The Global Chessboard: How Geopolitical Moves Impact Supply Chains and Currency Values
Global Supply Chains Shakes
- Increased Costs: Tensions often raise transportation fees, tariffs, and trade barriers, making everyday goods pricier.
- Supply Chain Disruptions/ Deliveries: Conflicts can stall the flow of raw materials, leading to shortages and delays. Imagine waiting weeks for something you’d usually get in days.
- Diversification Strategies: Companies try to work around these risks by sourcing from different regions – a smart move to keep products moving.
Currency Twists
- Safe-Haven Currencies: During times of geopolitical stress, investors often seek refuge in safe-haven currencies, such as the U.S. dollar. This can lead to a significant appreciation of these currencies, while other currencies may depreciate.
- Trade Wars: Trade wars can lead to currency devaluation as countries attempt to make their exports more competitive. This can adversely affect the inflation numbers and the economic growth.
- Uncertainty: Uncertain times mean unpredictable currency rates, creating a bumpy road for investors.
Impact on Financial Markets
- Investor Sentiment: Geopolitical tensions can negatively impact investor sentiment, leading to a decline in stock prices and other riskier assets.
- Risk Aversion: Investors may become more risk-averse and shift their investments toward safer assets, such as government bonds.
- Economic Growth: Economic growth can stall, as consumers tighten spending.
In today’s world, global tensions can shake up markets in ways we least expect.
But that’s where we come in! As your trusted financial planners, we keep a close eye on these shifts, so you don’t have to. Our mission? To turn uncertainty into opportunity—helping you protect, grow, and adapt your investments, no matter what’s happening globally. With us by your side, you’re never alone on this journey.
Let’s face these challenges together and build a future that stands strong through all of life’s twists and turns!
(Contributed by Ankit Kumar Singh, Financial Planner, Team Prithvi, Hum Fauji Initiatives)
Earning Abroad? Here’s How to Make Tax Laws Work for You!
), a thought hits you – “What about the taxation?”
From understanding residency rules to managing multiple tax systems, the challenges can be overwhelming. Let’s simplify it.
- Figuring Out Your Tax Residency
First, determine your tax residency status. Are you an Indian resident, a resident of the country you’re working in, or both? Your status affects where you’ll be taxed, but Double Taxation Agreements (DTAAs) are there to prevent double payment between India and most of the other prominent countries!
- Foreign Earned Income Exclusion
You may qualify to exclude a portion of your foreign income from Indian taxes if you meet certain requirements. It’s a useful benefit, but knowing the rules and limits is essential.
- Double Taxation? Not on Our Watch!
If you’re already paying taxes abroad, the Foreign Tax Credit allows you to reduce your Indian tax bill. Just keep in mind there are limits to this credit.
- Planning for a Golden Retirement Abroad
Consider your long-term plans. You’ll need to think about currency fluctuations, the portability of retirement savings, and any social security agreements that may apply.
Remember to report your foreign income in your Indian tax returns. The UAE might be tax-free, but India still wants to know about your Dubai dirham!
Staying informed and seeking professional advice from trusted financial advisors like Hum Fauji Initiatives can make a world of a difference.
(Contributed by Gautam Arora, Relationship Manager, Team Vikrant, Hum Fauji Initiatives)
Treasury Bills (T-Bills): The Unsung Heroes of Ultra Safe Investing
Looking for a safe place to grow your money without too much hassle? Treasury Bills, or T-bills, might be the answer!
T-bills are short-term debt instruments issued by the government, perfect for those who want stability with their investments.
Here’s how they work: T-bills have short maturities of 91, 182, or 364 days. They’re sold at a discount, meaning you buy them for less than their face value. When they mature, you get the full-face value back—the difference is your income.
Key points to consider while investing in T-bills-
- Pick the Right Tenure – Think about when you’ll need the money, so you can choose a maturity period that matches your liquidity needs.
- Watch Interest Rates – T-bills respond to changes in interest rates, so buying them when rates are favourable can boost your returns.
- Consider Tax Impact – Gains from T-bills are taxed based on your income slab, so be sure to account for this.
Curious about whether T-bills are a good fit for you?
We can guide you on timing, tax implications, and how T-bills might support your financial goals.
(Contributed by Abhilash Rana, Relationship Manager, HNI Desk, Hum Fauji Initiatives)
What did our clients ask us in the last 7 days?
Question– I’m nearing retirement and will soon have my retirement corpus available. I want to keep a portion safe while still earning decent returns. Should I invest in Corporate Fixed Deposits or the Senior Citizens’ Savings Scheme (SCSS) for better safety and liquidity?
Our Reply – As one approaches retirement, preserving the hard-earned corpus becomes paramount. However, it is also important to check whether it meets your particular requirements – please don’t invest in avenues which are not for you or just because other people – your course mates, whatsapp influencers, general consensus – are saying so.
At this stage, few common choices include: Corporate Fixed Deposits (FDs) and the Senior Citizens Savings Scheme (SCSS). Each option has unique benefits tailored to senior investors, so let’s break down their essentials.
For a balanced approach, consider dividing your funds: place a portion in SCSS for peace of mind and government-backed safety, and another in a highly-rated corporate FD for slightly higher returns and flexible payouts. This way, you gain the best of both worlds—a secure foundation and potential for extra income to enjoy your golden years.
Need help designing a retirement strategy that matches your goals?
Reach out to our team of financial planners today, and let us help you build a retirement portfolio that blends safety, good growth, and flexibility of additions and withdrawal as per your convenience!
(Contributed by Team Dhruv, Hum Fauji Initiatives)
