Investments

Stock Market

Stock market is again showing declining trend after 2 months of relative stability.  Global situation especially in USA is turning from bad to worse. Risk aversion is on increase again as FIIs are selling on net basis continuously for last 10 days. Domestic insurance companies get lot of funds during these ‘tax saving’ months (Feb/March) and they are net buyers for last many days but it is not enough to arrest the fall in stock prices.

General elections will be held in April/May and the next trigger will be the new government formation. Until then stock market direction will depend on US market which is expected to be subdued.

 

Real Estate

Real estate market is expected to correct slowly over next few years and is certainly not suited for short term speculators and persons with high debt levels. Real estate is a highly illiquid market and correction in prices will be a very slow process unlike share market where prices gets adjusted to the reality very quickly.

 

Dollar

The Indian rupee is at a record low of almost Rs 51.90 per dollar on the back of dollar buying by oil companies & FII selling in stock market. Many experts are now predicting further fall in coming days as FII selling is continuing unabated. UAE Dirham also touched important Rs 14 mark. NRIs who were waiting for better dollar rates can start sending money.

Insurance/Mutual Fund

March is the time when investors normally buy tax saving mutual fund and life insurance schemes. Here investors can opt for SBI Mutual Fund’s SBI Taxgain scheme as tax saving cum investment option. This scheme has a decent track record and is good even for those persons who need not save any tax.

 

Bank Deposits

SBI has increase NRI Deposit rates while NRO deposit rates will be reduced from 9th of this month by almost half percentage. NRIs are again advised to opt for fixed deposits as quickly as possible as interest rates are expected to go down from here.