Sixth Pay Commission is amongts the top search term on Internet !

Look at the recent top search term by google reveals that Sixth pay commission was amongst the top searched term on internet.

Recently in November 2008 Uttar Pradesh government has approved to implement the recommendations of 6th pay commission. This scheme will benefit nearly more then 18 lakh state employees and will be applicable from first of December.

The state will have to shell out more then 4000 crore to meet the requirement of pay scale hike including Dearness allowance and The pay scale will come in force with retrospective effect from January 1, 2006. The arrears of salary, DA and pension will be paid in three instalments in the next three years. The total burden on account of the arrears is over Rs 13,000 crore.

Part of the arrear will be paid in cash during the current fiscal 2008-09. The remaining amount will be deposited in the provident fund account of the employees in two parts in 2009-10 and 2010-11. House rent allowance will also be paid on the basis of 6th pay commission recommendation. No wonder for so many state employee would be searching the term online to find out how much more money they have made !

Good Luck to all the state employees for this long overdue bonus !

How much Insurance should I have in this terrorizing times in which we live in ?

Thursday 27,2008 whole of Mumbai woke up to the news of the terrorist blast and many of the prime places being occupied by terrorist including the TAJ hotel and Oberoi Hotel with number of hostages. To my utter surprise it did not create any shock or alert in my mind or body. It seems that all of Mumbaikars are just used to it. Used to bomb blast, mumbai bandh, rasta roko and all other political stuff. Can you imagine how much importance the value of life has detiriorated.

Its only if our near and dear ones are affected by such tragedies we get a reaction that too for few days and then again life comes to same old routine. It sends shivers to my mind just of thought that if I am died what would happen to my family and children. NOBODY in this world can replace a Father or a Husband or a Son. It made me feel little easy that I had taken enough Life Insurance Cover for my life so that my family will be little easy economically in case of any eventuality.

I strongly recommend each and every earning member of a House be it a Husband or a Father to have enough Life protection to PROTECT there FAMILY from the unknown terrors of this times we live in .

Thumb rule is every body should be covered bare MINIMUM for more then 60 times there monthly salary. Ideal case should be 100 times of there monthly salary if possible.

Top performing ELSS fund for the month of October 2008

Few of the Top performing ELSS fund for the month of October 2008.

1) UTI Long Term Advantage S2 (G)
2) Sundaram Tax Saver (G)
3) Reliance Tax Saver (ELSS) (G)

What is a Portfolio Re-balancing strategy and how can it help me in economic downturn ?

What is portfolio re-balancing and how is it done ?

stage 1:
Lets assume initial ratio of investment is as follows
Equity : 50%
Debt : 50%

stage 2:
Markets rise rapidly and give very high returns and so the equity component grows faster as compare to debt such that now equity is more then 75%.
Equity : 75%
Debt : 25%

Since market has risen so much and there is high probability of it going down then going up. so its better to sell some of your Equity component and move it to debt fund. you can sell 25% of equity and invest this 25% in debt.
This will re-balance your portfolio to the initial ratio of 50 - 50

Stage 3:
Markets crashes dramatically and equity gives you a maybe even -ve returns and the debt gives you better return and your equity-debt ratio gets skewed such that
Equity : 25%
Debt : 75%

Now in this scenario you should rebalanced your portfolio such that you take 25% of your money from debt and invest it in Equity and make the ratio as was the case initially to 50% - 50%.

NOTE:
you can have your own initial fixed ratio maybe not 50-50 but 60-40 or vice-versa depending on your risk appetite. you can even decide the criteria when to rebalanced your portfolio but the idea is as and when markets give phenomenal results you need to book partial profit. and when the markets crash you need to invest when equity get cheap thereby you getting more units.

Happy Investing !

Mutual Funds portfolio is showing a loss ! what should I do in this markets ?

Markets by there very nature will always either go UP or go DOWN. Its a know fact over the years market will surprise most of the times to most of the people. I knew of people who predicting the markets will touch an index 25000 in january 2008 when it was around 20000 now the same people a predicting doom, they are predicting market will go down to 5000 . This may be true or may be not, but the point is markets will always surprise and you need to have patient and understand that it will behave the way it is.

The following are few Rules to follow during tough times.

1) The smartest set of investors are those who even in this trying times dont stop there investment Plans. You should continue doing your SIP in good funds.

2) Analyze your Mutual Fund portfolio or get it analyzed by a Financial professional.
Get rid of the non-performing funds. (The funds which has given comparatively lesser returns then the benchmark or it's similar comparable peer group of considerable amount of time)

3) Get rid of aggressive funds and move more of your allocation to more stable large cap funds.

4) If you cannot accept too much risk then opt for a Balanced Funds.

5) STICK to you Financial plans; do not change your investing plans with short term fluctuations in markets.

This ups and downs are more of an opportunity for us to buy things at a cheaper price.
Try to look for oppurtunity in every adversity !

LIC Jeeven Saral ; 250 times insurance cover of Monthly installment.

Death Benefit:
250 times the monthly premium + loyalty additions + return of premiums excluding first year premiums and extra/rider premium, if any, is payable in lump sum on death of the life assured during the term of the policy.

Maturity Benefit:
The Maturity Sum Assured plus Loyalty additions, if any, is payable in a lump sum. (e.g This can come to more then Rs. 40 lakhs if you are investing Rs 5000 per month for 25 years at the rate of 10%)

Surrender Value:
surrender value will be the greater of the guaranteed surrender value and special surrender. The plan also allows for partial surrenders.

Guaranteed Surrender Value:
The policy can be surrendered after it has been in force for at least 3 full years. The Guaranteed Surrender value will be equal to 30% of the total amount of premiums paid excluding the premiums for the first year and all the extra premiums and premiums for accident benefit / term rider.

Special Surrender Value:
80% of Maturity Sum Assured if 3 or more years’ but less than 4 years’ premiums have been paid; 90% of the Maturity Sum Assured, if 4 or more years’ but less than 5 years’ premiums have been paid and 100% of the Maturity Sum Assured, if 5 or more years’ premiums have been paid. The Maturity Sum Assured for this para will be the Maturity Sum Assured corresponding to the term for which premiums have been paid under the policy.

UTI Mastershare Declaring dividends year after year even in this bearish market as well !

UTI Mastershare Lambi race ka goda !

UTI's Mastershare has been in the market for now over more then two decades.
It has declared dividend every year since its launch in 1986.

I thought this year it will be difficult to declare dividend when there is liquidity crunch but again they have announced a dividend of 22% (Re.2.20 per unit on a face value of Rs.10/-). The record date for the dividend is October 23, 2008.
The scheme has also rewarded its investors with 3 bonuses and 2 rights during its existance.

Ms Swati Kulkarni, fund manager of the scheme said, “UTI Mastershare has a 22 year acquaintance with its investors. The scheme has consistently declared dividends year after year since its launch in 1986, irrespective of the market phases. UTI Mastershare, a large cap oriented fund, that invests, in a well diversified portfolio of fundamentally strong companies. The scheme is trusted by over 6 lakh investors and has a fund size of Rs.1689 crore”

I would recommend this Fund for the people who want regular yearly income through tax free dividends. The last five year returns is above 15% compounded annually this is when the markets are at sub 11k levels.