Stay clear of Real Estate in India because the bubble is going to burst if it has not already. RBI is increasing interest rates which will make financing expensive as if recent rate hike is not enough, more trouble may lie ahead Worst not over for Fragile Five - Jan. 30, 2014 . Home prices are going to drop as new home inventory builds up. With weakening currency, interest rates will only have to go up.
The Investment Thread
- Thread starter Yogesh Sarkar
- Start date
I had one year experience with investing in foreign bonds and I am pretty happy with it. I have to give credit to Europe and Japan. Despite their financial problems, they have maintained their credit obligations and currency values. As a result, foreign bond returns are much better than US bond returns even accounting for exchange rates. In future, I am going to add more foreign bonds both for diversification and returns.
I have bought shares for inverse etf today as I think the bull market has given 6 years of positive returns and negative returns would be in horizon. So, I am hedging now. This derivative driven strategy is always risky and no one should hold more than 1% of the portfolio allocation in inverse etf. In my case, I am only keeping it to 0.5% of the portfolio. Keeping a low percentage of inverse ETF is always beneficial as it gives you stocks to sell at a high price 100% of the time. If market is high you can sell regular etf. If it is low then you can sell inverse etf. Today market was all time high so I bought inverse etf at all time low price. When inverse etfs are kept below 1% of the overall portfolio value, they actual lead to low risk portfolio (hedge fund). The key thing is not to get carried away because then you can create a mess of this whole thing.
joie de vivre
Guru
One more good thing from the budget......additional Rs 1 lakh will get exemption under section 80CCD.
The interest rates in US will rise in about a few months as inflation is showing up (Look out: 'Burrito inflation' is here - Jul. 20, 2014 ). This will be bad for Indian economy as well because $1 will fetch more than 
61 when that happens. Also, cost of petrol in India will rise whenever US interest rates go up. Stocks will fall when interest rates go up. Best strategy is to make sure you have short term bonds in the portfolio to counteract this move.
61 when that happens. Also, cost of petrol in India will rise whenever US interest rates go up. Stocks will fall when interest rates go up. Best strategy is to make sure you have short term bonds in the portfolio to counteract this move.
hackernewbie
Guru
I have been investing in a small SIP for the last 2 years or so and now want to go a step further in investing in few more Mutual Funds (short-terms, the existing one has a loc-in period of 3 yrs).
Where should I start ?
Where should I start ?
Yogesh Sarkar
Administrator
It is actually a bad time to invest short term. We are in a bull market and there is no guarantee that the market will keep going up for next year or so. So it is better to make long term investments at the moment, of course without the lock in period.
hackernewbie
Guru
Long-term as in how long?
Another bigger SIP?
Yogesh Sarkar
Administrator
2-3 years at the very least. So that investment averages out. Of course do this without any lock in, so that you can stop SIP or take out money any time you want.
But they say on TV or in newspapers that you need atleast 5-7 years horizon to get decent returns from equity MFs and longer the tenure, more the returns...