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Gold Facts


buy gold on diwaliAs we head towards another Diwali, here are some gold facts to keep you motivated to make regular purchases in the physical product.Repeat ;physical and no version of paper gold.

1.With every 1 per cent rise in income, gold demand climbs by 1 per cent. But when prices rise 1 per cent, gold demand falls only 0.5 per cent.

2.For a 1 per cent increase in inflation, gold demand increases by 2.6 per cent as investors turn to gold to protect themselves against inflation.

3.Rural consumers show a pronounced preference for plain gold jewellery, while urban consumers are likely to buy gold set with precious and semi-precious stones.Plain gold jewellery accounts for some 88 per cent of purchases in rural India while the corresponding figure for urban areas is 57 per cent. In the days of rampant lab simulated diamonds sold as natural ones,a body is likely to help themselves by choosing plain gold pieces or simply discounting the price of “diamonds” while buying ornaments.Better assume them to be fake and be pleasantly surprised if they turn out otherwise. Read more of this post

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Designing Your Retirement


wealthymattersI think it a pity that so many Indians are so worried about retirement Link. For a few years now, I could have simply decided to quit all work and live off the income from my assets . It’s a different matter that I choose to work . I find personally meaningful work, one of the biggest sources of pleasure in my life.

Perhaps my approach of planning and providing for retirement will help many more people quit worrying about  it. So here it is :

1.First ask yourself if you wish to ever fully retire. When ?

2.Then ask yourself where you wish to live upon retirement ? Or would you really prefer to live a gypsy’s existence, going wherever your fancy takes you.

3.What are the plans, wishes and expectations of the rest of your family ,even as you retire ?What do you think of these claims ?How would accommodating their needs modify your plans? Read more of this post

The Yen Carry Trade


wealthymattersA carry trade is a strategy in which an investor sells a certain currency with a relatively low interest rate and uses the funds to purchase a different currency yielding a higher interest rate. A trader using this strategy attempts to capture the difference between the rates, which can often be substantial, depending on the amount of leverage used.

Here’s an example of a “yen carry trade”: a trader borrows 1 million Japanese yen from a Japanese bank, converts the funds into U.S. dollars and buys a bond for the equivalent amount. Let’s assume that the bond pays 4.5% and the Japanese interest rate is set at 0%. The trader stands to make a profit of 4.5% as long as the exchange rate between the countries does not change. Many professional traders use this trade because the gains can become very large when leverage is taken into consideration. If the trader in our example uses a common leverage factor of 10:1, then he can stand to make a profit of 45%.Big outfits carry leverages of 100-300% Read more of this post

Jitters About Jitters


Read between the lines, especially on interest rates.

Not sure I agree with him on inflation. The labour component of many goods and service combos means higher prices(inflation),at least at a level that the RBI is missing. For example, check the prices that are trending upwards on street food. The likes of Vada Pav and Chinese Bhel are not my regular dinner, but is so for much of the labouring classes of Mumbai. One step above, at the cheapest eateries of the Irani and Udupi variety, the increase in prices is steeper and/or quantities are smaller or formerly free side-dishes are now absent. Check the substitution of urid dal with other cereals, coconut with besan and the emerging story is different. People at the margins now have clothes and shoes, maybe even mobile phones, but not everyone is able to afford a satisfying and nutritious meal. I’m struck by the similarity with a lot of the domestic cost cutting content on the internet originating from the US and Russia.

Thinking that the RBI needs some real agriculture experience.

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