Financial Advisor

Friday, May 23, 2014

Declining Gold Prices

Biggest Fall in Gold Price

Yesterday, India has witnessed a biggest single-day fall in gold prices in 2014. The gold price has gone down up to Rs 800. The price has fallen after RBI eased import restrictions of gold. RBI had imposed severe restrictions on gold imports to reduce current account deficit (CAD) and control the sliding rupee in July last year.

In Mumbai, the gold price has dipped to Rs 27,840 per 10 gram. In world market, since last year the gold prices also has declined around 35% from 2000$ to 1300$. In India, due to weak rupee and import restriction the falling effect was not so intense. It may further go down till Rs 25,000 – Rs 26,000 level in near term if rupee get strong in next couple of months.

I have always written in my past articles that never over invest in this asset class. I still advise that do not invest more than 15% of your saving in the gold. In our Indian tradition, the gold needed in various auspicious occasion like birth, marriage etc. Only purchase as much gold as you required for those occasions and the rest of saving invest in equity and debt according to your financial requirement. My final word is on gold investment to stay away from it and keep investing in other asset classes.

If you want more information regarding investment or you have any other query about investment feel free to ask us.

Warm regards,

Arvind Trivedi

Certified Financial Planner

www.arvindtrivedicfp.blogspot.in

Tuesday, May 20, 2014

LIC’s newly launched Online Term Plan

The largest life insurance market shareholder launched an online term plan last week. Although LIC has delayed to launch it as almost all private insurance players like Aviva, Ageon religare, HDFC, ICICI etc already launched it before many year. It is very popular product among young earning generation. The first online term plan were launched in 2009. It took 5 year to LIC come up with such type of plan.

The premium of LIC’s online term plan is costlier than its peer players. The brand value of LIC is much matter for people than premium. The PSU status of LIC do more score in policy holder’s mind and in our country people rely on LIC very much.

The premium of online term plan is very low due to there is no agent between insurer and insured. Therefore, agent’s commission directly passed to the insured and it is very cost effective for insurance companies also. However, premium calculator available on every insurer’s website but the premium is only indicative. You will know actual paying premium after submitting your information to the insurance company.

Every insurance company has risk assess department. It assess your profile based on information like your medical history, family health information, your habits like consuming tobacco, smoking and any adventure hobbies etc. I personally recommend all of you to provide true and accurate information to insurer to avoid claim rejection in future. At the time of claim if insurer find that you have hide any information with the insurer then your claim may be rejected.

There is misconception that private insurance company will not honour the claim but it is not true. All insurance companies do business under IRDA ambit. The claim settlement ratio of five private insurance companies HDFC Life, Kotak Life, ICICI Prudential life, SBI life and Max life are more than 90% according to IRDA annual report of 2012-13. Now the LIC has joined the race of selling online term plan. We can expect better service and rate to the insured by private companies and LIC.

If you want more information regarding investment or you have any other query about investment feel free to ask us.

Warm regards,

Arvind Trivedi

Certified Financial Planner

Saturday, May 17, 2014

After Modified India, Your Investment..?

Your investment after Modified India

Yesterday, the 16^th general election result has come in India and the people of India has given a clear mandate to a non congress party first time since independence. It is the welcome sign for our lovely country. During last 10 year, India has witnessed the policy logjam, stagnant growth, ballooning inflation and a number of scam and weak leadership. The leadership has completely failed to inspire the citizen. Therefore this time the citizen of India has given clear mandate for powerful and growth oriented government.

After elected NDA government with full majority, now the important question has raised in the investor’s mind what to do with their investment. The share market is trading at all time in these days after the hope of new government. The share market was not delivering the good return after 2009 so many of investor now rushing to sell their investment and want to recover some investment or want to book some profit. In my opinion, do not make that mistake of selling your investment at the moment. Stay invested with your investment objective and focus on your long term investment. Some of investor now worried about new investment in the share market but in my opinion any time is good time to start investment and do the regular investment in regular interval to counter the volatility of the market.

The effect of good governance and growth oriented policy making will be seen automatically in our economy but it will take time and an investor should wait for that with patience. I again say to all my reader that do not exit at present from the share market investment unless you need very badly. You will reap spectacular return in coming couple of years. Keep your SIP investment according to your investment mandate and focus on your financial plan.In India, our domestic investor still under invested in equity market. If you have not invested in equity market till date I would say start invest now, there are still growth potential in our market.

If you have any query about investment and financial planning, feel free to ask us. You can send your query to our email id.

Warm regards,

Arvind Trivedi

Certified Financial Planner

www.artofinvest.com

Monday, May 12, 2014

Pre Election Result Market Rally

Pre pool result market rally….!!!

I was travelling since last 12 days that is why I was not available on my blog in these days. I was travelling across 3 states UP, MP & Maharashtra. I have observed that people are very keen to change in our political system. Markets are at new high as Nifty above 7,000 and sensex above 23,600 with the hope of strong and stable government after 16 May result announcement. The last 10 year our country had witnessed slow decision process, languishing growth and high inflation.

The market expectations are very high and at present no one know the exact direction of the market. Many stocks are still trading from its fair value in spite of all time market high. What should do an investor or trader at this time? It is the common question asked by many of my friends and investors.

In my opinion, election result is an event like other events. For long term and SIP investors I would like to say that the short term moment in the market may be sharp but when we invest in stock market our view should be long term and focus on macro level. We should not put much emphasis on the election result. Investor should stay invested in the market and should take the decision of exit from current investments or change in asset allocation with the help of qualified financial planner and according to your financial goal.

For trader I would urge with folding hands they must put stop loss when they do make any position specially future and option trader. As market my goes towards any direction after election result outcome so be cautious if you are short term trader and want to participate in this event.

Only election result in not the only crucial factor for financial market there are many other factors like inflation rate, IIP data, GDP data, Fiscal deficit, trade deficit, capital inflow, global market and many many others factors. Your sole focus should not only on a particular event. In short term market react very sharp on the events but in long run market reflect the real economy.

If you want more information regarding investment or you have any other query about investment feel free to ask us.

Warm regards,

Arvind Trivedi

Certified Financial Planner

Friday, May 2, 2014

Is Endowment Plan with guaranteed return good for you?

Endowment Plan with Guaranteed return…!!!!

I have discussed in my earlier blogs about endowment policies. In fact these types of policies failed both purpose insurance coverage and return. Neither it provides proper insurance coverage nor gives the good return. I get query about almost on daily basis regarding guaranteed saving insurance plan. We Indian investor always like “guaranteed “ word and often trap with this word. We pay a very high price for this word.

One of my blog reader has asked recently whether he should purchase ICICI prudential guaranteed saving insurance plan. In my opinion, never invest in those product which provide insurance and investment opportunity both. The selling pitch of these products often so attractive that investor do not resist themselves from such type of product.

The realty of these products that it do not give the proper coverage and it also not give the good return. This particular product gives only 5% return on your paid annual premium and provide only 20-25 times insurance cover of your annual premium. If you go with term insurance you can get up to 700 times insurance cover of your annual premium.

For return point of view if you have conservative risk approach and invest in other debt product like debt mutual fund, PPF, bank FD and others the you will get easily return between 8% to 10% return. If you want to lock your money for more than 10 year then equity investment can give you average 15% return. Many mutual fund schemes like ICICI prudential dynamic fund, Birla SL 95 ELSS has given more than 20% return also.

In endowment product 5% return is not good return according to me after 15-20 year investment. In endowment scheme who guarantee the fix return have many types of expenses and hefty agent commission like 15% to 20%. It badly affects your return on investment. Endowment guarantee plans are only beneficial to agents who are selling this product through emotional sales pitch.

I would like to advise all of my reader that they should avoid such type of products and invest in those avenues which are capable to beat the inflation and provide good return also. Liquidity is also the crucial factor at the time investment.

If you want more information regarding investment or you have any other query about investment feel free to ask us.

Warm regards,

Arvind Trivedi

Certified Financial Planner