Penny wise , Pound foolish

One of my friend is a very alert guy when it comes to handling finances. He always goes for a bargain buy ( even for vegetables), plans his tax on time and so on. But when it comes to a buying a home, he was not that prudent . This is the mistake that most of middle class makes. he booked a flat almost to years ago with a reputed builder in Bangalore and still waiting for a day to get the possession. He keeps paying his EMI and has lost already lot of money in terms of the rent he is paying and pre-EMI interest for which he cannot claim tax benefit.
Although, the builder has been postponing the dates nobody has ever dared to sue the builder. This is a typical scene where one prudently saves everywhere and looses out in a big way in buying a liability ( yes!! your first residence is going to be a liability..If you don't agree , I am fine).
In this context found two great posts on some fellow bloggers post wrt buying homes. They are a must read , if you are planning to buy an house.
I sincerely acknowledge the great articles by these bloggers.

Simple Indian Food ^^^^^Microwave food ^^^^^^^^^^Easy crafts

NFO : ICICI Prudential Focused Equity Fund

NEWS -The latest offering from the ICICI Prudential is an open-ended diversified equity fund - the “ICICI Prudential Focused Equity Fund”.The fund’s investment strategy will be to invest in 20 large cap companies from the top 200 stocks listed on the NSE on the basis of market capitalisation. If the total assets in this fund crosses Rs.1000 crore then more than top 20 large companies would be added to the portfolio.
Scheme Details
Issue Opening Date : April 8, 2008
Issue Closing Date : May 7, 2008
Mutual Fund Family : ICICI Prudential Asset Mgmt.Co. Ltd
Fund Class : Equity Diversified
Fund Type : Open-Ended
Investment Plan : Growth
Fund Manager : Prashant Kothari
Entry Load : 2.25 %
Exit Load : 1.00 %
Benchmark : S&P CNX Nifty
Minimum Investment : Regular Plan - Rs. 5000, Institutional Plan - Rs. 10 crore.
The fund has a straight forward strategy to invest in the top 20 companies from the NSE index. The fund is likely to deliver returns and behave like a large-cap index like Sensex and Nifty. The fund might be a reasonable choice for its predictable strategy and relative safety of the mega-cap stocks. This fund could be a worthy consideration for NFO fans, seeking an opportunistic bet on the market turnaround which can especially benefit this fund.

Views - The fund theme looks similar to Sundaram select focus , JM core 11 and other such funds which focus on a smaller number of stocks for investment. Since, the focus is on only 20 stocks there is a high risk- return probability. The focus is going to be on large caps. So, the risk is reduced to some extent.

SIP in a focus fund would be a better strategy than a bulk investment in this volatile phase. If you are not too keen on ICICI, you can choose from a proven focus fund to invest. Prefer direct investment in MF, as this will avoid incurring entry load on your investment.

DASAVATHARAM - watch the splendour

Investment ideas and resources online

It has been quite a while since I switched over to investments books online. Here's a list sites that I frequently visit.

Dailies ~ - Dont miss the Sunday edition - Monday investor's guide is my favourite
livemint .com
Magazines ~

investment sites online, investment blog india, list of websites on personal finance , investment, tax planning, personal finance investment blog, wealth creation.

Advertisements (to loot you???)

The very purpose of advertisements is to build a larger than life image of the products that is being advertised.
Insurance advertisements are most funny in that sense...1) The daughter gets admission in a university abroad , father surprises her by showing her the education policy which has multiplied enough to finance her needs 2) Dreams like owning a book shop or a house in goa can be fulfilled by investing in insurance policies 3) Father planning his retirement and being independent by investing in insurance.
On the outset, everything seems logical . But ,why the hell should one invest in equity/debt through an Insurance ( ULIP) policy.??. Insurance is definitely essential to protect the family against unforeseen events. It is essentially to mitigate the risk ( of uncertainity to life or health). But shouldn't become a major investment avenue. I am waiting for a day to see where I see some real sense in Insurance ads. ( Ads which show Insurance taken purely to cover risk)
If you use ULIP as an investment tool, you are really not putting your money to perfect use. it's better you don't club insurance and investment. There are always better ways to invest in equity/ Debt...( Like SIP in MF , POMIS, FD, etc)


Thematic funds from Sundaram

News-Sundaram BNP Paribas MF launches Select Thematic Funds Entertainment Opportunities (On Apr 16 , 2008)
Sundaram Mutual Fund launches another open ended thematic equity fund, Sundaram BNP Paribas Select Select Thematic Funds Entertainment Opportunities. The investment objective of the scheme would be to achieve long term capital appreciation by investing primarily in the equity and equity related instruments of companies that focus on opportunities in the entertainment business. As a thematic fund, the portfolio will be more diversified than a sector fund and may not be as diversified as a typical equity fund. The fund will invest 65-100% in equity and equity related instruments in the targeted sector/theme. It will have a 0-35% investment in equity and equity-related instruments other than the targeted sector/theme. There will be 0-15% investment in fixed income and money market instruments. Equity investments may also include overseas securities, up to a maximum of 35% of net assets of the scheme. The NFO is open for subscription from 24 April, 2008 and closes on 20 May, 2008.

Sundaram BNP Paribus MF launches Select Thematic Funds Financial Services Opportunities (On Apr 16 , 2008)
Sundaram Mutual Fund launches an open ended sectoral equity fund, Sundaram BNP Paribas Select Thematic Funds Financial Services Opportunities. The investment objective of the scheme is to seek long-term capital appreciation by investing predominantly in equity and equity related securities of Indian companies engaged in the banking and financial services. The fund will invest 65-100% in equity and equity related instruments predominantly Indian companies relevant to the theme. It will have a 0-35% investment in equity and equity-related instruments outside of the theme. There will be 0-15% investment in fixed income and money market instruments. Equity investments may also include overseas securities, up to a maximum of 35% of net assets of the scheme. The new fund offer is open for subscription from 17 April 2008, and closes on 14 May 2008. source- MFI site

Views- Financial services and Entertainment are potential growth sectors in India . Those who have the adequate exposure to diversified equity portfolio can allocate a small portion to these funds. If you are a new investor, better to start with some proven diversified equity funds.

AIG Investments launches the AIG World Gold Fund (On Apr 7 , 2008)

News - Source MFI-AIG Investments has announced the launch of the AIG World Gold Fund – an open ended Fund of Funds Scheme investing in companies engaged in the extracting, processing and marketing of gold through an international fund. The primary investment objective of the Scheme is to provide long term capital appreciation by investing predominantly in units of AIG PB Equity Fund Gold based in Zurich. The New Fund Offer will be open for purchase from 15 April - 14 May 2008 and will re-open for ongoing purchase/redemption no later than 12 June 2008. The scheme will offer both the options: Growth and Dividend with Dividend Payout and Dividend Reinvestment facilities. The Scheme may, at the discretion of the Investment Manager, also invest in the units of other similar overseas mutual fund schemes. The Scheme may also invest a certain portion of its corpus in debt and money market securities and/or units of debt/liquid schemes of Mutual Funds, in order to meet liquidity requirements from time to time. The scheme will invest 80% – 100% in units of AIG PB Equity Gold Fund and other similar overseas fund and the rest 0% - 20% in debt and money market securities and units of debt and liquid schemes of domestic mutual funds.

Views- This fund seems similar to DSPML world gold fund in concept. This would be a good option for those who want to diversify into Gold. This fund would be considered as a DEBT fund for taxation of dividends and redemptions.

Planning to SIP??

No one is talking about markets and investments these days , as they used to talk a couple of months ago. Conversations on Stock/ MF , Browsing of Investment sites/blogs, Display/ reading of investment mags. are not a great trend now as it was sometime ago.
The Fad seems to be gone. For one who is seriously looking at creating wealth for the long term, equity markets are a great place to invest now. Not that the worst is over yet. But investors who invest during tough times and are patient ( 5 years and above) will reap great benefits during the boom cycle that follows.
If you have the right investment spirit , this should be the best time for you to start an SIP in a diversified mutual fund ( having a long term investment view). If you are already sipping it out, you continue to be on the right path of wealth creation

Popular searches to this site

1) Tax related queries / Analysis on tax saving instruments

2) ULIP vs Mutual Funds / SIP / Analysis of ULIPS

3) Queries on Mutual Funds and NFOs

4) Personal Finance Blog searches/' Personal Finance ideas'

Being aware of your finances.

When I was talking to a couple of my friends/colleagues , I got great surprises .
Person A was telling that he had never claimed his medical bills ( 15,000 Limit) in his entire career spanning more than a decade. Not that he wasn't aware of it, but he didn't care to take time to submit claims.
Another one said, he never bothered to withdraw/ transfer his PF from his previous employers. He is with the present employer for six years. He says he doesn't understand finance nitty gritties to do this!!!
In the same way, many succumb to buying money back policies or ULIPs as 'Investments" because they do not do enough research.
Another friend of mine doesn't stretch himself to transfer his funds from his savings account to an 80C instrument and ends up paying extra tax every year.
In none of the cases, this is happening because they can afford to do away with their money. It's because they fail to take that small initiative towards understanding an instrument or making an effort to being aware and acting in time.
In this context, we are in April and this is the right time to plan your tax savings and other investments for the financial year.

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" A Ship is safe when it is in Harbour, but the ship was not built for that"


These are just opinions/ ideas exchanged. No one can claim us responsible for any investment failures /losses based on the ideas expressed here.

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