Make the Most of this Valentine’s Day – :)

Well it’s a financial blog. Why valentine day love post??  You can’t ignore love, have been trying to mix the economic functions that can be heart-512x512 blogcalibrated with love.  I will not go on the personal finance or behavioral finance  side but the lure for the occasion provides some liners:-

·         You’re my long-run target; my nominal anchor.

·         I’m going to extraordinary measures to increase your stimulus.

·         I long for you as the economy longs for its long-run maximum potential

·         Her deviations are never standard, her probabilities never mean.  Continue reading “Make the Most of this Valentine’s Day – :)”

Renting house v/s buying house

Before you proceed, there are some questions one should ask taking up any task in life.blog

If somebody asks me: “Should I buy a house?”

And my answer is always the same: “I have no idea.”

It is not for lack of familiarity with price-to-rent ratios or the benefits of the mortgage interest deduction. No matter how carefully and clearheadedly you approach the exercise, is more a starting point than a conclusion about your optimal living situation. It will give you a good look at the financial dimensions of your decision. But housing is about quite a bit more.

These are the 5 questions that one should answer before taking a call:

  • How much is permanence worth to you?

One of the nonfinancial benefits of buying a home is that you know you can live in it indefinitely. You don’t have to worry that the landlord will raise your rent 20 percent, or demolish the building to turn it into something else. You can renovate the kitchen or paint the shutters according to your preference and yours alone. (O.K., maybe a historic preservation board or homeowners association may have some say, but you are pretty much on your own).

So what is that worth to you? It is purely a question of your preferences and priorities in life. Continue reading “Renting house v/s buying house”

You should know your Time Horizon before investment

If you are a keen follower of financial journalism and had been following the media, you must have heard the headlines stating For blogthree days there was ‘profit booking’ in our markets. Today, ‘value buying’ emerged. I love these journos.

Next what the predictions for May 16-17th Sensex 24,000. What to say? Well just one line that market forecasters exists to make the astrologers look good. So Greed is good 😉

Now the worst scenario could be Hung parliament. 3rd Front. Consensus candidate Pranab Mukherjee. OR Ra Ga as PM. Sensex 19k in June 2014 Sensex 13k.

Knowing your time horizon before you make any investment is extremely important. This should allow you to keep market moves in perspective so you can align your risk tolerance with your actual portfolio needs.  Continue reading “You should know your Time Horizon before investment”

Time Value of Money :-

We all intuitively feel that receiving Rs 100 today is better than receiving Rs 100 after sometime. The principles ofpresent value explain how much better it is to receive that 100 today than receiving after a year by enabling us to calculate the value of Rs 100 receivable (say) after one in today’s rupees. Present value is a concept that is intuitively appealing, simple to compute, and has a wide range of applications. It is useful in decision-making ranging from simple personal decisions – buying a house, saving for a child’s education and estimating income in retirement, to more complex corporate financial decisions – Continue reading “Time Value of Money :-“