Bear Phase to continue in near future

With bad news coming from left, right and centre, stock markets in India are likely to have extended bear phase.

To answer when this bear phase ends, we need to look through history of bear phases.

Though history has no certain answer when the bear phase will end, but can give clues about the period of bear phases.

We have taken the data of bear phases after 1990 which is turning point of Indian economy .

It shows that bear phase can extend to maximum of 16 monhs and minimum of 1 month.

Bear phases of more period:

First Bear phase: April 1992 to April 1993 (13 months)

Second Bear phase: Sept 1994 and Jan 1996 (16 months)

Third Bear phase: Feb 2000 to Sept 2001 ( 20 months)

Bear phases with less period:
May 2006 to June 2006 : 1 month

August 1998 to Jan 1999 : 5 Months

But one thing is sure, bear phase provides opportunity for bottom fishing. You can find good stocks at reasonable level during bear phase.

Ex: SBI is havoring around 1200-1400 price, Infosys is around 1400-1600, Satyam at 400-500 shows that it is good time for long term investors, who invest in good stocks at low price.

One thing i can say is that "DONOT LOOSE YOUR HEART, But invest in good stocks and stay invested. Think of Long term and not short term period of 1month or 6 months".

Ultimately you will be the winner in this wonder world of investments

STP : A hassle free investment model for lumpsum Investment

All of us know that Mutual funds offer Systematic Investment Plan or SIP which helps to invest regularly so that we can average the investment.

However there is one more facility offered by mutual funds is STP or Systematic Transfer Plan.

• SIP is for investors who want to invest a particular amount regularly and build portfolio for long term.
• However STP is for investors who does not invest regularly and want to invest a lumpsum amount at one go.

How STP can be done?
1. An investor who wants to invest a lumpsum amount, has to invest in any of the desired debt plan of any mutual fund 2. Inform the mutual fund to transfer a certain sum from his debt fund to designated equity or balanced funds for certain period.

Advantage

• Mutual Fund will not charge Entry load
• Regular Amt is transfered from Debt/Liquid Fund to Equity fund
• Tide over financial market volatility
• No need of committing to pay regularly

This facility is offered by Franklin Templeton, HDFC Mutual Fund, Tata MF, DSP ML MF, Fidelity and DWS MF.

For more Info please e-mail us.

Inflation to rock India growth story boat

Recently i have seen the small article on Inflation which predicts that inflation will touch 14.69% in coming weeks or months if the Inflation figures are charted in graph.

Sharing this info to make sure all are informed about the inflation.

Signs of Bad Financial Advisor

Now that market has corrected, it is the time to look at the hard things and so called financial advisors who give tips on hot scrips and fund in bull run shy away from investors.We take a look at the mutual fund investors in this article.
Signs of bad financial advisors:
Seeking fianancial advise is correct, because investors are not experts in that field. However unlike in US , Investors get free advise from advisors and advisors get commission from the funds. Due to this fianancial advisors misell the products to the investors. Following are some of the signs of bad financial advisor:
1. Advises clients to invest in every NFO that comes in the market.
2. Advises to churn the portfolio frequently
3. Does not take into the consideration the long term fiancial goals of the investors
4. Advises clients to invest only in equity funds
5. Does not encourage the investor to invest in already existing funds
6. Advisor has no balanced fund in his advise.
7. Advises ULIPS as investment instead of term plans
8. Does not advise the client about commodities ( Commodities should be at least 5-10% of your portfolio)
9. Claims that fund will give extraordinary returns like 120-200% in a year
10. Looks to milk the investor and aims to reach his goals than yours.
So whenever your financial advisors shows any one of the signs, then it is time to give pink slip to him.

Investors have to be vary of such financial advisors who advise to invest in every New Fund Offer of mutual funds.

Smart investing strategies to save tax & increase your income

Every year with the start of New Year tax payers flock to investment advisors offices and try to save tax by investing in variety of schemes and maximize their net income.
Employed individuals after their Diwali bonus invest lumpsum amount in tax saving vehicles and lock their money for 3-6 years.

However it would be good if they try to adapt some smart strategies while investing for tax saving purposes which in turn helps to increase their net income.

Don’t invest lump sum:
The above strategy is the first maxim in financial planning. Apart from Post office & Bank Deposits all other investment vehicles like Mutual funds, ULIPS are based on market conditions. Investors by investing monthly some amount can tide over the market ups & downs.

Purchase NSC’s:
National Savings Certificates of Post Offices have lost their sheen as they are now offering interest rate of 7-8% which is minuscule when compared to returns of Mutual funds & ULIPS.
However if the investors purchase NSC’s they can devise a prudent plan that can avoid the money to be locked for 3-5 years. The plan goes like this:
“Purchase NSCs from any post office for any amount let say Rs 50,000 and take Overdraft facility from any other Bank. On Overdraft facility banks provide you drawing limit and you can withdraw up to the drawing limit. Draw the money and invest in mutual funds/ Insurance schemes regularly”.

The benefits of the strategy are:
1. You will invest the money for tax purposes
2. You will not lock your money for 3-5 years
3. If you pay Rs 5000 per month within 10 months your overdraft will be over and again
you use that money for the next year tax saving purposes.

In this way two birds are killed with one shot.

Please let us know your feedback on the above strategy.