You really need to have time, knowledge and money to invest and make profits in Stock markets.

Though we agree with the above statement, we feel you can make profits and become rich with good investment strategy.

After the SEBI banned mutual funds from charging entry load which is used by MFs to pay commissions to their distributors/agents, investing in Mutual Funds became more attractive.

So, how do we pick the mutual funds from the lot?

It’s simple, just analyze the returns given by various fund categories over the past say 5 years.

History says that FMCG(Magnum FMCG fund), Banking(Reliance Banking fund) and Pharma(Reliance Pharma) sectors were always on top. (Data as on July 2010)

Often, top analysts advice investors to buy equity diversified fund but the above mentioned categories always topped and gave much more returns than equity diversified funds.

We believe it’s better to diversify by putting our money equally in the above sectors we mentioned.

It’s also relatively safe to invest in good equity diversified mutual funds such as HDFC Equity, HDFC Top 200, Reliance Growth through Systematic Investment Plan (SIP).

These funds have been in market from very long and has shown consistent performance. There may be funds which are doing very good currently but can you trust them for long term investment such as for retirement?

Disclaimer: Please consult a investment expert before making any decisions as they suggest you based on your risk appetite, tenure you wanted to stay invested etc.

However, it’s good to clean your portfolio once in a while and build good portfolio that you always wanted to.

Now you may not know which stocks to invest. We have a tip for those who can’t actively mange their portfolios.

Just sneak into portfolio of all performing mutual funds across sectors and you will know which companies they trusted the most. Now, you have it. Why wait?

Clean your portfolio and the best time is perhaps when the market is down.  Please contact your financial advisor before performing any actions.

Recover will be steep if the fall is steep.  Our advice is, keep investing regularly into good mutual funds or Exchange Traded Funds (ETFs) via SIP route.

Up to 1,60,0001                                                                NIL

Up to 1,90,000 (for women)                                              NIL

Up to 2,40,000                                                                  NIL

(for resident individual of 65 years and above)

1,60,0001 to 5,00,000                                                      10

5,00,001 to 8,00,000                                                        20

8,000,001 and above                                                       30

We realized by now that, anything which grows suddenly can come down suddenly. However, it would not be right to say that we are again growing suddenly. Instead, we can say that we are ‘recovering’ smartly.

Let us understand, how this market grows. Though it’s difficult to explain precisely, we will give it a try.

Market is driven by investors who are investing in companies that contributes to an index like Sensex. These investors does great research on various parameters like past performance, projected performance etc. And this performance is linked to customers/consumers of that company’s product/services. So if the consumer confidence index (CSI) is good then market tends to grow better.

These consumers will consume the products or services only if they have enough money to spend. So, as long as he have a job and handsome salary and most importantly if there are products or services that he/she is interested in, then he/she spends.

Now consider a case where a product is priced very expensive. Let’s take an example. Any guess what example we are going to take? Real Estate..!!

When real estate prices increase due to greed of Builders or due to increase in demand etc, at one stage, prices will reach such a level that most of the investors will feel it’s very expensive so these consumers will stop investing in real estate. And the problem starts here.

Though he is earning handsome salary, he reduces spending thus affecting all dependents of Real Estate market. We also need to understand that sectors are depend on each other. To make our example simple, let us also consider that such consumers reduces spending on few other sectors. This results in decrease in demand and thus all the affected companies will have to cut costs by cutting salaries or cutting jobs which in turn will only worsen the situation as consumers have less money to spend. This will turn to a deadlock where one is expecting other to act first.

This is the time when investors will even stop investing in equity markets and will start investing in Gold or prefers to put their cash in Debt instruments like Fixed Deposits. This is the how market goes down. And when the deadlock that we discussed starts getting relaxed then slowly the market will recover and this is the state that we are currently in.

When people saw market at 8000/9000 levels, they though it may further go down to even 6000 levels but they lately realized that it was only going up. So what should they understand from the market? Never time the market.

If we are somewhere near market lows, invest more and if we are at market high, invest less. And if we are some where in middle, then invest consistently some amount so that you would be averaging your investment cost and most likely you wouldn’t regret for not investing or for investing.

Good Luck..!

It’s easy to say depends but difficult to give accurate figure at any given point of time and the reason being each fund house or an Asset Management Company (AMC) like SBI Mutal has the freedom to charge a maximum of 7% on the invested amount as exit load (now that the entry load is scrapped)

So each of these AMCs have the freedom to define exit load for each of their schemes and the duration till which they expect the investor to stay with them popularly called as lock-in.

So, always know the exit load and the lock-in period before investing into a mutual fund. It will be a available on AMCs website or some popular websites.

This way, they are safeguarding interst of their other clients who stay invested because every time there is a withdrawl or redemption from a customer, that fund house has to sell shares in effect bringing down the share price. Now the problem is..when you wanted to sell, people ask for a lower price and when you wanted to buy, they demand higher price.

With lot’s of complications on Mutual funds, it may be wise for a short term investor to buy Index funds or even better ETFs where commissions are less and easy to transact.

Please read our articles on ETFs to know more about this area. (You can simply search ETF in our site.)

Note:

1. In addition to the above income tax calculated, a 3% education cess will be charged on the total Income tax paid and not on the total taxable income.

2. This time, there is No surcharge of 10% on individuals earning above 10 lakh.

Financial Year revenues stood at record $6 billion i.e. Rs.27,813 crore up 23% compared to last year.

It has shown record operating profits at Rs.6,577 crore ($1.42 billion) up 29% compared to previous year.

Net Profit stood at Rs.5,256 crore up 5% compared to previous year.

Board of directors recommended 1:1 bonus share issue.

TCS said that the volumes have grown at 18% in a tough economic environment.
Earnings per share for 2008-2009 at Rs.53.63 from Rs.51.36  in 2007-2008.
Total divident for FY 09 at Rs.14 per share including Rs.5 as final dividend

It also highlighted that they have closed 28 large scale deals during 2008-2009 and have added 163 new customers.

With respect to employee management, TCS has added 48,595 professionals and the total employee strength stood at 1,43,761 professionals. Attrition rate stood at 11.4% LTM (including BPO). It seems they have given 24,885 offers to freshers (campus) for 2009-2010.

Mr.S. Ramadorai, CEO and MD said that in addition to total dividend of Rs.14 per share, the Board of Directors have recommended a 1:1 bonus share issue subject to approval by shareholders.

Source: www.tcs.com

Today i.e.  Monday, 13th April 2009 will at least be remembered by thousands of employees of Satyam, Tech Mahindra.

Investors considered this deal a win-win and is the reason stocks of these companies rose on this day of importance.

Mahindra offered Rs 58 a share for a 31 per cent stake in Satyam Computer Services by beating other strong rivals such as Larsen & Toubro who offered Rs 47 a share. L&T already has 12% stake in that company.

Tech Mahindra will also make an open offer for another 20 percent stake in Satyam and thus will evolve as majority stake holder in Satyam.

Sources say that L&T is unlikely to exit during the open offer.

It’s believed that there will be no mass lay-offs after the take over. Having said that, gradual lay offs cannot be ruled out.

Un-allocated employees (employees on bench) should be prepared for any unfavorable decisions. It’s believed that 100 senior key employees cannot be removed by the new employer.

Now the question on whether Tech Mahindra still values the offers made to freshers by Satyam remains unclear. It’s believed that an email communication was sent to all 6000 freshers who had got offer letters from Satyam earlier asking them to  explore alternate opportunities. Clearly, 6000 is sizeable number and L&T may not consider absorbing all the freshers in these recessionary times.

With this deal, Tech Mahindra clearly emerges as one of the Top 5 IT companies of India.

This takeover by Tech Mahindra would immensely help Satyam regain shareholder’s value and would obviously benefit Satyam’s employees and customers.

Let us all hope this transaction be a successful one.

Your investment portfolio should be a right mix of  insurance, equity, debt, gold and real estate and the allocation will be based on individual’s risk taking capability, goals and the period. We have included insurance under investment as it’s an investment to safe guard your family during your ‘absence’.

When a particular asset class has appreciated, it’s important to rebalance so that your investment objectives are intact. This is very important to realize or safe guard profits.

Every instrument which has the potential to earn has the potential to loose and we need to understand this.  So equity should be in our portfolio as they outperform all other asset class over long term.

We need to invest in debt so that we can meet our short term goals and can guard against financial turmoil during which the value of your equity investments might have eroded.

Gold is considered to be a safe heaven for it’s stability of it’s value internationally. You might have noticed Gold prices soaring when the markets crash.

Real estate is another asset class where your investments can exponentially increase or decrease. Normally, they perform better than equity and are less volatile but when you invest during an upswing just like the recent real estate bubble, you tend to book losses.

So, you may ask why can’t I play safe with Debt and Gold? You can. But the question is, are your investments giving you returns (after tax) more than the inflation rate? Are your returns growing better than GDP of your country? Ideally your investment should generate returns at least 15% per annum to be considered as good investment.

So your allocation to high return/risk assets can be more when you are young and have less liabilities and should be less when you are nearing to retirement or when you wanted to utilize that money for a purpose in short term. For example, you can have debt to equity ratio as 30:70 when you are at the age of 30, 50:50 at the age of 40 and 70:30 at the age of 50. These ratios should be planned carefully with your financial planner based on your liabilities, risk taking capacity and goals.