Co..m..m..o.n...INDIA-wake up.....wait till end 2009 for revival..GET READY.

The global economic slowdown, recession, depression, you name it as you like.The reality is something which we have to face and experience.Banks are getting the rescue from US govt which includes bailout package of $20 billions for world's largest bank citibank chaired by india born Vikram Pandit who took charge last september.But nothing has been changed so far.Losses includes $308 billions in various forms.Nothing can be changed over night.It takes time.US president elect Obama says, he will take at least one year and six months to come out of this.Hence we all have to wait and watch how the US economy progresses and the rest of the economies includes europe and japan, other asian powers emerge in the next couple of years.India at its end was growing at a descent rate of 7 to 8 percent in 2006-07, now the estimate has come down to a minimal of 5 percent.The growth rate of 5 percent is enough for india to surge.India as a nation and its corporate honchos should learn to diversify their businesses across the globe unlike the only business relationship with US.Gone are the days when US dominated as a supreme nation with a financial supremacy across globe, now its turn of emerging economies to lead the globe.

The soveriegn wealth funds managed by GCC gave around $20 billions to the world bank to help US financial institutions

Cost cutting is the order of the year

Gone are the days which were full of news related to outsourcing, mergers and acquisitions, take overs of indian companies abroad.We heard about TATA-CORUS deal,TATA-JAGUAR,TCS-CITI group deal of $500 millions. Now the deals are in a doubtful stage.The management of these companies dont know how to sustain the profitability in these deals due to the financial meltdown globally.Problem with citi group financial losses stands at $25 billions till date which raised the eyebrows of TCS buyout of CITI's BPO business which is worth $500 millions, the largest in the indian IT market deals till date.

The financial crisis has forced companies to cut costs on their various expenses such as salary and perks, travel related expenses etc.Similarly it has affected all expansion plans for the firms across globe with the postponing of various mergers and take over plans.The major factor is finance and the long term sustainance for which the firms are struggling now.

The heat is flowing through various modes e.g firms like kirloskar brothers is cutting costs on its travel expenses like not using luxury taxies instead using tata indica on emergency.

The TATA YAZAKI plans not to use electricity after 6 pm in the office premises.
For BHARAT FORGE, only GM's and VP's can avail air travel in economy class.

This is what is happening in india based MNC's.Companies now have been careful about their cost.They didnt care anything when there is a boom for their products and services across the globe but now feeling the heat of not taking care of their finances earlier and suffering.

Cash has been the key and king now a days.Companies who saved their cash profits instead investing hugely on recruitments, expansions and mergers etc are in safe heaven.

Hence we all should remember that bad times comes and it wipes out everything in a click of a mouse, but the long term players with a broad vision sustains in the market place.

The morale of the story is "Save for the rainy day" which applies to individuals and companies across globe too.

Global meltdown and its effect on indian economy

Indians have great power of resistance and patience unlike the global community who are feeling the heat now a days due to global financial crisis.The common man is passing through a river full of fire due to the laggardness and mismanagement of the finances of US govt which spreaded across globe.

The US govt is responsible for the financial crisis.

The banks and financial institutions were just the followers of the Govt.

They did what they were told to do, lent money to everybody not by looking at thier credit worthiness but just to create a scenario of " Home for all", so created a bubble of loans.At last it got burst.

and we all suffered.

How Your Use of Alcohol Affects Life Insurance Costs

The Society of Actuaries says that alcohol abuse may take off anywhere from 10 to 15 years of your life. But did you know it can also raise your life insurance premiums?
When applying for life insurance, you will have to answer questions on the application related to your alcohol use. There is no actual insurance ruling on "problem drinkers" or "alcoholics," but excessive drinking can lead to certain medical conditions which will ultimately affect what insurance rate a life insurance company assigns you. It's very rare that you will be denied coverage based on the answer you give, but it may prompt a further investigation into your life and use of alcohol.
Red flags

When a life insurance company is reviewing your application and records, there are a couple of things they look for that may "red flag " you as a risk:
• Liver enzymes.
If you took a blood test, your life insurance company may test a sample for liver enzymes. If levels are elevated, it may mean there is an alcohol-related medical problem. Also, if you're not a drinker, elevated levels may signal there is something seriously wrong with your health. A decision for your life insurance will be postponed until you meet with a doctor and find the reason your liver is not functioning like normal.

• Drunk driving conviction.
Even if it was your first time and an isolated incident, if you were cited with a drunk driving conviction, you might get a higher premium because it's a red flag for alcohol abuse. If you get a DWI, your life insurance company will be more prone to search through your record, to see if there is more than just the one cited incident.

• Attending physician's statement (APS).
An APS is a statement that your insurance company requests from your doctor or physician regarding your health.
It is used to check for anything that shows alcohol is affecting your health. It may have the same information that you wrote down in your application, but if your doctor has concerns about your drinking, they will be included as well.
Survey says
The underwriter gets to make the decision on what happens if they notice one or more of the above red flags while reviewing your life insurance application. They can either:
• Issue the policy
• Offer you a more expensive life insurance policy (due to concerns on alcohol abuse or medical conditions)
• Decline your application
• Postpone your application
• Seek out further information from you and your doctor(s) and order a blood test to aid in the informational investigation
Admission to drinking
If you received a DWI a couple of years ago, and you take a life insurance medical exam now and it comes back with high enzyme results for your liver, or you admit to drinking heavily, your insurance premium may be highly unaffordable. If, on the other hand, you admit to drinking heavily, but the tests come back that you have normal liver functions and you have no current DWIs on record, you may get standard rates.
Getting lower premiums
Depending on what red flags your tests threw up, there are different things that you can do that will get your premiums lowered:
• Flat extra premium.
Recent or multiple drunk driving convictions may lead to a flat extra premium being tacked on to your regular life insurance premium. These fees will typically disappear anywhere from two to five years after your last conviction

• Lessen your drinking.
You don't have to quit entirely, but even reducing your drinking to a moderate level can help you get lower premiums. Be sure to document dates and visit your doctor so he/she can monitor your progress as well. You can approach your life insurance company over a period of six months to two years, and show them your proactive approach at bettering your health.

• Improve your health.
As stated above, by lessening the amount you drink, getting your liver enzymes in check, and taking better care of your body and health, you should be able to get your life insurance premium lowered. If your insurance company is unwilling to lower your rates, don't be scared to shop around-there will be another underwriter out there who is willing to look at your health improvements and give you a better quote.
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The Rise in Terrorism Has Caused a Rise in Life Insurance

After the 9/11 terrorist attacks, a rise in concern for family and future, as well as in the number of people buying life insurance, erupted.
The tragedies of 9/11 awakened many people to the importance of having life insurance. As terrorism concerns lingered and built, life insurance agents saw a continuous increase in life insurance policy sales.
According to the MIB Group database (which holds information from both American and Canadian life and health insurance companies) there was an increase of almost two percent in life insurance applications in 2002, following the attacks of 9/11.
Buying life insurance
Be sure to do your homework when it comes to buying life insurance. Whether you are looking to buy a new plan, increase coverage, or if this is your first time buying life insurance, be sure to shop around. Looking online can help when trying to compare different insurance companies and their features. Also, talking to an actual life insurance agent can also be beneficial as you shop around for rates and terms. When dealing with an agent or filling out an application online, be sure to give the most accurate and detailed information possible. This will help you find the best and most accurate life insurance rate quote for your money.
If you’re healthy say NO to guaranteed issue life insurance policies
If you’re healthy, there is no reason to buy into guaranteed issue, simplified issue, or quick issue life insurance policies. They are more risky and more expensive than regular term life insurance policies, because medical information and exams are not required, meaning anyone can buy them.
Don’t let prices make you buy something you do not need or want, and be sure to ask questions if you’re confused. It’s better to understand exactly what you’re doing before you sign, rather than waiting until after to start asking questions.

Reviewing the Growing Market for Mutual Funds in India

Reviewing the Growing Market for Mutual Funds in India
Indian households have stepped up their exposure to the capital market. The contribution of funds in this asset class has increased. In fact, there has been more than 2000 per cent growth in the assets coming to MFs in the last 3 years.
As economy grows at a spectacular rate, there is a huge wealth creating opportunities surfacing everywhere.
The Indian mutual fund industry has been through exponential growth and still at a very nascent stage. We believe that the mutual fund industry has grown in terms of size or choices available, but is still a long distance from being regarded as a mature one. To understand this, one has to look at the global scenario.
Today the industry stand at $ 24.32 trillion (September 2007; source: ICI), out of which 41 per cent of the assets is in equity. Looking at the continent-wise asset breakdown, America leads by 51 per cent, while Europe is at 35 per cent and Asia-Pacific is at 10 per cent. Investment advisors have played a vital role in instilling investor’s confidence in mutual funds.
A recent study by Invest India reveals that there are about 32.18 crores paid workers in India. Of this only 53 lakh have an exposure to mutual funds. This is less than 2 per cent of the total workforce. Even more interesting fact is that 77 per cent of them reside in super metros and Tier I cities .Again, about 40 lakh come in the Rs 90,000 – Rs 5 lakh income bracket. The penetration among the less than Rs 90,000 and more than Rs 5 lakh income bracket is very low. The need for the hour is to expand the market boundaries and scope in Tier II and Tier III cities.
Today’s investor is quite young and unlike the older generation, they follow a contrarian’s approach and buy when the market flips and books profit when it rallies. A booming economy with GDP of 8 per cent and a strong regulatory framework are crucial for the fund industry’s growth.
The need of the investor populace has changed, resulting in a change in asset management styles leading to the design of new and competitively-priced products, implying greater emphasis on higher quality of intermediation. This in itself is both an opportunity and a challenge.
Synopsis:
 The global mutual fund industry has grown by 185 per cent between 2000 and 2006. In comparison, Indian assets outgrow at a staggering 446 per cent, where US and Europe grew by 158 and 242 per cent respectively
 India stands only second-best to Korea with HNI assets worth Rs 12 lakh crores in the Asia-pacific region.
 The mutual fund industry has passed through many phases since UTI phase of 1964, public sector phase of 1987, emergence phase of 2003 when international players came to India and finally the new generation phase of 2007 where new players expanded the market.
 Changing investors profile has initiated many market players to innovate new products matching the investor’s profile.

SIP becoming hot in the capital markets menu

Indian households have stepped up their exposure to the capital markets. So it is significant to look at style of investing. Various asset classes have been emerged and people have started taking exposure towards many complex products. At the same time it is crucial to make a risk-return trade off.

Investment market:

Our investment market is maturing and equity has been the preferred asset class among investors. Equity investing which gives high returns as well as high risk. Hence the style of equity investing is essential. Investment advisors have come up with financial planning models and products matching investor’s profiles. At this age, the investing community has to decide about their choices, pattern and safety in terms of capital preservation or to minimize loss.

Investment styles:

Investors do have their own approach towards investing. Many directly invest in sector specific stocks e.g. Satyam or Infosys in the IT category or any other sectoral stocks where fear of loosing money is the highest due to sector concentration and some invest in a mutual fund having a basket of diversified stocks across sectors to minimize risk.

Working of SIP:

Under this facility an investor can invest any fixed amount every month for a per-decided period of time usually six months or one year through post-dated cheques or ECS facility of any bank at applicable NAV prices. This process helps the investor to average out their cost of investments over a period of time and thus overcome the short term fluctuations in the market. This strategy is called dollar cost averaging.

Dollar cost of averaging:

Not many investors can time the market - get in at the bottom and get out at the top for a fat profit. For such investors the dollar cost averaging is the best way to go as it eliminates the market timing decision. With this strategy an investor will always be fully invested to catch the turns in the market. The example below will show how

Regular Investment ( At the 10th of every month )	Unit Price	Units Acquired
100	11.79	8.48
100	12.11	8.26
100	11.17	8.95
100	11.62	8.61
100	13.59	7.36
100	13.82	7.24
100	11.82	8.46
100	10.3	9.71
100	10.38	9.63
100	9.74	10.27
1000	116.34	86.96

Average unit cost to the investor Rs 11.50

Average unit price to the investor Rs 11.63

As given in the table above, the investor own 87 units of the fund by investing Rs 1000.These units become worth more than what the investor has paid for it. The average price for his 10 investments is Rs 11.63. However, the investor has acquired these units at the average price of Rs 11.50.

The idea behind dollar cost averaging is to invest for the long term. That way the investor will be sure to catch the down markets and be fully invested in the up markets. However, he should stick to the investment the down market; otherwise he will be forced to sell units at a loss.

Synopsis:

v In a maturing and risky capital market it is essential that the investors should be systematic in their approach to avoid risk.

v Style of investing through an SIP of a mutual fund is the key for long term investors.

v Dollar cost averaging is key to achieve long term objectives