Sunday, October 30, 2011

Top 10 Tax Saving Mutual Funds

This is a list of top 10 Tax Saving Equity Mutual Funds which you can invest in. This year hasn't been particularly good for the Equity Markets and hence you will find most Equity Mutual Funds gave a negative return if you look at their 12 month return. However if you consider a 3 year return (Tax saving funds have a 3 year lock in), the top 10 funds have given an Annual Compounded Return of over 30%.

Thursday, October 27, 2011

CTC! What happened to my Salary?

Scene: The day of placements at your b-school and there is palpable tension in the air and you finally hear the news – the XYZ Company has offered you a job and you have been offered an annual package of Rs 11,00,000 ! You blink for a moment and realize that you earn 1.1 million rupees annually! Not bad considering the situation the economy is in! And you slowly start putting on the airs of a new Rupee Millionaire till you receive your first pay check in hand. You see that you have got only Rs 60,000. Doesn’t that mean you are just receiving 7.2 Lakhs? Or considering Tax deductions, where did my 2.8 - 3 lakhs go? You start cursing the HR and the inefficient payroll department of your company and decide to give a earful to your payroll department, when they explain the situation in one word – ‘CTC’! CTC? It is not even a proper word, it’s an abbreviation! And yet it is supposed to explain where fantastic sums of money from your salary have disappeared!

Wednesday, October 26, 2011

Pre-pay my Housing & Education Loan?

My friend Sandeep and I were having lunch today when the news flashed across the screen – ‘RBI has hiked interest rates again by 25bps’. With the central bank hiking the interest rates every few months, loans were getting costlier and our salaries were not increasing at that rate! After seeing this news we got into a discussion as to whether it made sense to pre-close the education loan that he had or should he not pre-close it since he was receiving tax benefits. This is a question a lot of people ask, especially among those who have a housing loan since housing loans give higher tax breaks. This article seeks to demystify this confusion among several people as to whether it makes sense to pre-close a loan if they come into some additional money.

Sunday, October 23, 2011

No more Penalty for Home Loan Pre-Payment in India

The Reserve Bank of India (RBI) is in the process of directing banks to stop charging penalties for repayment of home loans ahead of schedule to ensure a level-playing field between banks and housing finance companies (HFCs). RBI’s move follows a similar directive to Housing Finance Companies (HFCs) by their regulator, the National Housing Bank (NHB), earlier this week. The NHB notification asked HFCs not to charge pre- payment levy or penalty for pre-closure of housing loans under two situations — pre-closed through any source, where the housing loan is on floating interest rate basis; and loans pre-closed by the borrowers out of their own sources of funds, where the housing loan is on fixed interest rate basis.

Friday, October 21, 2011

Life Insurance and why You should buy one

Several investors especially those who are young, do not see the need to purchase life insurance. They consider it a waste of money since they do not get any ‘returns’ from the money they spend in buying insurance. Before a person starts investing any money, he/she should first look at protecting their current assets. Insurance is an instrument which saves you & your family from a catastrophic financial loss. Unless you consider yourself immortal and are sure that no accident or fatality would occur to you, you should consider buying insurance. On the other hand if your family is dependent on your income or if you have any debts/loans that you need to pay off, Life Insurance is no longer an option but becomes mandatory.

Monday, October 17, 2011

Joke:How the Stock Markets work

A really funny illustration that I saw on Facebook but market sentiments function something like this!

Saturday, October 15, 2011

Should I buy Gold at these high prices?

“After almost a dream run of gold prices, does it make sense to invest in Gold now? Will the prices of gold rise even higher or is this a bubble just waiting to explode?” – this is a small snippet from a conversation I had with a friend who recently came into some money and was looking at parking it somewhere. He was scared of equities and most of his money was in Fixed Deposits. Investing in gold was something which had caught his fancy but he was unsure, especially after gold corrected about 18% from the highs it set.

Friday, October 7, 2011

How to time the markets right?

This article, contrary to its title will NOT teach you to time the market. And why is that? Simply because, you cannot learn to time the markets perfectly! Warren Buffet the world’s most successful investor famously said – “I know what events will unfold in the markets but I do not know when those events will unfold”. Switch on your television and check to see what each expert thinks the Stock Market would close at. Each self-proclaimed expert has a different view and when you have a 100 views, one of them is bound to be correct!

“Sir, this is a good time to enter the market. The market has almost bottomed out!” - Sound familiar?