For Whom Wealth Matters
July 21, 2011 Leave a comment
What better person to tell you how to become wealthy than one whose name is a long term fixture on the Forbes List?Here are Warren’s tips on how to get rich,put together by Alice Schroeder: Read more of this post
July 11, 2011 3 Comments
MIPs are hybrid debtoriented mutual fund products.They are great places to park money if you have a 2-3 year horizon.The majority of the money in this case is invested in debt and the NAVs fall when the interest rates rise.Currently the equity markets are showing some weakness and the interest rates are high,so MIP NAVs are low.So its a good time to pick up MIPs .HDFC and Reliance are 2 fund houses that are known for their treasury management operations.And HDFC and Birla Sun Life MIPs have perfomed well due to superior management of the equity component.
Here is a video that walks you through the ABCs of MIPs:
July 6, 2011 7 Comments
Buying an NCD at an IPO when interest rates are high and holding it to maturity is a pretty sound idea.But buying NCDs in the secondary market can be pretty profitable too.
The prices of NCDs vary with changes in the prevailing interest rates.So careful shopping when prices fall as interest rates rise and holding on till maturity is more profitable.
If a person is good at figuring out which way the interest rates will move,he could buy NCDs cheap and exit them when their prices peak.This could potentially increase returns.
June 19, 2011 8 Comments
The volatility of the Indian market which is above 26% is one of the highest in the world. So though the long-term CAGR of the Indian market is 15.60%, there have been specific points in time when the market returned 1.25% pa for a 10-year period as well as 19.98% pa for another 10-year period.
One of the biggest impacts of this volatility is that it increases the entry-point and exit-point risks in investing. The simplest way of tackling this risk is to invest in the market at regular periods of time, irrespective of its levels to achieve cost averaging and also participate in the long term upward trend of the Indian markets. Also it is better to stick to the stable large-cap blue-chip companies. Read more of this post
April 12, 2011 8 Comments
The Reichsmark was never an international currency.So studying inflation in the Weimar Republic is not enough.This post traces the history of the Drachma,Denarius,Bezant and Dinar–the international currencies of antiquity.I think knowing this history will help us see the parallels and understand our world better.If macro-economics is not really your thing,atleast knowing about the coins should give a rough idea of which ones would be more collectable for their bullion content!
The Drachma
The Greeks minted stunningly beautiful coins.Non-Greeks thousands of miles away treasured these coins and so they became the first “international currency”.Archeologists have found Greek coins as far away as China, India and Northern Europe. In fact, even though Rome soon rose to eclipse Greece, most Asians kept using Greek money for centuries.
The main currency of Greece was the Athenian Drachma (pic on the left). It was a silver coin, and its weight and quality stayed amazingly consistent through the centuries. From Solon, around 600 BC, to Alexander the Great, around 300 years later, it stayed exactly 67 grains of fine silver. This was the money Alexander brought to India, and from there it traded yet further East becoming the monetary standard of all Asia. And even as Greece declined and was finally absorbed into Rome, its value did not fall much. By the end of the Drachma’s life, it had only declined to 65 grains of fine silver. This is an extraordinary achievement. No other civilization has ever had an international currency that stayed the same value —or pretty much so, since a fall from 67 to 65 grains of silver is a loss of less than 3%. And this was not only during the period of its greatest influence, but even as it declined in power over a period of six centuries.Whatever the secret of the Greeks was, no international currency since then has ever been able to keep its value, even as the government issuing it started on its seemingly inevitable decline.Certainly the conquering Romans were astounded at how the Greeks had mastered money. They paid Greece the ultimate monetary compliment by fashioning their own money, the Roman Denarius, as an exact copy of the Drachma right down to the size and weight. Read more of this post
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