Wednesday, January 8, 2014
Wednesday, January 16, 2013
Agneepath- Fire Walk
वृक्ष हों भले खड़े
हों घने, हों बड़े
एक पत्र छाँह भी
मांग मत! मांग मत! मांग मत!
अग्निपथ! अग्निपथ! अग्निपथ!
तू न थकेगा कभी
तू न थमेगा कभी
तू न मुड़ेगा कभी
कर शपथ! कर शपथ! कर शपथ!
अग्निपथ! अग्निपथ! अग्निपथ!
यह महान दृश्य है
चल रहा मनुष्य है
अश्रु-स्वेद-रक्त से
लथ-पथ! लथ-पथ! लथ-पथ!
अग्निपथ! अग्निपथ! अग्निपथ!
Vriksh hoN bhale khade,
hoN ghane hoN bade,
Ek patra chhaNh bhi
maang mat, maang mat, maang mat,
Agnipath, Agnipath, Agnipath.
Tu na thakega kabhi
tu na thamega kabhi
tu na mudega kabhi,
Kar shapath, Kar shapath, Kar shapath,
Agnipath, Agnipath, Agnipath.
Ye Mahaan Drishya hai,
Chal raha Manushya hai,
Ashru, swed, rakta se
Lathpath Lathpath Lathpath..
Agnipath, Agnipath, Agnipath.
Even if there be trees (around)
shady and huge,
for the shade of a single leaf
don't ask, don't ask, don't ask..
(Walk on the) Path of Fire, (Walk on the) Path of Fire..
You will never stop,
You will never halt,
You will never turn,
Take this oath, take this oath, take this oath
(Walk on the) Path of Fire, (Walk on the) Path of Fire..
It's a great scene,
The man is walking,
in tears, sweat, and blood,
soaked, swathed,
(Walk on the) Path of Fire, (Walk on the) Path of Fire..
Discover Your Hidden Powers. Experience a source of High Energy and Self-realization.
Tuesday, January 15, 2013
वृक्ष हों भले खड़े
हों घने, हों बड़े
एक पत्र छाँह भी
मांग मत! मांग मत! मांग मत!
अग्निपथ! अग्निपथ! अग्निपथ!
तू न थकेगा कभी
तू न थमेगा कभी
तू न मुड़ेगा कभी
कर शपथ! कर शपथ! कर शपथ!
अग्निपथ! अग्निपथ! अग्निपथ!
यह महान दृश्य है
चल रहा मनुष्य है
अश्रु-स्वेद-रक्त से
लथ-पथ! लथ-पथ! लथ-पथ!
अग्निपथ! अग्निपथ! अग्निपथ!
Vriksh hoN bhale khade,
hoN ghane hoN bade,
Ek patra chhaNh bhi
maang mat, maang mat, maang mat,
Agnipath, Agnipath, Agnipath.
Tu na thakega kabhi
tu na thamega kabhi
tu na mudega kabhi,
Kar shapath, Kar shapath, Kar shapath,
Agnipath, Agnipath, Agnipath.
Ye Mahaan Drishya hai,
Chal raha Manushya hai,
Ashru, swed, rakta se
Lathpath Lathpath Lathpath..
Agnipath, Agnipath, Agnipath.
Even if there be trees (around)
shady and huge,
for the shade of a single leaf
don't ask, don't ask, don't ask..
(Walk on the) Path of Fire, (Walk on the) Path of Fire..
You will never stop,
You will never halt,
You will never turn,
Take this oath, take this oath, take this oath
(Walk on the) Path of Fire, (Walk on the) Path of Fire..
It's a great scene,
The man is walking,
in tears, sweat, and blood,
soaked, swathed,
(Walk on the) Path of Fire, (Walk on the) Path of Fire..
Discover Your Hidden Powers. Experience a source of High Energy and Self-realization.
Monday, January 14, 2013
Friday, January 11, 2013
5 Things To Know About Asset Allocation
With literally thousands of
stocks, bonds and mutual funds to choose from, picking the right investments
can confuse even the most seasoned investor. However, starting to build a
portfolio with stock picking might be the wrong approach. Instead, you should
start by deciding what mix of stocks, bonds and mutual funds you want to hold -
this is referred to as your asset allocation.
What Is Asset Allocation?
Asset allocation is an investment
portfolio technique that aims to balance risk and create diversification by
dividing assets among major categories such as cash, bonds, stocks, real estate
and derivatives. Each asset class has different levels of return and risk, so
each will behave differently over time. For instance, while one asset category
increases in value, another may be decreasing or not increasing as much. Some
critics see this balance as a settlement for mediocrity, but for most investors
it's the best protection against a major loss should things ever go amiss in
one investment class or sub-class.
The consensus among most
financial professionals is that asset allocation is one of the most important
decisions that investors make. In other words, your selection of stocks or
bonds is secondary to the way you allocate your assets to high and low-risk
stocks, to short and long-term bonds, and to cash on the sidelines.
We must emphasize that there is
no simple formula that can find the right asset allocation for every individual
- if there were, we certainly wouldn't be able to explain it in one article. We
can, however, outline five points that we feel are important when thinking
about asset allocation:
1. Risk Vs. Return
The risk-return tradeoff is at the
core of what asset allocation is all about. It's easy for everyone to say that
they want the highest possible return, but simply choosing the assets with the
highest "potential" (stocks and derivatives) isn't the answer. The
crashes of 1929, 1981, 1987, and the more recent declines of 2007-2009 are all
examples of times when investing in only stocks with the highest potential
return was not the most prudent plan of action. It's time to face the truth:
every year your returns are going to be beaten by another investor, mutual
fund, pension plan, etc. What separates greedy and return-hungry investors from
successful ones is the ability to weigh the difference between risk and return.
Yes, investors with a higher risk tolerance should allocate more money into
stocks. But if you can't keep invested through the short-term fluctuations of a
bear market, you should cut your exposure to equities.
2. Don't Rely Solely on Financial
Software or Planner Sheets
Financial planning software and
survey sheets designed by financial advisors or investment firms can be
beneficial, but never rely solely on software or some pre-determined plan. For
example, one old rule of thumb that some advisors use to determine the proportion
a person should allocate to stocks is to subtract the person's age from 100. In
other words, if you're 35, you should put 65% of your money into stocks and the
remaining 35% into bonds, real estate and cash.
Stock Watch List: CTLE
But standard worksheets sometimes
don't take into account other important information such as whether or not you
are a parent, retiree or spouse. Other times, these worksheets are based on a
set of simple questions that don't capture your financial goals. Remember, financial
institutions love to peg you into a standard plan not because it's best for
you, but because it's easy for them. Rules of thumb and planner sheets can give
people a rough guideline, but don't get boxed into what they tell you.
3. Determine Your Long- and
Short-Term Goals
We all have our goals. Whether
you aspire to own a yacht or vacation home, to pay for your child's education
or to simply save up for a new car, you should consider it in your asset
allocation plan. All of these goals need to be considered when determining the
right mix.
For example, if you're planning
to own a retirement condo on the beach in 20 years, you need not worry about
short-term fluctuations in the stock market. But if you have a child who will
be entering college in five to six years, you may need to tilt your asset
allocation to safer fixed-income investments.
4. Time Is Your Best Friend
The U.S. Department of Labor has
said that for every 10 years you delay saving for retirement (or some other
long-term goal), you will have to save three times as much each month to catch
up. Having time not only allows you to take advantage of compounding and the
time value of money, it also means you can put more of your portfolio into
higher risk/return investments, namely stocks. A couple of bad years in the
stock market will likely show up as nothing more than an insignificant blip 30
years from now.
5. Just Do It!
Once you've determined the right
mix of stocks, bonds and other investments, it's time to implement it. The
first step is to find out how your current portfolio breaks down. It's fairly
straightforward to see the percentage of assets in stocks versus bonds, but
don't forget to categorize what type of stocks you own (small, mid or large
cap). You should also categorize your bonds according to their maturity (short,
mid or long term). Mutual funds can be more problematic. Fund names don't
always tell the entire story. You have to dig deeper in the prospectus to
figure out where fund assets are invested.
The Bottom Line
There is no one standardized
solution for allocating your assets. Individual investors require individual
solutions. Furthermore, if a long-term horizon is something you don't have,
don't worry. It's never too late to get started. It's also never too late to
give your existing portfolio a face-lift. Asset allocation is not a one-time
event, it's a life-long process of progression and fine-tuning.
Saturday, December 8, 2012
How to secure your child's future?
How to secure your child's
future?
On at least one aspect, I think
several of the insurance company advertisements have got it spot on. The
initial celebrations on the arrival of the child gradually leads to a more
sober reflection on how best to ensure his / her comfortable upbringing and education.
Doubtless, finances are but one aspect of this concern; but they are an
important one! Moreover, they are probably much easier addressed than some of
the softer and other cultural aspects of parenting.
INVESTMENTS
Investment is distinct from
Savings
Savings simply mean you set aside
a portion of your income for future use. Yet, it is (careful and planned)
investing that makes maximum use of these savings and optimizes your portfolio
in later years. This is especially important since inflation tends to erode the
purchasing power of money over a period of time. A headline inflation of 6%-7%,
actually translates into a lifestyle inflation of 10%. Thus, if your money is
lying in a deposit fetching 7% interest rate, you are actually eroding wealth!
�India� is the
best growth story to invest in
In contrast, with the medium to
long-term prospects of India�s growth being as strong as
they are, the long-term returns on equity can be assumed to be 15%. Thus, this
provides an effective way to not get left behind the growth story that is India.
In addition, investing in equity as an asset class, if well researched and
carefully done, enjoys various benefits, such as:
High liquidity, to withdraw money in
desired quantity whenever needed
High flexibility in terms of investing as
and when funds are available
Favourable tax treatment (especially
compared to real estate and fixed deposits)
Low transaction costs
High degree of transparency in knowing how
your corpus grows
The power of compounding
Returns on investments exhibit
the effect of compounding. Very simply put, it means that the returns earned on
the investment in the first year, gets added to the corpus in subsequent years
and fetches its own returns. Thus, in the illustrative returns shown above, if
you invest Rs. 1 crore today in equity @15%, the corpus would grow to Rs 4
crore in 10 years time. In contrast, in a fixed deposit @7%, the corpus would
only be Rs 2 crore in 10 years time.
Index investing
Investing in the index is
possibly the best long-term way to benefit from the India
growth story. You can invest in the index either one-time, or systematically as
you earn more, or a combination of these. The benefit of index investing is the
low transaction cost and low need for research involved. Thus, for those not
very comfortable with the markets, or with those having no time to do extensive
research, it is also a good starting point to gain familiarity with the working
of equity markets.
Once you are more comfortable
with equity markets and with how an investment portfolio works, you can
consider allocating funds to more actively managed portfolios as well. These
require much more research and active management, but at the same time have the
potential to generate higher returns than the index by leveraging existing
market conditions.
Trust formation
Very often we come across
customers desirous of making a trust in each of their children�s
names. In India,
unlike in some other countries, such trusts by themselves have no special tax
benefits. Yet, they often have softer benefits such as helping mentally
allocate resources for each child�s milestones, monitor each
set of investments clearly, etc. Given the formalities and procedures around
trust formation, maintenance and reporting, we would recommend this to people
having a large corpus only. With most others, the money may be managed through
mental accounting alone, without going through the legal procedures around
trust creation.
LIFE INSURANCE
The concept of life insurance is
to secure the lifestyle and indeed the financial well being of the family in
the unfortunate event of the breadwinner not being around. Due to cultural
reasons, this often brings unpleasant thoughts, and hence the subject of
insurance gets pushed under the carpet.
However, we would rather look at
it as a means to lead a more secure and worry-free life. While the emotional trauma
of loss of a family member is unavoidable, insurance atleast spares the
financial burden that this could bring. Thus, an insurance of five to seven
times annual earnings is a useful benchmark to have as amount of life
insurance.
A term plan is a simple and
effective life insurance policy. Very roughly, the annual premium for a healthy
35-year old, for a life cover of Rs. 1 crore, should amount to about Rs.
45,000. There are two important points to note here: the earlier you start the
life cover, the lower the premium rate you can lock-in (once locked-in, the
premium does not ever change). Secondly, it is a huge benefit to start life
insurance when one is healthy and unaffected by any chronic ailments. This
ensures much lower premiums, and a hassle-free claims process.
We would, at this stage, advise
against the more complicated unit linked products; or the typically low
yielding �traditional� insurance products. These
are useful for investors only in very specific cases, and only when the
investors have understood the cost-benefit equations of these plans very
carefully. The insurance agents very seldom do such elucidation; and hence it
may be useful to stay away from these for a while.
KEY NEXT STEPS
Just as it is impossible to learn
swimming without jumping into the pool, we believe a start has to be made
sometime along both these dimensions. And there is no better time than today!
Thus, we would recommend a simple
starting point for parents thinking about their child�s future:
Invest a lump sum in an index
fund, and plan to systematically build this through authorising smaller
additional investments monthly. You can look at research to see which are the
good funds, and keep your portfolio under periodic monitoring.
Insure your life, for atleast five
times your annual earnings. Again, a simple shopping expedition should get you
the best term insurance cover applicable for your age and health.
- Ramganesh Iyer
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