Recent Turbulence in the Stock Markets

[dahiyars]

Recent Turbulence in the Stock Markets
The volatility being currently witnessed in the stock markets in India is a cause for serious concern. The UPA Government should reverse the capital account liberalization measures initiated by the erstwhile NDA Government and take concrete steps to reduce the vulnerability of the financial system to the flow of speculative capital, as was promised in the NCMP. The Reserve Bank of India (RBI) had also recommended the phasing out of the Participatory Notes (PNs), through which unregistered entities are pushing in huge funds into the capital markets and engaging in speculative activities.
R.S.Dahiya

[rameshlakra]

Invest in real estate, it is much better, and offers much better returns with zero risk.

regards,

[raj2rif]

Dear Lakara Sahab,

Same medicine is not the cure for all the ailments. Similarly investment in Real Estate while has given unrealistic returns, it is the style of investor according to which the investment needs to be made. Basically, most of the investor look for the following characteristics in an investement:

1. It should be easy to invest
2. There should not be any limit on investment (upper or lower)
3. Preferably the invesment if gives tax advantage that helps to minimize the current taxation (thus pre-tax investment)
4. Tax free or tax deferred growth.
5. Tax free withdrwal
6. Easy to liquidate.
7. If help and provides death/disability benefit it only helps.

Now, not all investments have all the characteristics. The investor must look as to what suits his/her requirements and attitude toward investment.

To counter market volatility and fluctuation, the better choice would be the diversification of portfolio as well as time diversification.

While real estate is a great investment, it falls short of expectations on following accounts:
1. probably not suitable for small investors, for the price and cost attached to it.
2. In India, illigal possession may pose additional problem.
3. Liquidity is a big issue in real estate.
4. If you are paying taxes, then capital gain taxation would be another issue.
5. It is some times difficult to find the right property for investment.

I thought I will share my few thoughts.