An investment portfolio is like a cricket team put in to bat in a test match. In cricket, the selectors pick up individual players based on their past performance and the need to make a balanced team. Similarly, for preparing a good portfolio, we need to put in funds that have different characteristics and perform in different market conditions and scenarios. One can either make a portfolio by self through self-study and monitor it regularly with knowledge or take the advice of a qualified investment advisory company, which selects the best combination of funds out of the hundreds available and keeps guiding and balancing to enhance the chances of posting a good score on the scoreboard.
A portfolio, like a cricket team, takes time to settle down and start scoring – depending on the way it is structured. Consistent focus and review of strategies definitely deliver in the long run, even though there could be reverses in the short run.
Vinay Kumar, Humfauji GurgaonFebruary 28th, 2020
Lots of investors are worried about the way stock markets are going down across the world and the future of their investments due to this virus.
The previous virus outbreak of this scale was the SARS virus in 2003, but the circumstances were different then markets across the world had been suppressed for quite some time and China wasn’t such a strong global player. It led to a significant correction in the markets especially in South-East Asia; but then later, there was a very strong rally across the world when the virus subsided. Similar scenario seems to be playing out now – the difference being that China is a much bigger player well embedded in global value chains and a large consumer of commodities. For India, China is also a source of big inputs in pharmaceuticals, electronics, and chemicals.
Of course, whenever such a ‘pandemic’ is in full force, the uncertainties create panic. Discussions with medicos indicate that this virus starts losing its potency quickly in warm season. So, we feel that this is a transitory phase which just needs to be gone through, maybe even providing good buying opportunities. As time passes, countries gear up their act, weather across the globe becomes warmer and some complete or partial anti-virus solution is found, this too shall pass.
Rajiv Sanoriya, Humfauji GurgaonFebruary 28th, 2020
The latest budget increased the ‘insurance’ on your bank deposits to Rs 5 Lakhs. Have you wondered what is it and what has been increased?
In simple words, if any commercial scheduled bank decides to call it a day, you are assured by the RBI that you will get Rs 5 Lakhs or your amount in your savings bank, whichever is lower, within two months of receipt of claim.
How will you get it? The Deposit Insurance and Credit Guarantee Corporation (DICGC) of RBI insures each account holder’s investments / deposits in commercial banks, including foreign banks, upto a limit of Rs 5 lakhs (it was Rs 1 Lakh earlier). RBI charges a yearly ‘insurance premium’ from the banks for it. For individuals having more than one account, each bank’s accounts are separately insured. Joint accounts, where names of account holders appear in different sequence, are also insured separately. However, those with the same sequence, are aggregated and insured as one.
Brig MC Pant (Retd), Humfauji GurgaonFebruary 28th, 2020