Be Safe and Smart with Your Investments

Moneylife Foundation’s ‘How To Be Safe and Smart with Your Investments’ was back on the last day of October, for those looking to start the new year after Diwali with their finances in good shape


The first step to sensible financial planning is not to lose your hard-earned savings. In the session on ‘safe investing’, Sucheta Dalal spoke about the numerous ways in which some of the smartest people are duped of their savings. It is always the quest for a slightly higher return or the greed for unlikely riches that lands people in such predicaments. 

Once you have your core nest egg safe, you need to think of smart investment that beats inflation and provides you a steady return. Debashis Basu pointed out that with increased longevity, people need to think ahead and prepare for a few decades of living on their savings—this means that you cannot afford to make mistakes that will drill a hole in your savings.
Ms Dalal explained how ‘ponzi schemes’  and multi-level marketing (MLM) companies are fooling people by promising extraordinary returns and how the ‘advanced fee’ scam, which is among the fastest growing con-games in the world, is increasingly targeting Indians. She described the various manifestations of this scam, including the ‘Nigerian’ scam, the job scam, escrow account scam, etc. She also made a mention of errant ‘relationship managers’ of banks, whose primary objective is to earn a fee for their organisation. In order to be safe, one should have all such promises documented through email queries, she said.
She went on to discuss the various issues of misinformation in the financial markets and how the media is a part of the eco-system that does the financial consumer no favours. She spoke of Moneylife Foundation’s new free Credit Helpline. Her session focused on the safety aspect of investing in the financial markets and who the financial consumer could look to for guidance when things do go wrong.
Mr Basu’s presentation was titled, “Salary Cannot Make You Rich, What Can?” Mr Basu started by saying that everyone needs to save at least 25% of one’s earnings and explained why it has become such a necessity. To the young students in the audience, he explained the power of compounding and urged them to start saving at least a little bit, regularly, every month and re-invest it to make the savings grow. Mr Basu took the audience through various asset classes and financial concepts, to provide clarity on how to understand the risks and returns that are possible from each. “The best way to invest smartly is to start as early as possible and save as much as possible,” said Mr Basu.
Mr Basu said that the stock market gives the highest returns because of the nature of asset class. For those who do not want to dabble in the stock market directly, mutual funds could be an option. But, for best results, you have to remain invested for the long term. He discussed the example of HDFC Equity Fund which has delivered 44 times return over 20 years. But if you had invested Rs100,000 in this Fund in January 1995, after four years, by December 1998, the returns were minus 7.8%—enough to frustrate even the die-hard believers. The lesson is simple: the long-term return of a good quality fund or stock is higher. But the ride is never smooth.


Govt unveils new draft civil aviation policy

The government has proposed to accord high priority to provide air connectivity to remote, difficult and interior areas of the country and focusing on building and modernising airports in Tier-II and Tier-III cities


To meet the challenges of burgeoning air traffic, connecting remote areas, creating aviation hubs, ensuring safety and security and liberalising bilaterals to move towards an 'open sky', a new draft civil aviation policy has been framed by the government.

The new Civil Aviation Policy is expected to be in place by January 2015. While releasing the Draft Civil Aviation Policy in Delhi, Civil Aviation Minister Ashok Gajapathi Raju Pusapati, said, “it aims to develop a transparent policy in which regulations for the Civil Aviation sector would be more meaningful.”

The policy, which was drafted and approved by the erstwhile United Progressive Alliance (UPA-II) government, has undergone a fresh review under the Bharatiya Janata Party (BJP)-led regime with additional thrust being given on remote area connectivity.

V Somasundaran, secretary, Civil Aviation, said, “As per the draft, airports are to be designed as integrated multi-modal hubs, so that they provide the best possible service levels as well as potential for growth. An integrated multi-modal hub should include rail, metro, bus and truck connectivity as well as accommodation and other services”.

The draft Civil Aviation Policy, on which the government would seek the views of all stakeholders, would also focus on encouraging regional airlines and suggest steps to move towards lower fares to make aviation affordable.

The draft policy is likely to come up with suggestions regarding jet fuel prices and heavy taxation on it which pose a major roadblock for airlines and consequently, development of aviation hubs in various parts of the country.

The need to coordinate development of tourism and promotion of 'brand India' in a concerted manner may also form part of the policy.

It is not only likely to recommend steps to develop global hubs in India but also establish domestic regional hubs to cater to the growing air traffic from non-metro destinations in remote areas like the northeast.

The government has been according high priority to provide air connectivity to remote, difficult and interior areas of the country and focusing on building and modernising airports in Tier-II and Tier-III cities.

The policy may also come up with a review of the rule, which allows an Indian carrier to fly abroad only after five years of domestic operations and after it has a 20-aircraft fleet.

However, the proposals, many of which were made public over several months for an open debate, have come under criticism from various quarters, including the airlines, which have been saying that high costs of fuel, aircraft and spares, mainly due to taxation, have disrupted the spread of air connectivity to remote areas.


Pulse Beat

Medical developments from around the world


Ebola in New York 

The first doctor-patient in New York has created headlines the world over. He did not follow his quarantine rules properly and travelled in the subway while incubating the disease. It will be tough to find out exactly who he may have come in contact with. There is now some suspicion that Ebola might even be transmitted through air! That is quite scary. India must get ready to face the threat anytime now.
How Germs Seek New Victims for Their Own Survival 
A look at the ubiquitous cold viruses teaches us many important lessons. While they proliferate in the nose, they induce sneezing which is the easiest way to spread the virus to new victims. However, the virus takes care to see that it does not make the patient unfit to go about his/her daily work thus gaining access to more victims. This is how nature works for every living organism. They try to survive even under hostile conditions.
Is India Polio Free? 
Areport originating from the Rotary International claimed that India is, finally, polio free. I was happy, as any sane person should be. However, I was intrigued about the fact that the report emanated from a so-called service organisation. Do they really know the intricacies of this statement? Ever since we started vaccinating every child in India, even those with severe malnutrition, a new disease has come to the fore, the ‘non-polio paralytic disease’. The hapless children who have contracted this disease are paralysed for life. I wonder if the new disease has been properly investigated with viral fingerprinting, to rule out the vaccine virus having mutated in the gut of malnourished kids. The timing of the onset of this new epidemic is highly suspicious. Will some wise authorities explain this to the lay people please?
Blood Pressure Medication 
I had written a book on hypertension in 1993 in which I had stated that blood pressure counts of only above 100/60 need to be considered for drug treatment. I had mentioned that the lower cut-off points were engineered by drug companies to increase their profits. I was criticised about this by many at that time. Now, the Cochrane group says the same thing with the cut-off point at 159/99! Co-author of this Cochrane review, James M Wright, MD, PhD, physician, researcher, pharmacologist and professor at the University of British Columbia (Vancouver) had this to say on the subject. “The blood pressure should not be reduced below 140/90 and reducing to lower levels might be associated with dangerous side-effects. The drugs should be started only after the level reaches 159/99.” He now asks his patients to reduce drugs that they are on and even goes to the extent of asking them to gradually stop drugs if they have reached 140/90 and have a healthy lifestyle.
These were the very sentences in my 1993 book! What made me happy is that Professor Wright feels that thiazide diuretics are the only safe anti-BP drugs—another one of the statements in my book. I have again learnt, to my dismay, that one should not be ahead of one’s time!


We are listening!

Solve the equation and enter in the Captcha field.

To continue

Sign Up or Sign In


To continue

Sign Up or Sign In



The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)