Thinking aloud!!

If you rewind yourselves by an year, The Indian markets had "Decoupled" from the whole world and was surging ahead against all odds. Then the impact was felt slowly while the raising oil prices became the talk of the town. After that settled, India slowing down thought began to sink in amidst the mass exodus of the FIIs. Nobody's sure about the future and everybody is gloomy in predicting it too.

There are a lot of lessons to learn from this cycle and a lot of things to look forward too!. India has'nt seen as many job cuts as the US . So we have'nt really felta major impact. The economic growth for the last 4-5 years were primarily driven by the increasing spend by the salaried class. IT/ ITES jobs which triggered further more local jobs in India and ever increasing salaries led to a huge consumption boom. Many of us started living today with tomorrow's money. Many pledged their future income for 15-20 years to buy their dream homes and this inflated real estate prices. Stock market boom also created a great sense of confidence in all.

The retail consumption is going to be driven by the jobs that we have ( either internally generated or by MNCs). When the employment scenario looks bleak then the driver for consumption goes down.

If job cuts start happening in India too, it may lead to a mini-subprime within India. If Job losses are going to be minimal then we may push through and jump back faster.

IT/ ITES jobs have almost been the destination for most of the urban youth. These are the people who triggered big consumption. May be a decade from now , we may see these sectors loose sheen and become just another job ( like a Bank officer's job now which was looked at with awe a decade ago!). Such changes may bring in sanity to the society and lead us to inclusive development. If we look at the IT/ITES stock prices we don't see any encouraging signals in terms of the near future . A dent in the increase of salaries becomes a new item everyday and those who took home loans factoring higher salary growth might have to suffer.

Whatever it is, this too shall pass and these are the times we should remind ourselves of good old Indian ways of living i.e. " Living a debt free life ( living within the means)" and " Save for a rainy day". These mantras when sincerely applied to our lives will make us immune to financial crisis.

My experience with ATM

I happened to use my HDFC card at an ICICI ATM in early November' 08. I was trying to withdraw 18k . The transaction got declined .However, the cash was deducted from my HDFC account promptly. I raised a complaint with HDFC immediately and also raised a dispute along with the copy of the ( declined) transaction slip.

I got back the money after 35 days as assured but wanted to write this article to create an awareness. This 35 days may be harassing esp. when you are in real need of that money. You keep worrying while the bank keeps enjoying your money for no fault of yours.

What I have learnt

1) Avoid using the ATM card of one bank in another even if there are no extra charges involved.

2) Even if you decide to use your card in a different bank's ATM, do not try withdrawing a huge amount. If you need a huge amount , try withdrawing it in parts and not in full.

3)In case you get into such trouble as stated above , don't panic. Keep a copy of the transaction slip and raise a written dispute with your bank immediately.

Real estate crash in India??

http://www.iimahd.ernet.in/~jrvarma/blog/index.cgi/Y2008/FE-Bubble-in-backyard.html
Rea

Indian Stock market turmoil - What lies ahead??

It was not long ago that all of us were interested in equity and were proud of our equity/ mutual fund investments. When the fall started in Jan'08, most of us held on or added more to our portfolio thinking that this downturn was a short term phenomenon. Come October, We are left to face with reality .It's hard to believe that we are below 10k levels. Even SIP investors should be in deep red now and wondering what to do.

Equity is as such a risky investment and when we see a bull run lasting 3-4 years, we get over confident and start pumping more and more money into it. This happens always during the last phase of bull run. We tend to forget the bear phase when we invest during the peak periods. But at these times, we should also remember that we get bogged down too much about the negative news around the globe.

There should be light at the end of the tunnel and patience is the only virtue that can keep us going and bring us some good returns in the long run. With the US and India elections on the way, we cannot expect any great upward curves at least in 2009. But in a couple of years at least , the dust should settle down for more clarity. It would be difficult to say whether we will be back to 21k days any sooner or later. But we have to believe that things should get into better shape once the dust starts settling down.

Every body wants to make money out of equity but no one is ready to face uncertainty or downturns. ( It's like everybody wants to go to heaven but no one wants to die). Time and patience is key to solving any problems . So, lets wait patiently to see this crisis too going away!!.

Medical Reimb. limit too low

Last couple of weeks have been hectic at office. I was not able to post even though I wanted to blog badly for a long time. I was also down bit with cold & cough.

A couple of visits to the doctor (with medicines) cost me almost Rs. 1000/-. I was shocked as I visited a normal doctor and cold is after all a common occurrence!!. This may not be the exact figure that everyone spends for a couple of doctors visit. But I realise, visiting a doctor is getting a costly affair these days.

In these circumstances, a maximum limit of Rs 15000/ p.a prescribed for a salaried employee looks too low. If a family of four or more has only one working person, this limit will be blown of within a few months from the beginning of the financial year.

It is high time that these redundant rules get revisited and made more friendly to the salaried class.