Bullion & Gold Investment Ideas

Bullion

Precious metals that have a high market demand and market value and are available in bulk are called bullion. They are traded in commodity markets. Gold and silver are favorite avenues of investment for the Indian investors because: 

• They provide a hedge against inflation. 

• Have sentimental and social values attached to them. 

• They have ornamental value and medicinal uses.

Gold is one of the most valuable assets in any economy. It has both financial and sentimental value in India. It is the long-term store of value, is highly liquid and is the asset of last resort.It is easy to buy or sell anytime anywhere. It is a ‘safe haven’ asset. In times of war or international crises, gold price tends to appreciate.The right time to purchase gold is when one understands what it is and what role it plays in one’s portfolio. 

Investors buy gold for Two reasons –

•  To financially gain from increasing gold prices and to use it for hedging against economic, political, and social crises. Although the price of gold is always on the rise and it fetches higher resale value.

• In India Gold retained for the social status associated with it and the feeling of security it gives.

Max Life FY’13 net up 17% at Rs 860 cr

Max Life Insurance on Wednesday reported a growth of 17 per cent in net profit for the fiscal year ended March 2013 at Rs 860 crore as compared to Rs 733 crore during the previous fiscal. Gross written premium of the company grew 4 per cent to Rs 6,639 crore from Rs 6,391 crore in 2011-12. Commenting over the performance, company’s MD & CEO Rajesh Sud said, “Our company has progressed on all business parameters and we have further strengthened our position as the largest non-bank owned private life insurer.” Sud said the growth has been led by continued focus on building a successful life insurance business to deliver the core value of long-term savings and protection.

Variable Income Securities

Bank Deposits,Bonds,PPF,Small Savings Schemes all Fixed Income Investments because their Returns are fixed while we are investing.There are Investment Instruments available whose Returns are variable,called Variable Income Investments.Variable Income Investments Consists mainly of Market based Investments.Investing in Equities/Stocks market also come under Variable Income Comes under.Equity is defined as the ownership interest in the corporation in the form of stocks. It is an important asset class in one’s portfolio. Equity returns can be in the form of dividends or through increase in the price of shares. It is most risky as it is not permanent and also discretionary when comes to payment of dividend. Shareholders carry the reward and risk associated with ownership of enterprises. 

Rewards

Rewards associated with equities include dividends, cash dividends, capital gains, rights issue, voting rights for stockholders, right to information etc. Like any other investment, equity is also not free from risks. The common risks associated with equity include no assurance of profit with certainty, uncertainty over allotment of shares of the company, poor liquidity, and share prices may be highly volatile leading to capital loss.

ELSS Vs Bank Deposits

Equity-linked saving schemes(ELSS)

Equity-linked saving schemes are one of the  Investment option in Mutual Fund,its eligible for tax benefits under Section 80C.ELSS also one of the better investment decision with Tax Benefit.

In ELSS invested Up to Rs 1 lakh in a year is eligible for deduction under Section 80C. However, unlike the life insurance policies,Unlike Insurance Policies,Investment on behalf of a minor & Tax deduction not Possible.No tax is levied when redeem investment after the lock-in period.ELSS funds have more than 65% of their corpus invested in stocks, they enjoy the exemption from tax on long-term capital gains as is the case with any other equity fund. The dividend income is also tax-free.ELSS funds have more than 65% invested in Stocks,so there is no guarantee on returns.

Lock-in period

Three Years is the Lock in Period in this Equity Linked savings scheme.

Minimum Investment

Minimum Investment for the ELSS fund is Rs.500.Investing People can opt SIP For this scheme also.People who wants invest in this fund for Tax benefit,Investments can be made in three or five instalments in a Financial year.This Instalment type of Invesment reducing the risk.ELSS can be better option than Bank Fixed Deposits.

This ELSS Scheme being a Close ended scheme,more than 80 % of Fund Assets invested in Equities,so its High Risk High Return venue of Investment.

MPs likes to put ban on very high returns promising Investment schemes

Everyday Investment Firm s scandal are  ruled out.Scandal news are hitting headlines in any part of our country.Economy Offence wing of Police Department filed a cases against these Scandals most frequently due to People Non awareness on high returns promising Investment schemes 

Indian Members Of Parliament(MP) want ban on investment schemes promising very high returns

Members of a Parliamentary panel on May'17 pressed for blanket ban on investment schemes promising unreasonable returns and demanded that a law be enacted to have a single regulator to deal with all kinds of chit funds.

The Parliamentary Standing Committee on Finance, chaired by BJP leader and former Finance Minister Yashwant Sinha, which met On May'17  to discuss the chit fund scam, was of the view that there should be a "single law and a single regulator" to deal with investment schemes, sources said.

Waiver of Transaction Charges and making charges on e-Gold, e-Silver and e-Platinum for Akshaya Tritiya

NSEL(National Spot Exchange) announced that Waiver of Transaction Charges and making charges on e-Gold, e-Silver and e-Platinum on the auspicious occasion of Akshaya Tritiya.Transaction charges and making charges pertaining to physical conversion of demat units shall be waived off by the exchange as per details.


According to that,there would be no Transaction charges for all transactions of e-Gold, e-Silver and e-Platinum made on 13th May, 2013. 

E-gold is a better option for investors than Gold ETFs.

A small extra return can have a huge impact on your savings over the years. The debate about physical gold versus gold exchange-traded funds, or ETFs, was settled in favor of the latter a long time ago. Now, e-gold, another product that gives exposure to the gold market, is laying claim to the crown.

E-Gold, an electronic way to buy the yellow metal , gives better returns than gold ETFs. In 2012, it returned over 16 per cent compared to the 11 per cent average return given by gold ETFs. In 2011, e-gold and gold ETFs had returned 32 per cent and 31 per cent, respectively.

Experts say E-Gold will always beat gold ETFs in returns as the latter's net asset value, or NAV, is computed after deducting the fee of the asset management company plus storage and custodian charges, which vary from fund to fund. The cost of trading e-gold in the spot market is nominal.

"The advantage of buying E-Gold is cost effectiveness. In e-gold, there are no recurring expenses such as management fee. This reduces the cost and increases returns year-on-year. Thus, e-gold is more effective in the long term," says Anil Rego, founder and chief executive officer, Right Horizons.

E-GOLD VS GOLD ETF

E-gold is held electronically in the demat form and can be freely converted into physical gold. In India, e-gold is offered by the National Spot Exchange Limited (NSEL), which gives investors the option to invest in commodities such as gold, silver and platinum online. 

Any investor can buy gold in small quantities on the NSEL and sell it after making a profit. He also has the option of taking physical delivery of the metal.

Quarterly Review of Investment Products Performance

This Quarterly Review of  Equity,Commodity & Mutual Fund Performance report.In Last Year 2012 Indian Equities has been Performer than Gold,Following this Mutual Funds also Performed well in 2012.

Indian Equity Market NSE s NIFTY has given Negative returns in the First Quarter of 2013,It made 3 % Negative Returns.

In Indian Equity Market Information Technology Index (CNX IT) has made returns 20 % this Quarter of 2013.

Commodity Segment,Gold Futures in MCX Exchange made loss of 4 % this Quarter,Silver Futures in MCX made loss of 8 % this Quarter.Base Metal Complex in MCX also made loss in this Quarter,Copper made loss of 8 % and Lead made loss of 10 % in this Quarter.

E-Platinum is a new way to Invest in Platinium

Platinum is the rarest of all precious metals. It has several unique chemical and physical properties that make it essential in a wide range of industrial and Environmental applications.Platinum is also considered as one of the finest of all jewellary Metals.
Platinum is available as coins and bars with many jewelers today,making for easy availability.But with an eye on returns, this is not really the best mode. 
There are several reasons for this. 

• The Metal Purity is not guaranteed. 
• The wastage charges at the time of re-sale will eat into returns.
• Physical market for platinum is illiquid, quickly cant conversion into cash 
• Physical investment is that you have to look for ways to keep it safe.

Storing the bars in a bank locker will mean shelling out money on rent. Storage also makes a cost for keeping that Metal.

Capital Gains Tax

Any profit or gain arising from the sale or transfer of a capital asset is chargeable to tax under the head ‘capital gains’.It is the income of the previous year in which the transfer of the capital asset took place.Capital gains arising from the transfer of immovable property are chargeable to tax in the previous year, in which the effective transfer of title is conveyed and registered.

There are two types of capital gains – short-term and long-term.Short-term capital gain refers to the capital gain,which has been obtained from the full value of consideration from the transfer of short-term capital assets after reducing permitted deductions.Long-term capital gain refers to the capital gain, which is obtained from the full value of consideration from the transfer of long-term capital assets after permitted deductions.

Capital Gains Exemptions

There are exemptions provided from taxation of capital gains. These exemptions are of two types:

a. Exemption of capital gain under various sub-clauses of Section 10 of the Income Tax act. It contains exempted capital gain in the hands of the various categories of persons.

NIFTY OutPerformer Than Gold In 2012

Equities market has outperformed Gold in 2012.National Stock Exchange NIFTY Gained 27 % in 2012,while Gold made gain of 13% only in 2012.So,Stock Markets are Out Performer in 2012 as per Value Increase.

U S & European Economic worsening & High Inflation made Equities gained less in Last Year 2011.Indian Index NSE NIFTY also followed World markets,made negative returns in Last year.NSE NIFTY made gain of 1281 points in a year due to Indian Government Economic recovery Activities.

Equity Related Mutual Funds & Gold ETF Assets has grown by 18.5% up to Second week of December 2012. It was 5.2 % only during this time Last Year.Mutual Assets has been Increased due to Equity/Stock market Positive rally.

Mutual Fund Investment

In Mutual Funds,Equity Mutual Funds has made return of 32.55 In 2012.If any one invested 1,00,000 in first week of January 2012,His/Her Investment has grown 1,32,500 in the Last week Of December 2012.

Retirement planning

Retirement planning is an important aspect of personal financial planning and is incomplete without it.It is a forward-looking planning. Deciding when to begin retirement life is a big question. Individuals are so much involved in issues like buying a house, changing jobs or starting a family that no time is found to decide on when to start retirement. Irrespective of age and financial picture, planning for retirement should not be ignored. The power of compounding becomes beneficial when early retirement planning is made. 

The first step in retirement planning is to set Retirement goals,It depends change on the situation and conditions of Everyone Life .The next step is to know how much to invest to achieve the retirement goals.The final step is to formulate investment program.

Retirement planning is closely related to investment and tax planning. Investment and investment planning are the two core vehicles, which are used in building up investment for retirement. 

Investing Styles Of Investors

Each investor has a unique style of investing. Investing style refers to the approach, the mindset under which the investors frame their expectations and choose to achieve those objectives. Investing style is determined by the amount and type of resources, time constraints, risk tolerance level and alternative means. The three different investing styles – conservative, moderate, and aggressive. 

Conservative Investor: Conservative investors aim to maintain initial investment. 
When they invest Rs.5,000 conservative investors make sure that they require the initial investment back. Therefore, they invest in less risky investments like bonds and short term money market accounts. Conservative investors are uncomfortable with market volatility; they protect their investment value from inflation effects and have basic knowledge of investment. They prefer shorter time horizon. 

Moderate Investor: Moderate investors increase the value of their portfolio,protecting their assets from losses. They behave like conservative investors but put a portion of their funds in risky investments. They put 50% of their funds in risky investments and the remaining in conservative investments. They have a good understanding of investment markets. They keep a diverse portfolio. They accept moderate risk and prefer moderate to long-term time horizon. 

Objectives Of Ideal Investment

Any Investment we made must some objectives.Objectives only make man to lead their life higher in socially & financially.Man without clear objectives does not aim high.So,Objectives set by every person in their life,but it differs from person to person.Objectives for Investment likely to be needed,An Investment without Objective will be a Meaningless/directionless.Investment objectives play a major role in determining how conservative or aggressive the investor is in making the investment decisions. Having adequate savings and insurance to cover any emergencies that arise, there are certain objectives/goals for an investment that an investor is to be aware of. Goals can be classified into various types based on the way investors approach them. Investment goals vary from individual to individual and at different stages of life for the same individual. The most frequent investment objectives are –Improving/Addition current income, saving for Essential expenses,Retirement planning and Tax Planning

Improving/Addition to Current Income: The idea behind this objective is to invest into those investments that enhance the current income. Investors need additional income due to various reasons such as improving their educational qualification, meeting costly medical expenses of family members etc. They generally tend to invest their funds in safe and liquid investments to achieve these goals.

Choosing/opting a stock/commodity for Investment

Investment made in any Financial Product prior knowledge/awareness of that product needed before Investing.Stocks/Commodities are High risky/High Returns based Financial Product,so,choosing a stock/Commodity a very important/needful thing while Investing.Every action in our day to day life is doing by practice/customs followed by our elders.Operating an Car/Bike/Computer,we go for Proper Training & certified from Professionals for that.Investing in Financial Markets also need Proper Study/understanding of the product will make good returns in the product.Most Of the losses in Shares/Commodities market only by Non-awareness of the product Nature.We Should opting/choosing a stock/Commodity by the way of understanding the positive & Negative things of the Commodity.Proper Trading Plan is the best way to avoid losses in Commodity markets make a way for Profits are flourish in trading.Profits also come only if people are ready to risk also.

The Two Things to require before opting/choosing a commodity for Investment.

1.Fundamental Research/Analysis

2.Technical Research/Analysis

Fundamentals are the First thing to move a Stock/Commodity.Commodities are Seasonal based,its more vulnerable to Fundamentals especially Agri Commodities/Products.
Fundamentals are differ from Commodity to Commodity.One Fundamental Favor for one commodity,but unfavor to an other commodity.Knowing of Fundamental each commodity to get an idea about its Price.Fundamentals are deciding factor for which /what commodity for Investment.

New Pension Scheme(NPS)

New pension plan(NPS) effective from May 1st, 2009. All central government employees who joined service on or after January 2004 are covered under NPS. NPS is a fund management system and a voluntary scheme. Any individual between 18-55 years can apply for NPS. Once the scheme is joined PRAN (Permanent Retirement Account Number) is given to check the funds online or as and when required. The Pension Fund Regulatory and Development Authority (PFRDA) have been assigned the work of protecting people of NPS. It is a government regulatory body of India. PFRDA will appoint a professional who will invest money on behalf of members and charge fees for his service. PFMs are required to offer three kinds of products – Safe, Balanced and Growth products. 

The benefits of joining NPS – 

Voluntary, flexible, simple, portable and regulated. 

Tax Benefits: 

The returns earned from NPS are tax free. NPS falls under ExemptExempt-Tax system, which means, the maturity amount withdrawn will be taxed, which is unlike other pension schemes like PPF, EPF, ULIPs. 

Gold ETF

Exchange Traded Fund: 

Exchange traded funds are investment vehicles traded on the stock exchange.Exchange Traded Funds (ETFs) are innovative products that are available in the USA since 1993.About 60% of trading in American Stock Exchanges takes place in ETFs.ETFs give investors opportunity to buy or sell an entire portfolio, in a single security.They also offer hedging and arbitrage opportunities.They safeguard the interests of long-term investors. Unlike other mutual funds,ETFs are not sold or redeemed at NAV.ETFs enjoy the benefits of diversification, low cost and transparency.There are different types of ETFs – Index ETFs, Commodity ETFs like Gold ETF s, Bond ETFs, Currency ETFs, Actively Managed ETFs, Hedge Fund ETFs, and Leveraged ETFs. They also offer Hedging and Arbitrage opportunities.

Gold ETF

Buying Gold ETF is purchasing gold in electronic form. ETF Buying is just like buying stock of any company from a broker.

ULIP Vs Mutual Funds

ULIP(Unit Linked Insurance Policy) and Mutual Fund(MF),both are Market linked Investment instruments availble retail Investors.In this session,lets see in what way Mutual Funds & ULIP s similarities,differences &  how far both are Best Investment option.

ULIP and Mutual Fund investments offer investors an exposure to a market linked portfolio giving an opportunity to earn positive returns.Both these Investment instruments Clearly different,But these products are very similar in their functioning and structure. These instruments offer investors an exposure to a market linked portfolio.

Similarities

ULIP S and Mutual Funds are Similar in many ways,they are

NAV(Net Asset Value)

Capital Market Exposure

Risk

Systematic Investment Option

Tax Benefit Schemes

Saving Tax is an idea in every Indian s mind.Tax Saving/Planning in India is an application to reduce tax liability through the finest use of all accessible allowances, exclusions, deductions, exemptions, etc, to reduce income and/or capital profits.

Individuals who are salaried in India are planning should know/aware the Tax Planning/Saving Exercise.Without knowing/aware of the Tax Planning People made instruments in the Final minute of Tax Filing & yields negative effect on investment Instrument.

Tax-planning tips that can assist salaried people to reduce their tax accountability in India.Section 80-C is most popular one in India s Tax Planning.Under Section 80 C,Rs.one lakh as maximum reduction for an Individual whose salary is Rs.2.5 lakh or more PA .

If a Person invests more than 1 lakh as investment also,Tax reduction will be given to 1 Lakh Only.

Basic Principles for an Ideal Investment

Simple, basic knowledge of Finance is a powerful tool.The purpose in becoming familiar with these fundamental investing concepts is to make people right decision in their investment decision-making process. Once people have the grasping way of operation, They will be able to take a more active, informed role in the direction of their portfolio, and ultimately their financial future. 

Diversification: Simply, diversification means not putting all eggs in one basket. If one investment bottoms out, One haven’t lost everything.Since stocks respond differently to changes in the economy and the market place, a short-term decline in one can be balanced by others in Investor portfolio, which are currently stable or rising in value. The key, then, is not necessarily the number of assets that people own, but the tendency of those holdings to not move in concert with each other. 

Asset Class Investing: Each basic asset class – stocks, bonds, and cash investments – has specific risk and return characteristics. Stocks can be grouped and evaluated according to their capitalization and whether they perform as growth or value assets. 
For instance, small capitalization (small cap) companies are generally newer, faster growing organizations that consequently carry higher risk than larger capitalization 
(largecap) companies, which tend to be more established, well-known, and have steadier streams of income and profits. Bonds are most commonly evaluated by their 
length of maturity and quality of the borrower.