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While global economy crisis what type of investment will be the safest?

While global economy crisis, investing in post office savings schemes and bank fixed deposits and debt bonds issued by the mutual fund companies will be the safest. According to the individual’s financial status, kind of deposit can be chosen.

Profitable investments are not safe. Is it true?

Investing in huge profit giving schemes is an healthy one. But short term investors may affect due to fluctuation in capital market. Better to avoid these plans by the pensioners and those who are planned for savings for children education and marriage of their wards.

Which plans are suitable for middle class people?

Middle class people should plan their savings/investments depends up on their age, financial status, short term needs and future long term needs. Investment and Insurance should be fixed by the individual’s needs. One’s plan is suitable for another. But everyone should evaluate their investment annually.

What are the qualifications for Financial Advisor?

The person who has analyzed the global economy along with awareness about the investment plans available and its merits and demerits for the investors’ feasibility can become Financial Advisor.

Keeping money idle on home, or on land or on gold is not an real investment. This is nothing but savings. That’s all.

Real investment means creating movable and immovable assets so as to helping manufacturing goods. It determining the revenue of nation, expenses of consumers, industrial investment, government expenses, export / import. Among these investment in the second one is highly fluctuated.

-Normal days, the price on consumable things is highly fluctuated.

-Government expenditure is also stipulated under control.

-Export Import will be depends upon the comparative advantage of the country.

-Industrial investment only be varied in huge volume in a year.

If the growth in economy is better, investors who investing in new trends will be more. Now the universal trends in a better way stimulates the investors to invest in companies. Small companies also develop their office area for their feasibility. New equipment may be bought for their industries. Larger companies are going abroad to purchase machines for their companies.

Second thing is, investment on goods and the requisite interest for borrowings will be the criteria for measuring the size of investment. If the bank raises the interest the number of investors will be dwindled because it is unhealthy to the industries.

Now a days if we reading news paper, we can see the commodities hike and inflation, cash reserve ratio, rate of bank interest etc., If the consumer price index is raised by 6.5% the price of the consumer goods are raised to $106.5. In order to calculate the price index the commodities which are accountable of food products, daily usage products, long term usage products, fuel products. Hence price of these products and its fluctuation is calculated for CPI.

Why price of consumer goods are hiking?. Due to the demand of products are raised or reduction in production of goods. Demand means consumer product, investment, government expenditure, and export.

If the reserve bank raises interest to other banks they in turn will raise interest to the loans availed by consumers, industries. So, investors curb their expenses and come forward to invest. By this, demand of consumer products will be automatically reduced and in turn the price of consumer products also reduced and ultimately the inflation come down.

For instance, if the deposit $100 is received by bank, $6 will keep and $94 offer for loan, because, it will facilitate to refund if the depositor wants to withdrawn their amount . Normally all depositors don’t want to withdrawn their amount at a stretch. Hence $94 will be issued as loan by the bank.

Just like the CRR is fixed by the Reserve bank. If it needs to reduce the loan for industries/investment then the CRR should be raised by 6% to 7% or more which leads reduction in demand.

This are all the criteria for country economy. So real investment is imperative for growth of country economy.

Adequate cash holding will be the strengthened one. Isn’t it?

Cash holding by the individual will be kept for adequacy depends up on their requirement. For instance, salaried person may be held cash balance which is equal to 6 month’s expenditure. Nevertheless, without investing/saving, keeping their whole income is an unhealthy one and it will cause hindering the individual’s financial development.

Let us see now about share market, mutual funds, fixed deposits.

Investments should be varied for share market, mutual funds, fixed deposits because of time duration.

While investing in share/capital market we should aware of profit and loss during previous days of the company and also about its growth, future planning of firm etc., because our investment will be directly shared in the company.

Mutual fund is a fund which is managed by Banks and Private companies. Sum received from the investors will be managed by Fund Managers investing in equities, debt bonds issued by government institutions and debentures issued by banks / private companies. Profit/loss received will be disbursed to the investors by equally shared based on their investment.

Fixed deposit schemes are suitable for aged persons, and those saving for short term needs and those don’t want to take risk. These schemes are offered by banks , post offices and some private companies.

Before investing you should be aware about the private companies in which you are going to make an investment. But, capital market investments are subject to market risk though some times it may give high returns. At the same time, investing in mutual funds can mitigate risk of loss because,mutual funds are managed by Fund Managers. But both these investments should be a long term basis i.e. 5 to 10 years is advisable.

What should be kept in mind while taking decision to select life insurance policies?

While taking decision for selecting life insurance policies there should not be a common method. Need of everyone is varied in different stages. Conveying about the assured value $1 million, $ 5million, $10 million by the agents will not be suitable for all. The decision should be taken for taking policies by considering the individual’s age, income, debt, liabilities, children’s education, pensionary benefits etc.

Our elders say. “ invest in land and gold” is this suitable now a days?

Investing in land and gold is being followed by all at all time. As an investment basis if we purchase gold coins and later if it convert into jewels there will be loss in shape of jewel making charges and gold loss during making jewels. In order to avoid such loss, there will be an opportunity to invest in gold as 1 gram units. Also this type of investment facilitates us to reduce unfortunate theft and tax etc.,

Also, there will be chance to convert as cash depends up on the emergent requirement of everyone. Investing in land will help for their heirs which is appreciable in a long term basis. But, for a short term it is not advisable. Investing in gold should not be exceeding 5 to 10 percentage of income is better one.

 As an introduction first I would like say that there will be a change for each and everybody at the various stages depends up on their financial position. Based on this, they have to plan for their future. Especially in the life of youth, there will be from 30 to 35 years, they can earn. So, they have to plan based on this earnings. i.e., Children’s education, constructing house, Children marriage, medical expenses in old age and maintenance. Hence, financial advisor is essential for not only for bigger companies but in everyone’s life.

Can we get financial advise for those having one or two millions? As far as financial management is concerned it is quite mistake for only those having huge money. Also the financial management is emphatic for the people those having one or two million dollars or investing a smaller sum monthly on recurring basis. So, financial management is a long term plan for every one.

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