For Whom Wealth Matters
June 17, 2013 Leave a comment
Its common knowledge that resident individuals in India can each invest upto $200,oo0 (about 1.2 Cr Rupees)abroad per year.However, not all potential investors have more than a few lakhs to invest and few have access to the infrastructure and knowledge to invest abroad by themselves.
So if you are looking to take the first few baby steps to diversify into foreign assets in a limited way here are the services you could access:
March 10, 2011 1 Comment
Financial advice always needs to be nuanced.What is good for one person in a certain situation many not be so good for another in a different situation. Unfortunately people are always looking for simple advice and rules of thumb.If we over-generalize on generally sane financial advice we can come to a sorry pass.
Here are some common homilies that need some reconsideration:
1. A house is always a good investment:A house is a tangible investment that you could potentially live in.You could rent it out and make some money.Maybe it will help you save tax.Maybe you could invest in one to save for retirement.Generally saving for a house to live in is good in that it gets a family to start saving.But at the time of buying a house it’s important to remember that you are buying a house and not a home.So do not go sentimental and over pay.Buying a house requires a deal of legwork and hard-headed thinking.Overpay and you will have to worry about the fluctuation in market prices.Try to buy an encumbrance-free house at a discount.It adds a greater measure of safety to your investment.Buy when the markets are down to safeguard yourself.Next how you pay for the house makes a big difference.Try to put down a large payment to save on the total interest you will pay.Shop around for a good loan if you need one.Read the fine print.Check if there is a penalty on prepayment.Lower rates matter.Also check if the interest is calculated on a declining balance.Check for hidden costs starting from the processing fee,the lawyer’s fee and structural engineer’s fee and insurance.When you consider the EMI you want to pay, don’t be too optimistic.Pay increments and bonuses might not come on time.Remember that over longer periods something is bound to go wrong.It’s the way of life.Also if you pay too much of your income into house payments you will not have any money left over to diversify into other assets and derisk your investments. Read more of this post
February 21, 2011 2 Comments
Since we can’t overcome the tendency of the human brain to make mistakes while working through heuristics , here is a list of things we can do to reduce the effects of the shortcomings of the human brain.The more we can incorporate these points into our investing procedures and systems , the better the quality of our returns.The checklist is form Whitney Tilson’s ‘How to Avoid – and Profit From – Manias , Bubbles and Investor Irrationality’.
•Be humble–Avoid leverage, diversify, minimize trading
•Be patient
–Don’t try to get rich quick
–A watched stock never rises
–Tune out the noise
–Make sure time is on your side (stocks instead of options; no leverage)
•Get a partner
–someone you really trust –even if not at your firm Read more of this post
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