Archive for March 4, 2008

Investing-Double, Double, TOIL & TROUBLE

Publication: The Times Of India Mumbai; Date: Mar 18, 2008; Section: Your Money; Page: 42
In stormy markets, it’s better to stay alert and rational than to bank on prophesies
IN the last couple of months, several US investment banks, insurance companies and other institutions have reported big black holes in their balance sheets. A couple of weeks ago, American International Group reported a net loss of $5.29 billion for the October-December quarter on $11.5 billion that soured amid the subprime crisis. This is the biggest loss posted in any quarter by AIG, the largest US insurer, and also the biggest red-ink figure reported in the US insurance business. It’s a ironic that insurance companies, which are in the business of managing risk and which should have had control mechanisms in place, should make irresponsible investments and run up astronomical losses. Even more shockingly, some short-term cash management funds in the US also have subprime assets.

The big canvas of tax investments

Publication: The Economic Times Mumbai; Date:2008 Mar 12; Section:Personal Finance; Page Number: 23

Tax planning is always seen with an isolated view of saving tax. This myopic view hurts individuals in the form of lower post tax income, higher costs and a hodge-podge of investments accumulated over a period. Contrary to this approach, tax planning should be seen within the broader framework of financial planning. Hence, one must start this process from April 1. However, for the late bloomers, there is still time and rather than rushing into it, take a holistic view of your liquidity needs, goals, return objectives and risk profile and then make a prudent choice. Here are some of our thoughts on how one should look at tax planning:

• Are you contributing to EPF?

• Have you taken a home loan?

• Are you paying your children’s school fees?

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Creating a safe corpus

Publication:  Business Standard, Mumbai;   Date: March 9, 2008;    Section: Behavioural Finance;  
Once you have done the hard work of accumulating a nice little kitty for yourself, rebalance the portfolio in favour of safer instruments to be insulated from market risks. 
 
Anil Shah, a businessman in his late fifties, is a seasoned investor. He has been rather successful in his investment strategies for the past few years. 
 
The result: a good corpus both for the family and his business venture. In fact, he is in a financial situation where he can look at “safety-first” instruments to park his wealth and retire.  
 
» Read more..

The Chaos theory of Investing

Publication: The Times Of India Mumbai; Date: Mar 4, 2008; Section: Your Money; Page: 41
Is a vast and complex portfolio—with incalculable risk—worth it if you can’t predict the outcome?
JAI MEHTA is an astute fellow. This 58-year old metal scrap trader comes from a modest background, and is humble in his daily dealings with people from all walks of life. But, as I found out, he was capable of surprising pigheadedness when it came to investing decisions—those were based on what had worked for him in the past, rather than onsound principles of investing or market fundamentals. Nothing you could say would get him to budge.