Expert Zone

Straight from the Specialists

Is gold a good investment once again?

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(Any opinions expressed here are those of the author and not of Thomson Reuters)

The increase in gold prices in the last two months has rekindled interest in the yellow metal as a vehicle for investment. It was after the 2008 global financial crisis that gold became the most preferred asset, with prices doubling in four years.

Why was gold preferred? It was not so much as a hedge against inflation but as an insurance against uncertainty. When the economy is faltering and the future looks bleak, gold becomes a preferred asset.

After the 2008 crisis, there was hardly any asset that could conserve the value of investment. Property prices were down, stock markets had crashed, and interest rates were down to near zero. Gold came to the rescue as an earning asset.

Gold prices in India shot up from 13,662 rupees ($221) for 10 grams at the beginning of 2009 to nearly 31,000 rupees ($502) at the beginning of 2013. Thereafter, prices started to decline. In just one year, gold prices dropped 8 percent. That appeared to be the end of the metal as a safe investment.

Time for a relook at FDI in insurance intermediaries

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(Any opinions expressed here are those of the author and not of Thomson Reuters)

Insurance companies in India have an FDI limit of 26 percent, which may be revised upwards in the coming months. The industry requires funds to grow and the revision can be an enabler, but the process may take some time as it requires legislative approval and there seems to be some opposition to the move.

Since the industry is still in its nascent stage, the insurance regulator also places the same FDI cap on insurance intermediaries such as brokers and web aggregators, severely limiting their ability to raise funds to grow their business.

Time for real reforms, but low-hanging fruits remain

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

What seemed to be a lost cause merely three months ago has staged a remarkable comeback: the Indian government’s zeal for reform. After many months of dithering, the ruling Congress party remembered that it had the spine to stand up to fierce opposition from various state governments, finally getting its way on certain measures.

Great potential in India long-term growth story

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(Rajan Ghotgalkar is Managing Director of Principal Pnb Asset Management Company. The views expressed in this column are his own and do not represent those of either Principal Pnb or Reuters)

Reforms seem to be the flavour of the season after we relished and put aside the corruption issue.

Lack of retirement planning options

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

Unlike people in developed nations such as the U.S. and Europe, people in India are known for their conservative habit of saving. The need for regular income after retirement is a concern that haunts most Indians.

2012 – Boom or Doom?

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

What a year 2011 has been. Except certain commodities such as gold and oil, every other asset class has been hit. With Sensex down more than 20 pct YTD, 10 year g-sec yields up by almost 1 pct and rupee down by almost 14 pct against the dollar, it has been a poor year for investors. This was caused by a bout of strong global risk aversion led by the European sovereign debt crisis, high inflation in emerging markets and consequent monetary tightening, and lack of proper policy action in India. The only salvation came from commodities such as oil (up almost 26 pct in rupee terms) and gold (up almost 38 pct in rupee terms).

Indian stocks: Paradise for value investors

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

The BSE Sensex romance with the 16,000 level seems to have been rekindled, with the Sensex closing below it on August 26, after a gap of more than 18 months during which it touched a high of 21,109 (missing the all-time high of 21,207 by a whisker).

Where is the Indian stock market heading?

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

The BSE Sensex has left us guessing about where it is headed. It’s not an easy task considering it had touched 20,509 in Jan 2010 and peaked at 21,207 in Jan 2008.

Watch out for early signs of peaking inflation and slowing growth

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

Indian equities, after recovering smartly during much of 2009 and 2010, have again started exhibiting high volatility over the last six months. At a global level, this time it is emerging markets which are leading the downside in equities. Even among emerging markets, Indian stocks have looked weaker.

Five things to do before you turn 30 — financially

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(The views expressed in this column are the author’s own and do not represent those of Reuters)

1) Start investing in Mutual Funds
There is a reason why I mention this as the first point in the article. Mutual funds are by far the best starting tool for any investor. And this holds true for any type of investor — extremely aggressive ones and those who do not know much about investments.

The tough part of managing the portfolio is best left to the experienced funds managers who have adequate resources and the knowledge to best maintain the returns on their funds portfolio and manage the associate risks. They are far better informed than an individual can expect to be in most cases.

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