Butchers of Sopore and Birmingham

Nine years of calm before icy storm

Kashmir turns crimson with blood of Pandits

AN UN-ISLAMIC KIDNAPPING AND CHAOS IN THE VALLEY

The illusion of azaadi and Kashmir’s historic deception

How Pak's terror policy evolved in Kashmir

Birth of social media jihadists, death of Article-370

Operation Sindoor: When Indian missiles rained on Pak terror parade

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<div class="itg-mosimage"><div class="itgimage"><amp-img  src="https://akm-img-a-in.tosshub.com/sites/media2/indiatoday/images/stories/2011October/economic-crash-1_100711030128.jpg" alt = "" height="425" width="650" class="" layout="responsive"></amp-img></div></div>The signs of an economic crash are hard to miss. From a tumultuous stock market at an all-time low to record gold prices and widespread unemployment, the economies of countries worldwide have reached a breaking point. The fear is that a long depression is only the beginning of a total economic collapse, which will not only impact the kind of bonus you'll get this year, but might also mean a substantial paycut.<br><br>The high rate of interest on housing loans, the inflation on food prices and the spiralling cost of living has left most of us with meager to almost nil savings that will be inadequate to help us sail through. The best thing to do in such a situation is to assess your assets and start planning early with this easy checklist.<br><b><br>Understanding the problem</b><br>"It is a sequential meltdown as the economy had a very small phase of recovery," says Ila Patnaik, professor, Institute of Public Finance and Policy. She adds that in 2008, the downturn was less serious as it had struck the world economy after a gap of 10 years. But this time around it's hit back with a vengance within just three years, thus compounding the impact.<br><br>"India is going to be trapped this time as our fundamentals are not strong. The fiscal and the current account deficit of the Indian economy is huge," says Vanita Tripathi, lecturer, Delhi School of Economics, while explaining the disparity between the growing demand as opposed to a stagnant supply curve. Inflation is in double-digits despite the Reserve Bank of India's revised interest policy.<br><br>Foreign institute investors are moving out of the country. Gold and silver has crashed and the rupee is losing its value. For the Indian economy, the turmoil in global markets has hit at a particularly wrong time, when the country is struggling with its own governance issues.<br><br>Back in 2008, even though the market was choppy, there was political stability. Domestic consumption was strong and production was not hit by the meltdown. This time, the intense fall in car sales and production clearly shows that the economy has been shaken right to its core.<br><br><div class="itg-mosimage"><div class="itgimage"><amp-img  src="https://akm-img-a-in.tosshub.com/sites/media2/indiatoday/images/stories/2011October/economic-crash-2_100711030128.jpg" alt = "" height="425" width="650" class="" layout="responsive"></amp-img></div></div>The steep depreciation of nearly 12 per cent in the value of the rupee against the US dollar over the last two months is set to negatively impact the profitability of the economy. "The weak rupee will make inroads for imports like oil, which in turn will become more expensive and will add to inflationary prices," explains Mukesh Jha, propreitor, Gupta and Jha Consultancy Services, Delhi.<br><br>Though global oil prices have moderated but the petrol prices are still skyrocketing.The Indian corporate sector is reeling under a severe credit crunch. As a result, its expansion and investment plans are getting stalled, leading to a slowdown of the economy.<br><br><b>Take stock</b><br>Think of the United States Marine Corps 'P Rule', or in other words, proper prior planning prevents poor performance. Sit down with your spouse and evaluate your assets. "Consider the different scenarios and plan how you could best protect your family in times of trouble. If you have a housing loan to pay off, think of ways to keep steady income coming, look at your investment portfolio and see what you can benefit the most from," advises Jha.<br><br>Clearly, if you plan to achieve long-term financial goals-from college savings for your children to your own retirement-you'll need to create a portfolio of investments that will provide sufficient returns after factoring in the rate of current inflation. Basically, one has to look at a benchmark of return on investments which is higher than the current rate of inflation. That is the only way to get positive return on investments.<br><br><div class="itg-mosimage"><div class="itgimage"><amp-img  src="https://akm-img-a-in.tosshub.com/sites/media2/indiatoday/images/stories/2011October/economic-crash-3_100711030128.jpg" alt = "" height="425" width="650" class="" layout="responsive"></amp-img></div></div><b>Get the right mix</b><br>Traditionally a good portfolio consists of two things, a low risk fixed income element, like-fixed income securities, bank or company fixed deposits, bonds and a medium to high risk speculative element which will yield capital appreciation such as equities and mutual funds. Traditionally, gold and real estate have also formed a part of personal portfolios and do represent the best hedge against inflation.<br><br>Gold can be held in the form of mining shares, coins or jewelry. But it is struggling to regain its role as the world's most respected medium of exchange against the US dollar. "Investing in gold is not a wise decision as it's not a hedge against inflation," says Anisha Mathur, wealth manager, Standard Chartered.<br><br>As the dollar strengthens against all the world's currencies, gold has maintained its value against most other depreciating currencies, except in dollar terms. Investing in gold is not a good idea in India which has depreciating currency. "Buying gold today is nothing more than a risk taken on the presumption that it may give you higher returns," says Tripathi.<br><br>Considering that the recent spike in gold is significantly driven by investor fear, rather than any solid economic indicator, makes investing in gold a riskier proposition.<br><br>Another major long term investment one can consider is real estate. The only disadvantage being the high transactional costs incurred while making these deals. "Also the initial investment itself will be very high and one cannot correctly predict the value of appreciation.," says Patnaik.<br><br>The real estate market is currently slumping and is expected to remain so in the coming year or two. "This asset is rendered even more illiquid. Only go for this if you have a long term investment goal," advises Patnaik.<br><br><div class="itg-mosimage"><div class="itgimage"><amp-img  src="https://akm-img-a-in.tosshub.com/sites/media2/indiatoday/images/stories/2011October/economic-crash-4_100711030128.jpg" alt = "" height="425" width="650" class="" layout="responsive"></amp-img></div></div><b>Think long term</b><br>Stocks are a no-no for short term investments but perfect for long term plans. Even in the case of fixed income securities, any investment which yields less than seven per cent returns should be avoided says Jha. This includes, bank fixed deposits for less than six months, where the return is between 4.5 and seven per cent.<br><br>The best option in case opting for long term investments of the fixed income yielding nature is the PPF which gives a tax rebate of 11 per cent or the government's relief bonds which give 9 per cent tax rebate. Good company deposits also give about 15 per cent rebate for deposits over a period of one year, but then carry a higher risk as compared to bank fixed deposits.<br><br>"Bonds issued by financial institutions like ICICI and IDBI offer three to five year options between -10.5 per cent to 11.5 per cent tax concessions," says Jha. The post-tax return on these bonds is better than company or fixed deposits as the tax benefit is available to the investor. While past performance is no guarantee of future results, stocks have historically proved to give higher returns than other investment opportunities that banks provide.<br><br>There are many ways to include stocks in your longterm plan in accordance to the proportion you decide is appropriate for your financial needs. You could create a diversified portfolio of shares from companies you select. Another option is a stock mutual fund, which offers the benefit of professional management of your money by financial advisors. But make sure these advisors are reliable as it is your hard-earned money which is at stake.<br><br><b>Go old school</b><br>The best bet for new investors and anyone who wants to play it safe are traditional methods of investment such as Systematic Investment Plan (SIP), a mode of investment where, the investor, invests a pre-determined amount on a monthly basis, on a pre-determined date, into a particular mutual fund scheme or a fixed deposit(FD) where you can feel financially secure without having to worry about the market crashing.<br><br>Whether in a slwodown or retreat, an economy in decline brings investors new challenges and opportunities. Use this time to invest right as market prices are low when the economy slows, many companies fall short of the earnings growth that the stock exchange expects. The institutional investors and hedge funds that moves stock prices tend to have a short term focus, and they are unforgiving of companies that miss the mark.<br><br>Always remember that in a downturn, losses are more likely to hit smaller firms that are having diffulties finding the financing and customers needed for growth. This is the very basic you need to know before you take the plunge. So spread out your funds as a well-diversified investment portfolio always withstands a storm. Don't shy away from letting your money multiply.<br><br><table><tbody><tr><td><div align="center"><b> Why to invest in a SIP</b><br></div><ul><li>It is safe for you to invest through a SIP as it is transparent and well regulated.</li><li>A SIP allows us to invest small amounts like Rs 500, ideal for a small investor.</li><li>Investing through mutual SIP allows us to enjoy the benefits of diversification.</li><li>If you miss one SIP installment due to lack of funds, no one will come after you.</li><li>Investing in SIPs does not require any special fees per month or annually.</li></ul><b></b><div align="center"><b>Tips to survive the Slump</b><br></div><ul><li>Minimise your family's spending habits and learn to do without a lot of the consumerist extras.</li><li>Credit cards are expensive. Cut those credit cards now and pay in cash for purchases.</li><li>Pay off that car loan, as auto loans are ridiculously expensive and gas prices aren't reducing down any time soon.</li><li>Buy some gold and silver (both physical and through exchange traded funds), since inflation is killing the value of our savings everyday.</li><li>Secure your money, although keeping cash at home will give you a feeling of control, it will definitely not help.</li></ul></td></tr></tbody></table><br><div id="tab-link-wrapper-plugin"><div class="authors__container"><div class="authors__by"><div class="authlable">Published By: </div><div class="authdetaisl">AtMigration </div></div><div class="published__on"><div class="authlable">Published On: </div><div class="authdetaisl">Oct 7, 2011 00:00 IST</div></div></div><div class="sendros">--- ENDS ---</div></div>

supplements

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<div class="itg-mosimage"><div class="itgimage"><img  title=""  class="" alt="" src="https://akm-img-a-in.tosshub.com/sites/media2/indiatoday/images/stories/2011October/economic-crash-1_100711030128.jpg" loading="lazy" /></div></div>The signs of an economic crash are hard to miss. From a tumultuous stock market at an all-time low to record gold prices and widespread unemployment, the economies of countries worldwide have reached a breaking point. The fear is that a long depression is only the beginning of a total economic collapse, which will not only impact the kind of bonus you'll get this year, but might also mean a substantial paycut.<br><br>The high rate of interest on housing loans, the inflation on food prices and the spiralling cost of living has left most of us with meager to almost nil savings that will be inadequate to help us sail through. The best thing to do in such a situation is to assess your assets and start planning early with this easy checklist.<br><b><br>Understanding the problem</b><br>"It is a sequential meltdown as the economy had a very small phase of recovery," says Ila Patnaik, professor, Institute of Public Finance and Policy. She adds that in 2008, the downturn was less serious as it had struck the world economy after a gap of 10 years. But this time around it's hit back with a vengance within just three years, thus compounding the impact.<br><br>"India is going to be trapped this time as our fundamentals are not strong. The fiscal and the current account deficit of the Indian economy is huge," says Vanita Tripathi, lecturer, Delhi School of Economics, while explaining the disparity between the growing demand as opposed to a stagnant supply curve. Inflation is in double-digits despite the Reserve Bank of India's revised interest policy.<br><br>Foreign institute investors are moving out of the country. Gold and silver has crashed and the rupee is losing its value. For the Indian economy, the turmoil in global markets has hit at a particularly wrong time, when the country is struggling with its own governance issues.<br><br>Back in 2008, even though the market was choppy, there was political stability. Domestic consumption was strong and production was not hit by the meltdown. This time, the intense fall in car sales and production clearly shows that the economy has been shaken right to its core.<br><br><div class="itg-mosimage"><div class="itgimage"><img  title=""  class="" alt="" src="https://akm-img-a-in.tosshub.com/sites/media2/indiatoday/images/stories/2011October/economic-crash-2_100711030128.jpg" loading="lazy" /></div></div>The steep depreciation of nearly 12 per cent in the value of the rupee against the US dollar over the last two months is set to negatively impact the profitability of the economy. "The weak rupee will make inroads for imports like oil, which in turn will become more expensive and will add to inflationary prices," explains Mukesh Jha, propreitor, Gupta and Jha Consultancy Services, Delhi.<br><br>Though global oil prices have moderated but the petrol prices are still skyrocketing.The Indian corporate sector is reeling under a severe credit crunch. As a result, its expansion and investment plans are getting stalled, leading to a slowdown of the economy.<br><br><b>Take stock</b><br>Think of the United States Marine Corps 'P Rule', or in other words, proper prior planning prevents poor performance. Sit down with your spouse and evaluate your assets. "Consider the different scenarios and plan how you could best protect your family in times of trouble. If you have a housing loan to pay off, think of ways to keep steady income coming, look at your investment portfolio and see what you can benefit the most from," advises Jha.<br><br>Clearly, if you plan to achieve long-term financial goals-from college savings for your children to your own retirement-you'll need to create a portfolio of investments that will provide sufficient returns after factoring in the rate of current inflation. Basically, one has to look at a benchmark of return on investments which is higher than the current rate of inflation. That is the only way to get positive return on investments.<br><br><div class="itg-mosimage"><div class="itgimage"><img  title=""  class="" alt="" src="https://akm-img-a-in.tosshub.com/sites/media2/indiatoday/images/stories/2011October/economic-crash-3_100711030128.jpg" loading="lazy" /></div></div><b>Get the right mix</b><br>Traditionally a good portfolio consists of two things, a low risk fixed income element, like-fixed income securities, bank or company fixed deposits, bonds and a medium to high risk speculative element which will yield capital appreciation such as equities and mutual funds. Traditionally, gold and real estate have also formed a part of personal portfolios and do represent the best hedge against inflation.<br><br>Gold can be held in the form of mining shares, coins or jewelry. But it is struggling to regain its role as the world's most respected medium of exchange against the US dollar. "Investing in gold is not a wise decision as it's not a hedge against inflation," says Anisha Mathur, wealth manager, Standard Chartered.<br><br>As the dollar strengthens against all the world's currencies, gold has maintained its value against most other depreciating currencies, except in dollar terms. Investing in gold is not a good idea in India which has depreciating currency. "Buying gold today is nothing more than a risk taken on the presumption that it may give you higher returns," says Tripathi.<br><br>Considering that the recent spike in gold is significantly driven by investor fear, rather than any solid economic indicator, makes investing in gold a riskier proposition.<br><br>Another major long term investment one can consider is real estate. The only disadvantage being the high transactional costs incurred while making these deals. "Also the initial investment itself will be very high and one cannot correctly predict the value of appreciation.," says Patnaik.<br><br>The real estate market is currently slumping and is expected to remain so in the coming year or two. "This asset is rendered even more illiquid. Only go for this if you have a long term investment goal," advises Patnaik.<br><br><div class="itg-mosimage"><div class="itgimage"><img  title=""  class="" alt="" src="https://akm-img-a-in.tosshub.com/sites/media2/indiatoday/images/stories/2011October/economic-crash-4_100711030128.jpg" loading="lazy" /></div></div><b>Think long term</b><br>Stocks are a no-no for short term investments but perfect for long term plans. Even in the case of fixed income securities, any investment which yields less than seven per cent returns should be avoided says Jha. This includes, bank fixed deposits for less than six months, where the return is between 4.5 and seven per cent.<br><br>The best option in case opting for long term investments of the fixed income yielding nature is the PPF which gives a tax rebate of 11 per cent or the government's relief bonds which give 9 per cent tax rebate. Good company deposits also give about 15 per cent rebate for deposits over a period of one year, but then carry a higher risk as compared to bank fixed deposits.<br><br>"Bonds issued by financial institutions like ICICI and IDBI offer three to five year options between -10.5 per cent to 11.5 per cent tax concessions," says Jha. The post-tax return on these bonds is better than company or fixed deposits as the tax benefit is available to the investor. While past performance is no guarantee of future results, stocks have historically proved to give higher returns than other investment opportunities that banks provide.<br><br>There are many ways to include stocks in your longterm plan in accordance to the proportion you decide is appropriate for your financial needs. You could create a diversified portfolio of shares from companies you select. Another option is a stock mutual fund, which offers the benefit of professional management of your money by financial advisors. But make sure these advisors are reliable as it is your hard-earned money which is at stake.<br><br><b>Go old school</b><br>The best bet for new investors and anyone who wants to play it safe are traditional methods of investment such as Systematic Investment Plan (SIP), a mode of investment where, the investor, invests a pre-determined amount on a monthly basis, on a pre-determined date, into a particular mutual fund scheme or a fixed deposit(FD) where you can feel financially secure without having to worry about the market crashing.<br><br>Whether in a slwodown or retreat, an economy in decline brings investors new challenges and opportunities. Use this time to invest right as market prices are low when the economy slows, many companies fall short of the earnings growth that the stock exchange expects. The institutional investors and hedge funds that moves stock prices tend to have a short term focus, and they are unforgiving of companies that miss the mark.<br><br>Always remember that in a downturn, losses are more likely to hit smaller firms that are having diffulties finding the financing and customers needed for growth. This is the very basic you need to know before you take the plunge. So spread out your funds as a well-diversified investment portfolio always withstands a storm. Don't shy away from letting your money multiply.<br><br><table style="background-color: rgb(229, 229, 229);" align="center" border="1" cellpadding="5" cellspacing="5" width="650"><tbody><tr><td><div align="center"><b> Why to invest in a SIP</b><br></div><ul><li>It is safe for you to invest through a SIP as it is transparent and well regulated.</li><li>A SIP allows us to invest small amounts like Rs 500, ideal for a small investor.</li><li>Investing through mutual SIP allows us to enjoy the benefits of diversification.</li><li>If you miss one SIP installment due to lack of funds, no one will come after you.</li><li>Investing in SIPs does not require any special fees per month or annually.</li></ul><b></b><div align="center"><b>Tips to survive the Slump</b><br></div><ul><li>Minimise your family's spending habits and learn to do without a lot of the consumerist extras.</li><li>Credit cards are expensive. Cut those credit cards now and pay in cash for purchases.</li><li>Pay off that car loan, as auto loans are ridiculously expensive and gas prices aren't reducing down any time soon.</li><li>Buy some gold and silver (both physical and through exchange traded funds), since inflation is killing the value of our savings everyday.</li><li>Secure your money, although keeping cash at home will give you a feeling of control, it will definitely not help.</li></ul></td></tr></tbody></table><br><div id="tab-link-wrapper-plugin"><div class="authors__container"><div class="authors__by"><div class="authlable">Published By: </div><div class="authdetaisl">AtMigration </div></div><div class="published__on"><div class="authlable">Published On: </div><div class="authdetaisl">Oct 7, 2011 00:00 IST</div></div></div><div class="sendros">--- ENDS ---</div></div>

Expert advice on everything you need to know about the economic slowdown and the right places to invest to ensure that you come out unscathed.

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Expert advice on everything you need to know about the economic slowdown

Expert advice on everything you need to know about the economic slowdown and the right places to invest to ensure that you come out unscathed.

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