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Kuwait India extends

Kuwait India extends A Hearty Welcome to Engineers/Members of the I.E.I (Kuwait Chapter) Monday, May 10, 2010. Personal Financial Planning & Investment Strategy.

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Kuwait India extends

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  1. Kuwait India extends A Hearty Welcome to Engineers/Members of the I.E.I (Kuwait Chapter) Monday, May 10, 2010

  2. Personal Financial Planning & Investment Strategy …. a presentation by R.Kuppanna , General Manager, Kuwait India International Exchange Co. May 10, 2010

  3. Save, Invest & Grow Wealth • How does one save, protect savings, plan finances, invest, build wealth? • Principles & Framework • Process : long term, systematic, patient, disciplined A public opinion poll is no substitute for thought - - Warren Buffett

  4. Risk – Return Graph

  5. The Power of Compounding • A sum of Rs. 100 invested would add up to: Compounding, says Einstein, is “the eighth wonder of the world”

  6. Investing Framework--Equities • Intelligence vs. Independence • Top Down vs. Bottom-Up Approach • Preparation: >generate alternatives > eliminate alternatives > construct portfolio • Margin of Safety • Investor or Speculator? ==================================================== Warren Buffet’s Rules :1. Do not lose money 2. Do not forget rule # 1

  7. Qualitative Aspects • Manage Greed & Fear • Avoid emotional attachment • Avoid actions based on hearsay/rumours/sentiments • Avoid over-leveraging • Don’t try to time the market • An investment in knowledge always pays the best interest ……… Benjamin Franklin

  8. Mutual Funds Suitable for those who: --don’t have wherewithal for research --have limited resources --have little time and --still would like to benefit from equities

  9. Mutual Funds • Not an alternative investment option to stocks/bonds • Pools monies of several investors and invests in stocks/bonds/other securities • Owner of a mutual fund gets a proportional share of fund’s gains/losses/income/expenses • Derives the benefits of professional management, diversification, liquidity, affordability, convenience, flexibility, variety

  10. Mutual Funds

  11. Mutual Funds • Types of Funds: > Open-Ended (can enter/exit fund) > Close-Ended (exit after scheme period) > Interval-Fund (entry/exit at periodical intervals (quarterly/half-yearly etc.)

  12. Exchange Traded Funds (ETFs) • What? –Investment Schemes whose units are listed on stock exchanges: after listing, traded like equity stocks • ETFs have some underlying security or group of securities (like an index), commodities (like gold or oil) • Underlying securities determine the value of ETFs

  13. Gold ETFs • Has gold as the underlying security • Advantages: owning gold without the hassles of physically holding them—avoiding expenses, bank vault charges, insurance etc. • No concerns of quality—gold backing from LMBA and stored in vaults; fund house takes care of all risks of storage and safety; minimal expense ratio • Buying/Selling : Very Easy

  14. Typical Portfolios • Depending upon one’s ability to take risk, portfolio compositions will vary. Table below captures these aspects. Illustrative only.

  15. Caveats • All investments carry risk • Be clear about objectives of investing • Take informed decisions • No substitute for learning • Long-term orientation (systematic,disciplined) • Invest only savings that can be put away for a longer period • Consult, seek advice….but act according to own judgment

  16. The Broken Window • The art of economics consists in looking not merely at the immediate but at the long effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups – Henry Hazlitt

  17. The Trader Principle There is no conflict of interests among men who do not desire the undeserved, who do not make sacrifices nor accept them, who deal with one another as traders, giving value for value. The principle of trade is the only rational ethical principle for all human relationships, personal and social, private and public, spiritual and material. It is the principle of justice.-- Ayn Rand

  18. Conclusion • On a lighter note: • OCTOBER: This is one of the peculiarly dangerous months to speculate in stocks . The other months are July, January, September, April, November, May, March, June, December, August, and February. - Pudd'nhead Wilson's Calendar • There are two times in a man's life when he should not speculate: when he can't afford it and when he can. - Following the Equator, Pudd'nhead Wilson's New Calendar (Both quotes from Mark Twain)

  19. THANK YOU

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