Investment Valuation in India

With just 10 working days for the year 2010 to complete, here is a small analysis of the sectors that have consistently outperformed the Sensex over the last 6 years. Average Yearly Return of the Sensex over from 2005 - 2010 = 29.0% [Max return in Yr 2009 - 77.3%] Sectors that have outperformed the Sensex in terms of Average Yearly Returns: Realty ........................ 98.6%  [Max return in Yr 2006 - 469.0%] (Realty Index introduced in 2006) Consumer Goods ..... 51.5%  [Max return in Yr 2007 - 114.8%] Metals ........................ 50.9%  [Max return in Yr 2009 - 220.4%] Consumer Durables .49.1%  [Max return in Yr 2005 - 110.6%] Auto ........................... 42.7%  [Max return in Yr 2009 - 200.5%] Power ........................ 35.8%  [Max return in Yr 2007 - 125.0%] Oil & Gas ................... 35.0%  [Max return in Yr 2007 - 112.8%] Banks ......................... 32.5%  [Max return in Yr 2009 - 81.0%] On a ...

This is a link to a post that I read on one of the blogs..... Most Americans still appear to be operating under the delusion that the "recession" will soon pass and that things will get back to "normal" very soon. Unfortunately, that is not anywhere close to the truth. What we are now witnessing are the early stages of the complete and total breakdown of the U.S. economic system. ...... Read more

Futures Future contracts are agreements between two parties to buy or sell an asset (underlying) at a given point of time in the future. They are standardized contract i.e. an agreement, traded on a futures exchange, to buy or sell a standardized quantity of a specified commodity of standardized quality at a certain date in the future, at a price (the futures price) determined by the parties involved. The future date is called the delivery date or final settlement date. The official price of the futures contract at the end of a day's trading session on the exchange is called the settlement price for that day of business on the exchange. Assume that no cash settlement was done between the two parties. A futures contract gives the holder the obligation to make or take delivery under the terms of the contract. Also both parties of a futures contract must fulfill the contract on the settlement date – it is legally binding. The seller delivers the underlying asset to the buyer, or, if i...

The CFA Institute, USA offers 10 Tips on Avoiding Investment Fraud Understand clearly the investment strategy Match investment strategy to reported performance Watch for e-mail solicitations and Internet fraud Be wary of “sure things," quick returns, and special access Understand what, if any, regulatory oversight exists Assess the operational risk and infrastructure Ask about independent audits and who performs them Assess the personnel Perform a background check Limit your exposure Please visit the link below for the complete article. This is just the summary and the complete article is listed on CFA Institute website. http://cfainstitute.org/aboutus/press/release/09releases/20090121_01.html

MUTUAL FUND OVERVIEW What is a Mutual Fund? A mutual fund is a pool of money that is professionally managed for the benefit of all shareholders. As an investor in a mutual fund, you own a portion of the fund, sharing in any increases or decreases in the value of the fund. A mutual fund may focus on stocks, bonds, cash, derivatives or a combination of these asset classes. There are different types of mutual funds. Some mutual funds are riskier than others. For example, it is unlikely that you will lose money in a mutual fund that buys money market instruments, such as treasury bills. Risk can sometimes work in your favor: the higher the risk, the bigger the potential return (and the bigger the potential loss); the lower the risk, the smaller the potential return (and the smaller the potential loss). To reduce your overall risk and enhance potential returns, you should invest in a diversified portfolio of mutual funds which have different risk characteristics. An investment in a Fund is ...

Nothing is going good for the economy (whether India or the world). The markets are down and no one knows where it is heading. But there is one common view. The markets have bottomed out and there is little downside from here. However, no one knows when is it going to revive. The levels of 21000 seems fantasy at this point. Analysts are jobless and are considered a liability to the erstwhile employers who used to flaunt a research division not more than 4 months ago. But it is said that if there is anything that comes for free in India, it is advise. So here I am, giving free advise. I know I wont be paid foir it anyways ;-) Seven ways to tackle the bear run Stick to stocks of large companies Look for debt free companies Search for businesses that are insulated (well, relatively) from the slowdown Look for companies that largely depend on domestic revenues Search for value stocks (generally cash-rich companies) Have an investment horizon for at least 2-3 years In case of mid-cap stocks...

Markets Correlation with the Trust Vote Nov 7, 1990 VP Singh Lost 1381 (sensex on vote date) +3.7% Sensex up 2.2% next day at 1412 May 28, 1996 AB Vajpayee Resigned before motion 3636 (sensex on vote date) -0.5% Sensex up 2.9% next day at 3740.40 April 11, 1997 HD Dewe Gowda Won 3634 (sensex on vote date) +1% Sensex down 1.2% next day at 3589.70 April 17, 1999 ABVajpayee Won 3327 (sensex on vote date) -6.9% Sensex up 3.7% next day at 451.4 July 22, 2008 Manmohan Singh Won 14104.2 (sensex on vote date) +1.83% Sensex up 5.94% next day by 836 points at 14942.28 Ref: www.ndtvprofit.com

Investing in High Volatile Markets The domestic stock markets have seen panic selling of late. In fact, this panic selling was seen throughout the world on the account of a slowdown in the US economy. Most global indices closed deep in the red. Actually, we are witnessing a huge amount of volatility in our markets from the last couple of weeks. There are many voices in the market that the bull party here is over. But, if you take a closer look, you will not find any major reasons to sell stocks in the market. In fact, long-term investors should use this market correction as an opportunity to accumulate blue chip stocks. There is absolutely no major change in the fundamental story of the economy. Yes, in spite of the Inflation shooting up, Growth rate projected downwards et al. As per economists' forecasts, the economy is all set to grow at around eight percent this year as well. This could be slightly lower than last year's growth, but otherwise, India would continue to be the ...