WARNING!!! Earthquake- Build The Right Home

Whenever we start earning, our first instinct is to buy a land or house for ourselves. Of course some like to simply splurge on- but that is not what we are discussing here. For the last few years I am seeing the rush to buy apartments in the Doon Valley. The only criterion that is followed is to have a good view of Mussourie, all other parameters are simply ignored or dwarfed. No one is interested in finding out how the sewage will be taken care of or from where will the water come in next 3 years.
The builders are simply finding  small areas anywhere in the nooks and corners, behind and below each and every small hillock. They have even encroached the River bed and built seven floors on stilts.
As you may be well aware that Dehradun lies along the most seismically sensitive area- and as I have learnt from few Geologists, that thee Rispana lies along a fault line, especially near the northern part of the Doon valley .
The kind of earthquake that we witnessed last night on 6th Feb2017 night is exactly what is waiting to happen. There are no calculations for the past earthquakes proffered yet, so obviously all these so called multi-storied apartments are also built without taking any calculations into account.
I am not discouraging the reader from buying a home for himself , it is a must and you must buy it if it is a must.However do not ignore even one aspect of safety- since more than your money- your and your family's life depends on it.
In 1993 , I had myself bought a home (not an apartment) and I could not actually check the architectural strength of it because the owner had disguised it very nicely. Soon after purchase one of the walls started sinking and developed cracks. In those days I employed all the engineering skills I had learnt on board and inserted 7 RCC pillars without breaking the terrace slab.
In the process I learnt much about the topography of Dehradun.
More than my engineering skills , the reader must take my financial advice and build a structurally resilient home for himself- the old fashioned way. Buy the land- then build. None of the apartments are cheaper than a house that you would build for yourself.
Think in terms of using alternative materials, including imported wood, prefab elements.Line up the roof with Solar PV cells, Follow the engineer from Chennai  - whom I had featured on my FB page- and build a completely self sustaining home for yourself.
http://asc-india.org/seismi/seis-uttaranchal.htm

ALERT!!! CRITICAL TIMES AHEAD

ALERT!!! CRITICAL TIMES AHEAD.

Normally such warnings of doomsday are a plenty on the net.

But my warning is clearly related to the Finance field.
As the Sensex and Nifty are galloping away into the sun- there is a sense of unabashed optimism everywhere.
MFs have overtaken Insurance as investors in the market and people are headed towards MFs in throngs.
Whenever there is such optimism, there is a reason to pause and look around.I do not mean in the pessimistic way- but just caution.Most of the calamities and disasters have taken place when people were not watching enough.
So now as the market seem to be only headed in one direction I have some advice for different set of people, especially the seafarers- because it is them that I understand better.
1. Those who are young: They must NOT make any bulk purchases and must continue their regular purchases via the SIP or better still STP route. In a volatile market higher frequency of STP gives better results. So you can even switch from weekly mode to Daily mode if it is offered by your MF. i.e. if you have a 5000/- per week STP, you may change it to Rs.1000/- per day.If on monthly mode then you may go in for weekly mode. Since SIPs are offered on monthly basis- it may put you in some inconvenience to start 5 SIPs for every fund.

2. Those who are in the middle age group and about 10 years away from retirement- should review the funds in their portfolio and make a switch if required. Do not be misguided by which fund gave best returns last year or last 2 years. Go by a performance of at least 5 years. Further they should maintain the Equity to debt ratio of 75:25 or 80:20. If due to market going up the portfolio becomes heavy on Equity- then switch to the debt schemes and bring the ratio back.

3. Those who are near retirement should maintain a more conservative ratio of Eq:Debt of 60:40 but should not go below that otherwise their portfolio value may start eroding.
4. So remember to AVOID BULK PURCHASE or BULK investment even if you have a windfall or a have come across lately into large money. At such high levels even a drop of 2% in the indexes may not exactly give you value buying. So just stick to disciplined investing- it has shown to work best.
 

The Changing Times

" These are the times of Light and darkness, these are the times of hope and despair"- Dickens in his famous epic- A Tale of Two cities.

This was not said of only the times in which the novel is set, it can be said of any time in any history.Beacuse it was only the time that was always changing as also eulogised in the opening commentary of TV serial Mahabharata - " Main Samay Hoon..."

Present time is also same- no different from 20 years back or 50...or 100 or even 1000.It will continue like this too- only the people witnessing will keep changing.

For those who care to see and observe objectively- present time is no different than the era preceding the Independence date when the constitution was being written.

A slow and steady movement is taking place ... Just like the Constitution-the most important religious book is being written called the GST code.A book that will change the entire environment in which we live and breathe- and pay graft.

In the process of this GST draft being written- things have taken place which cannot be believed and a Federal form of Governance is growing deep and firm.

The centre has given away and further giving away- it's bargaining power and Authority to allocate funds to different states. This must be the only Second Magna Carta being signed.

No longer will a Montek Singh Ahluwalia have to keep a Chief Minister waiting for 2 hours to listen to his plea of funds for development.

A new and an interesting fund.

In the field of Finance and Investment , very often it is the lack of information that prevents a person from making gains...I guess it same with life.
Today while searching around for some new modes in the Large Cap space- I came across a gem- well apparently.
I searched deeper and found that it was even better than what appeared on surface.
Ladies and Gentlemen Welcome to CPSE-ETF. I had to really look around and pinch myself to believe that the fund was launched by Reliance a more than 2 years ago.
As in the case of ETF:
1.You can buy it on a stock market like shares with getting the price of your choice.
2.AMC charges are very minimal-0.07%
3.Liquidity is very high.
Such funds if in normal MF mode tend to have a risk of having too few investors.In case of ETF this may not be so, especially as the fund as an asset base of 2284 crores.
There are a few points that make it high on risk:
1. The fund is very high on risk due to concentration into very few companies- 10 at present.
2.Exposure to top company (ONGC at present ) is as high as 24.5%
3. Exposure to top sector is 77%- as the ETF has NIFTY PSE index as it's benchmark.
4.The fund largely reflects the PSU energy companies and hence is a highly specialised SECTOR fund. Thus it carries the associated risk of a sector fund.
In my opinion the fund is high on risk but for Seafarers who are well invested - they may try investing here with nimble foots and SIP way.
You will have to do it on your stock trading platform.
Last year the fund gave 5.3% higher return than the next best in Large Cap category.

Disclaimer: This is a discussion forum. So please do some research on your own too- and discuss it here. I am just proceeding to buy this thru my broker.

Financial Plan for a Young Professional

A young professional asked for a plan where:
1. He could park his 1.0 lacs for about 2.5 years.
2.Have a Emergency Fund- he wanted to know how much he should have.
3.Invest a monthly investible surplus of Rs.60k/month.
4.Save his taxes.

Maneuvering within the restrictions , this is my plan considering his background and age.

I had to plan a little more seriously for you since the time span that you have mentioned is a little short of what we call long term and a lot more than Short term.

So I will give you a plan:

• 1.       Keep the Rs.1.0lacs (of surplus) in Dynamic bond Funds (list attached). Pref. being for BSL Dynamic Bond Fund, HDFC Hi-Interest fund-Dynamic Plan; ICICI Long Term Plan- all in Growth Option and Direct Mode so that you don’t have to shell out any commissions. Dynamic Bond- this fund is as good as a saving bank account and can be redeemed and received in your bank account the next day before 10AM. The returns over 3 to 5 years in these entirely Non-Equity have been stupendous and I have reason to believe that they will give over 10% for next few years.
•  
• 2.       Now with your monthly Kitty of 60k you will proceed as follows- to invest INTO EQUITY funds through STP instead of SIP.
•  
• i)                    With the 60K of this month proceed to deposit in HDFC Cash Management Fund-Treasury Plan- GROWTH option-DIRECT mode. Having done this set up a WEEKLY STP of Rs.7500 per week into HDFC BALANCED FUND- GROWTH PLAN- DIRECT MODE. This will transfer 7500x5=37500 every month and still leave some balance for STP for next month.
• ii)                   Next month: with the next Month’s Rs.60,000 start another investment in ICICI Pru Liquid Plan-Direct Plan and at the same time set up a STP of Rs.2000 from this fund into ICICI Pru Long Term Equity (Tax Saving fund)-Growth-Direct Plan. This will take care of your investment and TAX saving at the same time. Also start a STP of Rs.3000 from ICICI Pru Liquid Plan-Growth-Direct to ICICI Pru Value Discovery Fund-growth option-Direct. (So total Stp’s in this fund will be Rs.25K per month).
• iii)                 Further next month AFTER THAT  Invest your 60K in DSPBR Money Manager Fund-Growth Option-Direct. Once the Folio is created start STP of Rs.2000 per week from this fund into DSPBR Micro Cap Fund-Growth-Direct and a STP of Rs.3000 per week in DSPBR Small and Mid Cap fund-Growth-Direct.
• iv)                 In the 4^th month – again TOP up HDFC CASH Mgmt Fund. In the 5^th month Top up ICICI Pru Liquid Fund, in the 6^th month- DSPBR…ad inifinitum.
•  
• 3.       The above plan will ensure your tax saving to the max, at the same time investment in Stocks of all capitalization. In addition it will ensure that you have money available in Liquid funds at all given time. Your Liquid funds will never exhaust and your Equity investments will continue with due RISK mitigation across all market conditions.
• 4.       Even if you chose not to top up the Liquid funds- the STPs will automatically stop once the amount in Liquid funds exhausts. This will not pose any risk or legal binding on you. In ICICI once you deposit money in the source scheme of the STP , the STP will automatically start.
• 5.       I have not used the entire 60K for STPs every month , so that it lasts till you put money again into the Liquid Fund. You can divide 30k into any 2 funds every month or 20K into all 3 every month. Once you start- you will be able to judge and decide for yourself.
• 6.       You will only have to visit any of the above Mutual Fund office ONCE to start your investment. Your KYC data will be updated . Then you can start ANY investment in ANY fund from your PC- -in DIRECT mode. This will give you a saving of 1-1.2% in commission every year.
• 7.       For any other information you can visit valueresearchonline.com

Being a non-conformist and being a being a contrarian for the sake of being one are two separate things. Fighting with ghosts and shadows is not same as facing reality. Reacting to news is also not always the best recourse. There cannot be everything right with a idea or a policy- there also cannot everything wrong.Wisdom lies in appreciating the rainbow for a while but then having the capacity and intelligence to separate each and every color in your mind and be capable of admiring it too- because even a rainbow if moved at a considerable speed will only appear white.

The Demon of Demonetisation.

The Demon of Demonetisation.

People are definitely facing immense inconvenience in the face of this currency crisis (lets call it CC).Most of the people who are facing the heat are either the rich who did not bother to have a backup in form of legitimate money and non paper assets; and the Very Poor - who could not open a bank account due to various reasons.

These reasons were their lack of ID proof, not willing to lose a day's wages in going to open account etc.

But mostly it is the sniggering attitude towards the government announcements and policies.

The previous governments have made us have that attitude- because they ever used to mean what they say.

NOW... to all the readers of this piece , I ask one thing!

We the people, are aspiring to be like the residents of developed countries in terms of latest mobiles, cars, branded clothes, Single Malt Whiskey's etc. But what mediocrity we are steeped in that most of these luxuries are paid for in cash, otherwise how is it that in NCR the number of cars are more than the Income tax payees. If you are on New York airport , you cannot buy a cup of coffee with cash.

Start from morning....You consume breakfast for which you can pay by bank transfer from mobile to the friendly neighbourhood "poor" vendor. He can pay back to his dealer the same way who can pay back upwards. Next comes your taxi- which too is paid in Uber or Ola money.

I remember the movie called Police Academy II. Eddie Murphy asks the local Police Chief- " Do you have a $20 bill ". Chief replies " I'm a married man with 2 children in college, haven't seen a $20 bill in 5 years.

This is of course a joke. But on reason why inflation is going up in India and making things expensive is too much loose money chasing too few goods and services. As a result the supplier of those goods and services controls the price. Just watch in a ffew days how restaurants offer happy hours and Car mfrs offer discounts. 

Why do you think toothpastes and edible oils in the supermarkets are cheaper than the neighbourhood  Lala?

It was always the middle class who paid their taxes and took the government announcements seriously- both the other classes ignored the country and are now paying for it.

Even if we undergo a small operation on the toe it is painful.This is a major operation of the entire nation. The people who are guilty are most quiet.Once again it is the vigilant and upright middle class that is speaking out.But they are being wrongly fed with incorrect information.

By the virtue of Demonetisation of this currency , the government (or RBI to be specific) will be able to bring  or inject all those cash notes that were not in the banking system back into the system. This will enable money is available to only those to whom it rightly belongs.

It is so very fascinating to see that the premium that you paid for your second apartment,and extra money you paid wrongfully to get certain goods and services will be removed from the system-automatically.

For once the government is ahead of the unscrupulous elements. 

Don't you remember seeing your neighbors in government services getting new cars, ipads,house facelift, furnishings and expensive gadgets just before the month of March ended.

That was all your money which will come back to you- but indirectly.

Please stand up to face the hardship, after this a lot will change... and most of it will be for your good..