice by experts for investment

Bikram and Veena Moitra have been saving for their financial goals for the past 15 years. Their son is expected to join college next year and Bikram wants to keep the required funds ready. They feel they are ready to buy their second house, though Bikram would like to postpone it till his son's admission process is complete. Veena is also set to start her music school. Bikram has been holding a lot of the funds frominvestments that have matured in short-term deposits. How can he best plan his finances at this stage so that these can be used for the intended purpose?

Solution1.Write down ..Amount and Tenure details for his son The funds for his son's education, where he knows exactly when he needs it, can be invested in deposits, bonds, fixed maturity plans and debt funds in such a way that the tenure matches the time at which he needs them. 2. The amount for his second home and for Veena's music school, which are not yet definite in terms of the tenures, should be invested in products that are flexible .The best option for these goals would be open-ended debt funds with recommended investment horizons that suit his ballpark time estimates for these goals. He should structure the investments in a way that maximises his post-tax payouts.

Badla system(banned in 1996 after introduction of futures contract)

Suppose A has to buy 100 shares of a company at Rs 50 each. But he doesn't have enough money now. But the value of shares is very less now, so in order to buy the shares at current prices, A can do a badla transaction. Now there is a badla financier B who has enough money to purchase the shares, so on A's request, B purchases the shares and gives the money to his broker. The broker gives the money to exchange and the shares are transferred to B. But the exchange keeps the shares with itself on behalf of B. Now, say one month later, when A has enough money, he gives this money to B and takes the shares. The money that A gives to B is slightly higher than the total value of the shares. This difference between the two values is the interest as badla finance is treated as a loan from B to A. The rate of interest is decided by the exchange and it changes from time to time.

Why us will survive the end of globalization

As globalization fades, the U.S. will still be able to deal with its economic issues. Key policies include maintaining low interest rates to reduce the cost of servicing debt and allowing higher levels of borrowings to be sustained in the short run. Low rates and quantitative easing measures devalue the dollar, reducing the level of government debt by decreasing its value in foreign currency terms. A weaker dollar boosts exports, reducing trade imbalances. Stronger exports are driven by cheaper prices combined with American dominance of key industries, such as technology and software, pharmaceuticals, complex manufactured products (aerospace, defense hardware, heavy machinery), entertainment and services.

A weaker dollar also lowers the cost base of domestic production, which encourages a shift of production, manufacturing and assembly work back to the U.S.. This should assist in creating the jobs needed to reduce unemployment. Stronger growth and lower unemployment will in turn help to trim the large U.S. budget deficit. Overall, a shift to a more closed economy is consistent with Americas natural isolationism, focused on aggressively protecting the nations economic self-interest and expanding U.S. power and influence. Those interests now logically dictate the embrace of autarky. As William G. Hyland, Deputy National Security Advisor to former President Gerald Ford and editor of Foreign Affairs magazine, noted: Protectionism is the ally of isolationism. Satyajit Das is a former banker and author of Extreme Money and Traders, Guns & Money.

While buying gold you need to keep these points in mind 1. Purity mark/number The purest form is of 24 karats and it's assigned a score of 1000. So 22-karat gold gets a score of 916. The hallmarking centre imprints this on the jewellery 2. Hallmarking centre's logo In India, 200 hallmarking centres have been opened. They have to etch their respective logo along with the purity number 3. Jeweller's logo Helps when you've lost your bill. Identifies brand/shop easily in case you need to complain to BIS or one of its hallmarking centres 4. Year of manufacture Years denoted in alphabets. A for 2000 to R for 2013. Difficult-to-distinguish letters such as I, L & J are omitted 5. BIS triangle Etched by the hallmarking centre

How do punters play strategicaly..an example from economic times dated 15 may 2013

Here's how traders hope the bet could work. A punter shorts one lot (25 shares) of Bank Nifty around Tuesday's high at 12600 and buys a Nifty lot (50 shares) near the day's closing at 6000. The ratio currently stands at 2.1 (12600/6000). The total price of taking exposure is Rs 6.15 lakh. However, since futures are a leveraged game, the punter pays just 12% of the total price, or Rs 73,800 (6,15,000x12/100). If the Nifty falls to 5800, he loses Rs 10,000 of his margin (5800x50 = 2,90,000). But since the Bank Nifty is 1.5 times more volatile than Nifty it falls to 11970 (base value of Bank Nifty is double that of Nifty, the fall in Bank Nifty is more than 600 points). He thus gains Rs 15,750 on Bank Nifty, resulting in a net gain of Rs 5,750 (15750-10000). That works out to a 7.8% gain. "Playing the Bank Nifty to Nifty ratio is one
way to make money but it could also be fraught with risk."

Remember the 60(E),30(D) 10(G) rule for those who are not having any gaps in their financial plans.

"Investors should have a term cover of 6-8 times their annual income," says Dhawan.

Govt, RBI are again getting it all wrong on Gold

The Indian consumer thats us is currently public enemy No. 1. We are apparently responsible for leaving the nations balance sheet in a shambles with our insatiable lust for gold.If government and the Reserve Bank of India (RBI) had their way, anyone spotted buying gold would be flayed. Luckily, we are still not that sort of country.But both are doing everything possible to punish us. We cant wear our own jewellery above Rs 1 lakh on an overseas holiday. We cant buy coins easily. The paperwork at a jewellery store is designed to turn away everyone except the most determined. The higher customs duty intends to make gold prohibitively expensive. Plus, jewellers are being bludgeoned out of business. They cant import gold. Gold will be rationed through government-owned banks, which will cater only to genuine demand. And they are being threatened with draconian laws.Are we really to blame? Who started the gold coin culture in India? Not the family jeweller, not the consumer. It was GoI and RBI that encouraged high-street banks, and even the post office, to start peddling gold coins about five years ago.Banks did their job so enthusiastically that, soon, buying a gold coin was easier than opening an account. It was GoI that had okayed exchangetraded funds that allow punters to buy limitless gold on paper. GoI and RBI blessed gold loan companies as microfinance by

another name.Neither pondered the impact of these moves on consumer behaviour and the economy. Imported coins dont create local jobs, dont allow local value addition and dont open opportunity to earn foreign exchange through exports. Yet, they were promoted aggressively.Well, the chickens have come home to roost. Now that the marketing is clearly a huge success, and we have learnt to appreciate even the tiny 5-gm coin, it is too late to complain.Moreover, why should GoI and RBI complain? Petrol is the largest item on our import bill at $125 billion. But no one is suggesting we shut down car factories, and go back to the tonga and cycle-rickshaw.As C Rangarajan, the Prime Ministers economic advisor, says in his overview of the economy, Oil is a big factor in our strained external payments, but by no means the surprising one. We have accepted that petrol is vital for modern life.Cooking oil is the third-largest item on our import bill. Till the early 1960s, no one in India had tasted palmolein. Even after it was introduced by Indira Gandhi in ration shops, consumers shunned it. Forty years later, it is Indias top-selling oil. The governments marketing efforts paid off. We have acquired a taste for it and spend a cool $10 billion annually. In both cases, the government has accepted that we urgently need these sources of energy. Instead of trying to beat down consumer demand, the government is trying to find other solutions to augment petrol and cooking oil supply. That is wise.So, why does this wisdom blow a fuse when it comes to gold? Senior economists, policymakers and RBI all have acknowledged that gold is popular because it is the only asset that the poor can one day aspire to buy. There is nothing in the market that can replace it.More important, gold in India is about the daughters share in family wealth, the perfect wedding gift, our idea of beauty and high status. It is part of our cultural DNA. It makes us who we are. A five-fold rise in prices in as many years has not dented our willingness to spend on it. Ideally, the government should embrace this love and find ways to use it profitably. Dubai doesnt produce any gold. Yet, it has been able to promote itself as the ultimate destination for buying and trading gold.London doesnt produce gold either. But it has always been the hub for price discovery and has some of the safest vaults on the planet.All this takes gumption and a farsighted vision of what gold can really do for the economy.Instead, GoI and RBI are treating us like addicts. They are hoping that giving us the cold turkey will set things right. But you can never fight human nature. Clampdown on gold will be like the prohibition on liquor in Gujarat. Consumers and smugglers will have the last laugh.

MARC FABER(Contrarian)
Famous for his approach to investing, Marc Faber does not run with the bulls or bait the bears but steers his own course through the maelstrom of international finance markets. In 1987 he warned his clients to cash out before Black Monday on Wall Street. He made them handsome profits by forecasting the burst in the Japanese Bubble in 1990. He correctly predicted the collapse in US gaming stocks in 1993; and he foresaw the Asia-Pacific financial crisis of 1997/98 and the resulting global volatility.