Investors India - September 2013

Magazine Description

In this issue

The world thrives on hope. It’s a good thing to do, otherwise all economic activity would come to a standstill. When a business produces goods or renders services, it is in hope that the same would be consumed by others. There is no surety or guarantee that he would be able to sell the product or service. There is just hope backed by a careful analysis of the market. This applies to investment markets too. There are temporary phases when nothing seems to be working. These are tough periods and the pain is accentuated by doomsayers predicting financial Armageddon in various forms of media. However, one must not forget that we have survived the Great Depression of the 1930s in the USA, the Asian Currency Crisis in 1997, the dotcom bust in 2000 and the Great Financial Crisis in 2008. Still, people have continued to invest and make money. One thus needs to stay positive. Staying positive doesn’t mean ignoring the reality and keep committing mistakes. For instance, if growth is slowing, it will be fool hardy to ignore the writing on the wall, keep concocting positive stories and keep investing in asset classes that thrive on growth. There is always a money making opportunity somewhere round the corner. Staying positive is about finding an opportunity to benefit even in the wake of prevalent concerns. When growth slows it is time to invest in bonds. Similarly when currency depreciates, it is time to invest in Gold ETFs or global equity funds. Despite weaker growth and multiple other concerns during the last 3-4 years, haven’t we seen bond funds, gold funds and global equity funds give reasonably attractive returns? Ms. Anubha Singhania, an expert in investing and the co-author of the book titled “Fundamentals of Investing in Equities and Assets that Create Wealth” has been contributing to the magazine for quite some time with her insightful views on investment markets and how investors should shape their attitudes for their benefit. We have renamed her column aptly as “The Prudent Investor”. In this issue, she has written about the potential red flags in a company’s financial statements that an investor should look for before making an investment in a company. I found them pragmatic and truly insightful. Following these guidelines will enhance one’s ability to analyse a company and lower the risk in investments. Coffee has become a social drink and a necessary evil. People are so eager to get that instance ‘kick’ from coffee that they conveniently ignore its harmful effects. The Lifestyle Planning article in this issue compiles the opinions of reputed research houses from all over the world on the harmful effects of coffee. Hope this will help readers in limiting their coffee consumption and move towards a healthier lifestyle. Prudent Investing!