One of the questions to my earler post was how to pick stocks? It is allright to say that, ” You can start with identifying a list of 10-15 companies out of 3-5 sectors which you know or which interests you. You can keep a tab on their management team, financials and future outlook and over a period of time, you will be able to take a call on them.”
But I guess, it’s good in theory. How about doing an analysis of a sector and then take a look at …

Yes, it’s for Dummies and by a dummy on Derivatives. So here’s what lil’ bit of Derivatives I understand(or pretend to..). Read on….
Derivative is a product whose value is derived from the value of one or more basic variables, called underlying. The underlying asset can be equity, index, foreign exchange (forex), commodity or any other asset. Derivative products initially emerged as hedging devices against fluctuations in commodity prices.
In India, BSE created history on June 9, 2000 by launching the first Exchange traded Index Derivative Contract i.e. futures on the capital …

Hey, I’m not into fashion designing. But could not resist a tantalising title to talk about Insurance!! If you haven’t started a family, an Insurance cover is the least of your priorities. But even though it’s not that cool to be insured, it sure is smart when there are people who depend on you.
Life insurance is a potent tool that not only offers the ability to plan for unforseen events that can affect the family’s financial situation adversely, but is also looked up to as an important tax saving cum …

Today I was talking to a friend who was telling me about his Insurance cover. He is a 32 year old guy and has a cover of Rs 7 lacs and pays a premium of approx. Rs 50000. When I told him that I’m covered for Rs 35 lacs with only Rs 20000 premium, he did not beleive me at the first instance.
If you haven’t started a family, an Insurance cover is the least of your priorities. But even though it’s not that cool to be insured, it sure is …

Putting a finger on the value of yr life is crazy. Isn’t yr life invaluable and priceless?
Indian consumers have bought life insurance for reasons of tax saving rather than the core need of providing for one’s family in case of death of breadwinner.
Secondly, Indian consumers have been unaware that insurance too needs change with every change in one’s life stage (e.g., if one gets married or has children, one’s need for insurance goes up).
As a result the average insurance size is less than Rs 1,00,000. This is less than the …

Getting rich is in your hands, nobody else’s . So get started with working hard or smart (depends on you again), adding to your finance knowledge and generally taking responsibility for yourself. Get Rich Or Die Trying.
If Financial decisions look like rocket science to you and Investing is even more daunting, here are some baby steps for you.
This one is from Deborah Fowles, Guide to Financial Planning in About.com Seems very elementary but I doubt how many people are scoring more than 5/10. Here it goes, the top ten:
1. Get …

I spent an hour working in calculating the future values of my investments and worked on MS Excel for that. I found out the “Power of Compounding” and the benefit of “Starting Early”.
If I started at age 20 and invested Rs 2000 every month (Rs 24000 annually), my corpus at age 55 would have amounted to Rs 65 lacs. With similar amount and rate of return, if I started at 40, the corpus would be a miserly Rs 7.62 lacs. I invest less by Rs 4.80 lacs and the corpus …

I don’t remember the source, but here they are:
1. Plan your trades. Trade your plan.
2. Keep records of your trading results.
3. Keep a positive attitude, no matter how much you lose.
4. Don’t take the market home.
5. Forget your College degree and trust your instincts.
6. Successful traders buy into bad news and sell into good news.
7. Successful traders are not afraid to buy high and sell low.
8. Continually strive for patience, perseverance, determination, and rational action.
9. Limit your losses – use stops!
10. Never cancel a stop loss order after you have …

This is a new blog. Anytime you feel that your questions do not have the answers here, please head to these wonderful blogs on Personal Finance
Ramit Sethi
Get Rich Slowly
Rajeev Mundra
Avinash MB
Weblog on Business and Finance
The Indian Investor
Tax Query

Share and Enjoy:

Gaurav’s post on the 30 things he wanted to do before he’s 30 was a brave one. I wondered at his bravery and wished him all the best only to land up in trouble myself He wants a way to build a Networth of 1 Crore before he’s 30 and now wants me to find it.
Gaurav’s target of becoming a crorepati is brave but also bordering on being foolhardy, I think. To top it, he wants to start with a seed capital of only Rs 2 …

I have been following the EagleEyeTrade blog and even though I don’t understand technical analysis, I find this blog very credible. I am delighted that Rajiv found time to answer some of my doubts/questions which have been reproduced below:
Technical analysis is the study of the trading history to attempt to predict future prices. What qualifications make you confident of doing that?
The only qualification which works in Stock Markets is real life experience. A college degree, BTech or on MBA all are helpless unless one can think for himself and be …

This news can make you feel that it should have been started in your time. The Government is thinking of starting a course on Investing in the schools in Std. XI/XII.
For me the first principle of investing is “better late than never”. But actually it is to “start early”. And when it comes to making money by investing, time is on the side of the youngsters.
Investing and the stock market will play a vital role in the future, irrespective of what the youngsters choose to do with their life.Whether they …

ULIP is a hot selling insurance product these days. Unit Linked Insurance policy is an insurance policy where the funds are invested in the Capital market and the policyholder bears all the investment risks.
Insurance companies are falling over each other to bring out ULIPs in new and attractive packages, thanks to it being accepted across India in huge numbers. More than 80% of the new premium income of Insurance companies come from ULIPs today.
Advantages:
Tax benefit under Sec 80C
Better returns than other insurance policies like endowment and moneyback.
But shouldn’t this product …

It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price: Warren Buffett
During the period from 1980 to 2003, the stock portfolio of Berkshire Hathaway beat the S&P 500 index in 20 out of 24 years. During that same period, Berkshire Hathaway’s average annual return from its stock portfolio outperformed the index by 12.24 percentage points. The efficient market theory predicts this is impossible, but the theory is clearly wrong in this case.
The genius of Warren Buffett lies in his simplicity. …

Slideshare is a wonderful way of sharing your slides and powerpoint presentations. It is a place to share and discover slideshows. You can embed the slideshows in your blog, tag, comment and have fun.
I have embedded a presentation I have made on “Taking responsibility for your finances”
Click here for the slides
What do you have to say? Please subscribe by Email or Feeds

Share and Enjoy:

When you buy a share of a company you become a shareholder in that company. Shares are also known as Equities. Equities have the potential to increase in value over time. It also provides your portfolio with the growth necessary to reach your long term investment goals. Research studies have proved that the equities have outperformed most other forms of investments in the long term
This may be illustrated with the help of following examples:
a) Over a 15 year period between 1990 to 2005, Nifty …

FINANCE looks daunting. For me too.
I was in Rishikesh a few years back in the winters and one old resident told me, “The water is warm when the Sun has not risen. Try it”, with a straight face. Next morning, it was pretty dark when I waded into the “warm waters” of Ganga. Boy, Oh Boy! I did not expect the old man to be so cruel!!
But I had the bath of my life. It was invigorating and real fun! I came back and thanked the old man …

Investing in the equity market directly is exciting and sexy. You are in the thick of things and are able to take responsibility for yourself. Though the volatility and the information overload makes it a daunting task.
How about investing through Mutual finds? Doesn’t it have its own loading and administrative charges and the fund managers making merry on your hard earned money? And can’t we see the best performing mutual funds and follow their portfolio?
Here are some points to ponder:
We should allocate our time to investment decisions in proportion to …

The Little Book of Common Sense Investing is an amazing book by John Bogle. Read this about the book you can buy on Amazon.
Investing is all about common sense. Owning a diversified portfolio of stocks and holding it for the long term is a winner’s game. Trying to beat the stock market is theoretically a zero-sum game (for every winner, there must be a loser), but after the substantial costs of investing are deducted, it becomes a loser’s game.
Common sense tells us—and history confirms—that the simplest and most efficient investment …

Basically, Exchange Traded Funds (ETFs) are open-ended index fund that can also be traded on the stock market.
Compared to Mutual funds, there are many advantages of ETFs, one is real time pricing, secondly long term investors are protected from short term traders. Hence it proves to be an ideal instrument for both long term as well as short term investors and also it is easy to buy and sell from the exchange.
One major disadvantage of ETF is that the investor should have a demat account and a broking account.
There are …