Retirement : Inoperative PF Accounts To Earn Interest from 1st April

In a move that will enthuse account-holders of inoperative employees’ provident fund (EPF) accounts, the Employees’ Provident Fund Organisation (EPFO) has decided to provide interest on inoperative accounts from 1 April 2016. This will benefit over 90 million such account-holders having total deposits of over Rs32,000 crore. EPFO had stopped payment of interest to such accounts from 1 April 2011 to discourage parking of funds with EPFO in these dormant accounts. Inoperative accounts are those in which the contribution has not been received for 36 months. 

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Short-term-itis
Most investment professionals and fund managers preach that investors should not invest in equity mutual funds with a short-term outlook. However, when we analysed the monthly portfolios of equity schemes having a corpus of over Rs1,000 crore, we found that while most fund managers talk the talk, they fail to walk the walk. In our analysis of 59 equity schemes, out of the total number of stocks bought, on an average, only 8% of the stocks were held for five years or more. Just about 16% of the stocks remained in their portfolios for a period of 3-5 years and as many as 38% of the stocks were sold within a year. The high proportion of stocks sold-off within a year shows that fund managers have a totally confused investing strategy and are swayed by short-term price movements rather than staying focused on the long term. Can this short-termism affect the performance of a scheme? Or do fund investors benefit from this buying and selling? Turn to our Cover Story to find out.
 
As a corollary to our Cover Story, in our Fund Pointer section, we analyse which stocks fund managers held continuously for a period of five years or more. We find that schemes maintaining a long-term focus did well. But few have the conviction. Most of the stocks were held for the short term.
 
Fast-moving consumer goods (FMCG) companies have done very well for the past 20 years or so making enormous wealth for those who have stayed invested. However, it is time to examine whether they will deliver equally great results in the future. R Balakrishnan lists the challenges they face to sustain their high returns in future.
 
When it comes to India, the Panama Papers have been a damp squib. Maybe, Indians have their money in some other tax havens. The government has set up a committee to examine the issues; but will the revelations also lead us think about sensible tax policies, asks Sucheta in her Different Strokes column. In her Crosshairs section, Sucheta questions whether Patanjali’s breakneck expansion into biscuits and noodles is to spread Ayurveda or simply empire-building.

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Pulse Beat

Integrated Medicine for the Future

A recent day-long workshop, on the future of healing, came up with the need for bringing all systems of medicine, without any caste system, under one roof; picking the best in every system would be the best for the future of medicine. This needs lots of hard work to bring disparate elements like the egoistic Western medical doctors and naturopaths under one roof. The meeting concluded that it can only be done if each of these doctors left their elephantine egos behind and began working for the good of mankind. Every system is fallible but has good effects under many circumstances. The time has come to give up the wrong notion that diagnosis is the most important part medical-care, before we do anything else. This myth, though blown over scientifically decades ago, does not go away as diagnostic tests are big money-spinners. This meeting gave me a ray of hope for mankind. Let us hope that wisdom will dawn on doctors to work collectively to do most good to most people most of the time.
 

Cholesterol Is a Friend!

What I had been shouting from housetops for decades has now come to the attention of the powers that be in the US. Cholesterol is not bad for health; in fact, it is good for health. There is nothing like good and bad cholesterol. LDL, HDL and other classes are all myths. We have killed millions over the years by calling cholesterol a ghost. Now, even the US doctors are joining the bandwagon to decry the cholesterol mania; they were on the same bandwagon until the other day. But the Indian faithful doctors are yet to join in. They still harp on statins for lowering cholesterol. Probably they aren’t interested in saving human lives.
 

New Light on Alzheimer’s Disease

People living in a new Pacific island of Guam (a US territory) have shown the relationship between some environmental toxins and Alzheimer’s and also some other neurodegenerative diseases. This toxin is found in some lakes and soil of that island. This might give us a clue to search for some such environmental toxins in other patients also.
The relation between amyloid plaques and Alzheimer’s is well known. The bad news is that bad gums, with bad halitosis, could be a very important risk for Alzheimer’s. Gum disease can also speed up the progress of this disease.
 

Digital Mammograms Have Collateral Benefits

Digital mammograms, when they show calcification of the breast arteries, could be a pointer for calcification of coronary arteries thereby warning women to take care of their hearts as well. That should not be an excuse for doing mammograms as the latter could be counter-productive. 

 

Day’s Naps, Sitting & Exertion

Daytime sleeping is not a good health practice, although short naps might help to build your health. Any nap longer than 40 minutes is really bad during the daytime, when the sun is up. In a large study, people found that sitting in one place for more than three hours at a time, on a long-term basis, has killed more than 43,000 people per year. Do not sit for a long time and sitting is bad for health. These days, the younger generation going to the gym has cultivated a new way of intensifying their exercise levels to lose more calories and get better body shape. Studies have shown that such short bouts of intense exertion without long warm up and equally long cooling could even bring on a heart attack. Moderation in every walk of life is good for health. Daily low-grade exercise, the best being normal walking, is the best insurance against premature deaths and all kinds of illnesses including cancer and stroke.

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