Indian Stock Market is fast approaching the sky. Many small investors are interested to invest their small savings in the Stock Market. But they don’t know the basic elements of the market. So, they are not certain about such investments.

Mutual Funds provide the best options and choice for them. It is a myth that there is no risk factor involved in mutual funds. But the proportion of risk factor in case of shares is high. I’m a small investor and I want to invest a small amount in the market for two or three years. Then, I should go for the Mutual Funds rather than the equity shares. Mutual Funds give good returns after a long time period. Let us think that it is a good day for the market. It has closed on a strong note. But tomorrow, its performance might go down. The small investors need not be nervous about these matters. Mutual Funds are always giving steady returns. It is clear that high risks mean high returns and small risks mean low returns.

Before investing, the investors really need to know about selected Mutual Funds and the company profiles they intend to put their hard earned money. Some investors are interested to invest in equity for quick earning. But without any well-experienced financial advisors, doing that is just a blind gambling for any investor. I want a high returns because I take high risks. That should not be the rule. One should not take un-necessary risks. For such investors, Mutual Funds are the best alternatives. Before investing, please read all the papers about all the top Mutual funds. You should have to verify its last 2 or 3 year’s performance from highly reliable sources. Do your homework properly. As it is all about your money, never shy to ask an expert. The consistency of the company in the market is very important. Compare between five-year returns and three-year returns and then, take the decision. If you are searching for good returns then a five-year return is the better option.

In a five-year term, some companies are giving 17-19% returns annually. It is somehow related to the equity markets. In some schemes you’ll find 16% absolute returns for three-year. But we’ll consider the risk factors. The companies of equity market also offer mutual funds option. You should have to be careful about selecting the sector of the company too. Technology, automobiles and financial services are the major sectors performing well in Mutual funds. The top sectors are consistently performing well in their scheme. So it is quite good to select the top sectors.

Article from Competition Refresher, June 2003 Issue

In India, reform in direct and indirect taxes is the buzzword. Reform in sales tax is happening at a fast pace and the Value-Added Tax (VAT) is the most happening area. VAT, which originated in France in 1955, is implemented in more than a hundred countries.
In India, though the process of switch over to VAT from a single point levy of tax was initiated in 1993, the progress gained momentum only in the last three years. One of the main reasons is the inadequate familiarity with VAT.
VAT is, in fact a general sales tax, which avoids the ‘cascading’ effect on product of duties/taxes levied at different stages in the process of production on the final output. It encourages vertical integration of firms engaged in commodity and thereby reduces cost of production. In export trade, it provides a competitive edge to domestic industry in the international market and thereby encourages exports from the country.
VAT has emerged as one of the most important fiscal innovations of the past century. In 1990s alone about 50 countries adopted this tax bringing the total number of VAT countries to more than 115. India has also adopted VAT at the federal level.

VAT is certainly administered with a revenue sharing mechanism. On November 16, 1999 the Conference of the Chief Ministers and Finance Ministers resolved to have uniform floor rates of sales tax. The Conference also decided to stop giving sales tax related incentives to the new industrial units in all the States. While these resolutions have been implemented, the economic analysis along with organization and operational aspects of sales tax in India has received scanty attention for a tax, which yields more than 60% of the States own revenue.

‘Services’ constitute a very heterogeneous spectrum of economic activities. Over a period of time, the definition of ‘service’ has also undergone change. In older days, it was difficult to separate ‘services’ from the service providers and recipient. People were crucial to the definition of service. Today services cover wide range of activities such as management, banking, insurance, hospitality, administration, communication, entertainment, wholesale distribution and retailing including Research and Development (R & D) activities. Service sector is now occupying the center stage of the economy so much so that in the contemporary world, development of service sector has become synonymous with the advancement of the economy.

The share of service sector in the real Gross Domestic Product (GDP) in India has surpassed that of agriculture and industry at a relatively faster pace as compared to other industrialized nations. Service sector has become the main contributor to the GDP not merely in developed economies like the United States, Japan and the United Kingdom but also in developing economies like China, Indonesia, Pakistan and Brazil.

Pioneering State

Haryana is the first State that has adhered to the timetable or VAT implementation and has adopted a VAT system effective from April 1, 2003. in a meeting of Empowered Committee on VAT held on April 8, 2003, an additional fifteen States and two Union Territories have committed to implement VAT on June 1, 2003.

While the first and primary objective of introducing a VAT system is to increase the competitiveness of Indian industry by removing the cascading effect of the various State taxes, an important objective is to also ensure that variations in rates are removed across the nation. But many states have been lagging behind the timetable to implement VAT due to unprepared ness for efficient and effective implementation of the system. I this regard the Confederation Of Indian Industry has highlighted certain measures implemented by Haryana that have enabled the State to put place both the technological and regulatory mechanism needed for the smooth transaction to a VAT regime.

First, Haryana has undertaken the automatic allotment of new Tax Identification Number (TIN) to existing registered dealers. The dealers have been asked to submit a Fact sheet within a month for issue of New Registration Certificate. This has cut short the procedural hassles of submitting a fresh application for attainment of a TIN.

Second, Haryana has permitted tax credit on opening stock of tax paid goods on April 1, 2003. Information about credit availed to be given in the Fact Sheet within a month.

Third, manufacturers have been allowed to purchase all raw materials and consumable at 4% in the rate, otherwise, is higher. No list of raw materials has been specified for this purpose. The only exceptions are petrol, HSD, super LDO and LDO.

Fourth, full adjustment of tax paid on capital goods has been allowed on receipt. The State Government has also adopted a simple definition for capital goods, wherein capital goods cover all plant, machinery, dies, tools and equipment provided such purchase is capitalized.

Fifth, dealers having purchase of taxable goods above Rs. 100,000 and upto Rs. 2500,000 in a year have been given option to pay 1% tax on their purchase value subject to minimum of Rs. 900 per month and they need not maintain any sale accounts. This will aid in simplifying in the tax administration system. However, CII feels that the minimum tax of Rs. 900 per month is on the higher side.

In any case, history tells us that when the Fed begins to raise rates, the equity market fears higher rates. However, once the Fed stops raising rates, the party is just beginning. That’s because the Fed only raises rates when it thinks the economy is strong enough to justify higher rates, which implies good times for corporate profits. Remember what the stock market did in the years following the 1993 rate increases? Adjustments in the discount rate usually lag behind changes in the funds rate. Banks are in the business of making loans and when the growing economy triggers a boom in loan demand the banks will accommodate that loan demand. After that, a rising number of loans will create rising bank deposits, which will require increased bank reserves. The Fed will accommodate that increased loan demand at its target interest rate. If the Fed decides to lean against the wind, bingo—it will jack up the fed funds rate. The Fed’s role is to accommodate actual loan-demand regardless, and to use the fed funds rate to either moderate or stimulate that demand. Productivity is mitigating the need for bank borrowing.

The Discount Rate is the interest rate charged by the Federal Reserve when banks borrow “overnight” from the Fed. The discount rate is under the direct control of the Fed. The discount rate is always lower than the Federal Funds Rate. As of April 1997, the discount rate was 5.00%. Us rate have now been on hold at 5.25% for a year.

The Federal Funds Rate is the interest rate charged by banks when banks borrow “overnight” from each other. The funds rate fluctuates according to supply and demand and is not under the direct control of the Fed, but is strongly influenced by the Fed’s actions. Woe to the markets if that growth rate exceeded the bands set by the Fed.

Another interest rate of significant interest is the Prime Rate, the interest that a bank charges its “best” customers. There is no single prime rate, but the commercial banks generally offer the same prime rate. The Fed does not adjust a bank’s prime rate directly, but indirectly. The change in discount rates will affect the prime rate. As of April, 1997 the prime rate is 8.5%.

Housing stocks also took a tumble as fears over rising interest rates translated to higher mortgage rates, default probabilities of floating-rate mortgages, and a slump in new and used home sales. After the stock market closed down triple digits, business-media moguls espoused the notion that good times were about to end—rising inflation, raising interest rates, stock market collapse, bankruptcies, etc. Few follow money-supply growth rates any more, and the St. Louis Fed no longer draws those strange little trend lines to denote what the “right” rate of money-growth should be. Interest rates will go up because the economy will grow and the demand for money will grow, and when the Fed decides that it’s time for short-term interest rates to go up, it will raise the fed funds rate.

Source: citringroup.com

Article by Kay J

Source: stressfreetrading.com

Investing in bonds and stock market investing are classified as investing in securities. Your risk appetite decides how much to invest and in which class. However during inflation times bonds give lower returns, but still are more safe as compaired to stocks. Stock prices are volatile and have more risk associated with them, but can yeild more.

Allocate your money between stocks and bonds according to your age level. The older you are, the more money you should put into bonds. The younger you are, the more money you should put into stocks. Stock market investing should involve buying shares of companies with a history of growth.

There different sizes and categories of shares- large, mid and small caps and penny stocks. A beginner should invest in large and mid cap companies and he can consider investing a small portion in small caps and hot penny stocks only after he has gained experience. These small caps and hot penny stocks are the riskiest but give the largest returns if handled properly which needs expertise and nerves of steel.

You can’t just leap right into stock market investing, it takes time and education to learn the various aspects of the business. As your experience and knowledge grows, it becomes prudent to invest over the long term rather than putting all of your eggs in one basket.

Some people may find investing in bonds simpler than investing in stocks. Your banking professional or personal broker can provide you with lists of government bonds and highly rated corporate bonds to choose from. To compare the two, bond investing provides a higher return for a longer investment, whereas investing in shares has more flexible options for long and short term investments.

Do not consider the tips from others on which share to buy especially in the case of riskiest investments such as hot penny stocks. You can consider these risky investment options only after thorough research on the company concerned and all other related factors has been done. Have a good time investing!

Securities can broadly be classified as bonds and stocks. Bond investing is safer compared to stocks but bonds give lower returns, particularly during inflationary times. Stock market investing, on the other hand, is more profitable and more risky as well. Different categories of stocks are: large, mid and small caps, and penny stocks. Beginners should invest in large and mid cap stocks. With experience, you can consider investing in small cap and hot penny stocks. Stocks are prone to risks but if handled properly they can give huge returns. If you’re looking for a simpler investment strategy than stock trading, consider investing in bonds.

- Christopher Smith

Source: stressfreetrading.com

It takes patience, a good sense of timing, and financial resources to become a successful stock trader. If you have enough money to open a brokerage account, you can see what the market brings you. Trading is similar to gambling in that the action moves quickly and you can make or lose money fast. Trading discipline and prior experience can help prevent investing in the market from being too difficult or painful. In the current markets, longevity means success, so here are a few recommendations on how to keep trading for the long haul.

Investing in the market is easier than being a successful stock trader, since trading requires more time and dedication. Thousands of experts in the stock market devote their careers to trading, and the competition is tough. However, amateur traders do also succeed; when that happens, it’s often due to their knack at setting and adhering to trading rules, as well as to their tolerance for occasional financial setbacks even when they have adhered to the rules.

When people trade with the goal of turning a profit, the bad experience of losing money can be so unnerving that it causes trading discipline to quickly break down. This can lead to irrational decision-making and even more losses as the trader attempts to recoup the losses. A great trader of the 20th century wrote that traders should avoid the vices of fear, hope, and greed.

Basic timing plays an important role in the difference between profit and loss, especially in the myopic world of daytrading. Because most trades are for “fast money,” it’s when such a trade quickly turns into a loss that the need for patience is highest. A trader never wants a trade to become an investment, but it’s also vital to avoid “overtrading” and hangin on one’s own set of trading rules is the finest way to obviate that mistake.

Timing stock, like timing the markets, takes time to learn and master. Observing, and analyzing the amount of stocks traded and it’s price movement, will enable one to learn to observe the moment when it is best to sell the stock. When a trader learns to do this successfully, the cost for a new investor can return a high yield.

Finally, enough capital to be independent is an essential requirement for the successful day trader. Compared to all logistical concerns, the access to funding tends to have the most significant impact as it sets the tone for the trading activity and may have bearing on the final result. At a bare minimum, funding must be sufficient to absorb expected trading losses; however, it is crucial that everyday living expenses do not ever get compromised or dependent on the outcome of a trade. Trading should only use funds that can afford to be lost. As such, an individual that plans to daytrade for a living can plan on tens of thousands to hundreds of thousands of dollars of start up costs.

A successful stock trader takes dedication, formulation of rules, stick to them, and prepare loss. It is difficult when things appear not to work and losses are mounting. Decisions become irrational. Fear, hope, and greed are best avoided by trader. Day trading is timing profit and loss. Trading discipline takes patience and following the formula when a trade turns to a loss to avoid “overtrading”. Experience teaches timing and patience, important when timing the market, reading signals, and spotting trends. The amount treaded determines dividends. Can you absorb the losses? When you start trading the largest offset is how much you will invest could make you a Market Wizard.

- Mark Crisp

Source: financialresourcesdirectory.rediffblogs.com

Besides your credit score and the other five qualifications you must meet to finance a real estate mortgage loan, you need to gather papers and documents. Speed up your financing and make your life easier. Organize your papers into a three-ring binder or file system. You won’t need all of the documentation listed below. However, the more information you gather, the more likely you will be to get the best loan rates. Keep in mind that all of these documents may not be needed for all types of loans.

Documentation Required for Real Estate Mortgage Loan

Whether you want to buy your first home or many investment properties to build wealth, this checklist will help you save money on loan costs.

1. Proof of Income

Include copies of your last two pay stubs or other proof of employment and income verification. If you are receiving fixed income like trust income or social security, then include the beneficiary letter stating how much you get.

For self-employed, you will need to prove that you have been in the same line of work or business for two or more years.

If self-employed, show a copy of your business license for two or three years to show you have been in that business for at least two years. If you don’t have these, then show whatever you do have to evidence you have been in business for at least two years in the same line or business field. You may also ask a CPA to amend your income tax returns for the previous two years and then write a letter verifying that you’ve been self-employed for at least two years.

2. Tax returns

Provide tax returns for the last two years or at least the last two years of W2’s and/or 1099s if you don’t want to disclose tax returns.

If you’re self-employed, the mortgage company may require your personal and business tax returns for the previous two years and your company’s year-to-date Profit and Loss Statement. If you own a business, you may need a Financial Business Statement prepared by an accountant.

3. Bank account records

Gather your account numbers, address of your bank branch, along with checking and savings account statements for the previous two-to-twelve months. You only need the last two months’ bank statements in most cases. Most lenders will only need twelve months bank statements when you are trying to get a “full doc” loan (with the best rates) instead of stated income for a self-employed individual. Talk to your loan officer about whether twelve months of bank statements will help you get a better rate.

Include all bank accounts, savings accounts, retirement accounts, and investment accounts. Include any account that you sign for, even if your spouse also signs on the account, and even if your spouse does not apply for the loan with you. Financial assets like these are considered important by lenders as a reserve, particularly now that property values are not rising as quickly.

4. Driver’s license and social security card photocopies

5. Proof of housing payments

Whether you own or rent, you must document your housing payments. Credit reporting agencies list mortgage payments. Provide copies of your mortgage statements or a copy of your lease agreement with twelve months’ of checks showing rent payments on time.

If you rent your home from a professional management firm, they can verify that you have paid rent on time. If you rent from a private party, most lenders (though not all) will require you to show canceled rent checks for twelve months.

6. Major assets (other real estate owned, automobiles, boats, antiques, stocks, etc.).

You don’t have to include individual stocks if you own shares in a mutual fund or hedge fund. Just provide the latest fund statement. Include vested cash value of whole-life or universal life insurance policy, if any. (Cash value is not the same as the face value. Cash value is what you would get from the insurance company right now, if you surrendered the policy while still alive.) If there are antiques or other collectibles, provide only the total collection value; you don’t have to itemize.

7. List of debts (car loans, furniture loans, student loans, and credit cards)

Even though the debts will be on the credit report, you must be aware of all of your debts so that you can tell if the credit report has mistakes. Include any debts that you have co-signed for, like when you co-sign for a child’s car.

8. Divorce settlement papers, if applicable, no matter how far back in time

9. Delinquent or inaccurate debts or credit report items

If you paid a collection, judgment or lien (especially a tax lien or other lien against your house), include proof of payment.

10. An irrevocable gift letter if you are receiving a monetary gift from a relative.

11. Purchase agreement (for new purchase).

Provide a copy signed by both parties, including all the signed disclosures.12. Items needed for a refinance

Furnish copies of your note and deed of trust, home insurance declaration page, copy of your last property tax bill.

13. If you own investment real estate in your name, you need rental leases for each of your properties, plus the items listed in #12 for each of your properties.

14. Bankruptcy

Supply all pages and schedules for any bankruptcy filing within the last seven years, and the discharge sheet, for any type of bankruptcy (Ch 7, Ch 11 or Ch 13). Bankruptcy must be discharged before the date of the loan application.

Preparation Leads to Financial Freedom

Talk to your loan officer to see which documents you need to copy and send. Prepare your credit and your real estate mortgage loan documents so you can buy your dream home and even multiple investment properties.

Copyright © Jeanette J. Fisher

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posted by Rechard Brown on 01:16 PM 0 Comments

Technorati Tags :- Bankruptcy Credit+Score Debt+Consolidation Mortgage real estate financial article

Thursday, November 16, 2006

Source: financialresourcesdirectory.rediffblogs.com
Most people don’t understand bankruptcy until they are faced with it. Even then, a lot of people still don’t understand what is really happening. In the most general terms, bankruptcy allows a person having financial difficulties to wipe out his or her debt and start fresh. People file bankruptcy for numerous reasons: divorce, unemployment, death in the family, lawsuits, illness, medical bills, foreclosures and credit card debt.

Bankruptcy allows the creditor to receive a fair share of the money that the debtor can pay back, while giving the debtor a fresh start. There are two types of bankruptcy to fulfill this need: Chapter 7 and Chapter 13.

Under a Chapter 7 bankruptcy, all unsecured debts are wiped out. These debts include medical bills, legal fees, utilities, deficiency balances and credit card debt. The debtor may lose property to the court that will be sold in order to pay creditors. There are certain debts that will remain. By law, they cannot be discharged through Chapter 7. These debts include alimony, child support, taxes, certain student loans and debts from fraud, larceny and fines.

Chapter 13 bankruptcy helps people with regular incomes that wish to pay their debts but are unable to do so at the current time. With court supervision, a repayment plan is established between the debtor and his creditors that will pay the debts under an extended period of time.

In 2005, a new law was established — the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. So many consumers were abusing bankruptcy. You may have heard of people simply filing for bankruptcy repeatedly. Some simply had their debts discharged and went out and bought until they were in the same situation again. Other consumers needed protection from unethical lenders. This law makes it more difficult for consumers to file for bankruptcy.

Before a bankruptcy can be filed, the debtor must enroll in a credit counseling session. Before the bankruptcy is complete, the debtor must complete a financial management seminar. The consumer will learn to budget, manage money, use credit wisely and the basics of consumer information. These classes aren’t always free, some come with a mandatory fee.

Means testing will also apply to bankruptcy filings. The means test is an effort to force more debtors into Chapter 13. Any debtor who is able to repay 25% of what they owe, or $10,000, to his or her creditors will not be allowed to file for Chapter 7 bankruptcy. Basically, if the debtor is proven to be able to pay back a significant portion of his debts in the next five years, then he should be required to.

Financial advisors will tell you that bankruptcy should be your absolute last option. It will ruin your credit history. It isn’t easy to be granted bankruptcy and it isn’t easy to get over it. You should consider every available option before you decide to file bankruptcy. Often, you can go ahead and attend a consumer financial management class. Learn how to get out of debt and avoid bankruptcy.

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posted by Rechard Brown on 04:34 PM 0 Comments

Technorati Tags :- Bankruptcy Credit+Score Debt+Consolidation Mortgage real estate financial article

Monday, December 11, 2006