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  • Category: Miscellaneous

    Handling the between the Devil and the deep sea situations

    We are witnessing a massive churning in our lives. A vast majority of us are caught in the situation where we have the devil on the one hand and the deep sea on the other. For example, we are forced to spend money on our bare essentials with inflation creeping through every single item of expenditure. Inflation is the devil. But beating inflation by investing in SIPs of mutual funds or the stock market, which is an option, is the deep sea for most of us who do not know when to invest or what to invest. However, those who take risk are often unfazed when they incur short-term losses. These are people who have a safe corpus to fall back upon. And they are healthy enough with not much of medical expenditure.

    There are others who are not so well off. They just take the plunge and invest a big amount in the stock market. When it goes for a six, the deep sea simply drowns them.

    The trick is to play it safe and play around with very little or invest the money in sure " no loss" businesses. For example, small hotel business from one's residence. We should never go to the extreme as the deep sea is dangerous.
  • #723638
    Investing in stock markets either through shares or Mutual Funds is an Art. Not every one can gain from it. Just like how medical insurance comes handy, when we are ill, the stocks/mutual funds also need some kind of insurance when the stock markets fall. Such kind of insurance can be provided if we buy gold either through Gold ETFs or Gold Funds. Such type of hedging is necessary if someone invests in Stock markets so that the Principal will not be eroded.

  • #723641
    The investing pattern should be different from person to person. A young person who is in his active years of life can take some risk and invest some money in the share market so that there will be good gains. At the same time, he should not invest his complete money in the shares. He should think of mutual funds and other areas also where the chances of losing are very less.
    A retired person who is dependent completely on the interest he gets from his investments should not take any risk and should invest in such a way that there will be a minimum guarantee of money every month. These days MFs are considered to be safe than many other investments.
    Traditional people who never wanted to take even1 % risk will simply go for FDs in banks. But unfortunately these days the return on FDs is very less and many senior citizens are suffering a lot due to this.

    always confident

  • #723642
    The author has rightly said, inflation is so big that if a person does not save with investment, then he will fall into the trap of inflation. But investment becomes a question of confusion, especially when they do not have much knowledge of it. In such a situation, people adopt only two methods, either seek advice from someone who has a piece of good knowledge about the investment or adopt the easiest way of saving and get a fixed deposit in a trusted bank. Investment requires as much caution as when spending.
    Swati Sharma

    Keep your Face to the SunShine

  • #723646
    The author has raised a burning issue. Inflation is indeed going up. The price of commodities is gradually going out of reach for common people. There is no curb on price-hike. In this situation, those people who have saved some amount for their bad patches when they will need money are likely to be worried as the author has evinced how to invest and where to invest their hard-earned money which may give them some profit. Those who have good knowledge about share business may invest their money but they have to keep their eyes on the share market how it's taking a turn. Generally, people deposit their money in banks to get some interest but now interest is also very low. Another option is a mutual fund. I understand this dilemma.

  • #723648
    The bank FD interests are day by day going down and that is why some people are investing in MF in SIP mode or equity market in select shares. The challenge in this is the risk associated with the share market. Inflation is there and it will always be there because of economic reasons and market forces present in the business world. The growth in the investment has to be substantially higher than the inflation otherwise the people who depend on the interest income for their livelihood will be in problem. The irony is that if the inflation comes down then the bank interest rates will further decrease.
    Knowledge is power.

  • #723650
    The prices of all the essential commodities are inching up on regular basis and the prices of edible commodities are beyond the reach of the common people. Such inflation is not being offset with the provision of dearness allowance to all the employees except for the government sectors. The employers are not compensating for the spiral of the commodities. We may think of investing in shares but here too, there is the risk of loosing money because of uncertainties of the stock markets. Mutual funds may be a safe instrument providing you annual profit of 12 percent in some mutual funds provided we choose right portfolios.
    For the seniors, fixed deposits offered by the banks are no more attractive with the rates dwindling below 6.0 percent even less than the rate of inflation. Hence they are worst sufferers if they are not enjoying the government pension. These classes of people need some protection so that their principal money is not eroded by way of fixed deposits of the banks.

  • #723716
    When inflation in our country was very high and bank interest rates were also high then people were complaining about the inflation only. Now when the inflation is comparatively less, and interest rates are down, we are complaining about the interest rates. Anyway, the situation is now tough because the market investments like equity and MF appear to be risky and traditional investment avenues are giving less returns.
    Thoughts exchanged is knowledge gained.

  • #723733
    Today, I watched a YouTube video of Pragya Mishra reporting from Lucknow and talking to people about inflation and similar other issues, some people said that everything is O.K. There is no inflation in India. There is no issue of price hike. She asked about price hike of LPG and petrol -diesel, they opined that we should not be worried for it. Everybody must support government instead of criticising it. However, some other people were speaking contrary to them.
    People are of different mindset in our society. We can not generalise one aspect of any issue. What you will say about these people who are happy and want all people to be happy too.

  • #723761
    It is absolutely stupid and irrational to claim that inflation is less. If one goes shopping, one can always notice that we keep on spending more for less. The petrol prices are likely to exceed Rs110 per litre within two weeks. Thanks to ineffective financial management of the macro economy, we have already landed in a mess. The middle class is bearing the brunt of everything that is wrong with economic management at the macro level. Blind faith in someone who talks big and diverts people from the real issues is the crux of the problem. This will slowly change over a period of time. There will be a big churning when the wind starts blowing in the opposite direction.

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