News Despatch - DATACOMP WEB TECHNOLOGIES LTD.

LIC is all set to launch its new policy ‘Bima Bachat’ on the 14th November 2005. This policy is similar to Bima Gold wherein the survival benefit is payable every 3 years. The only difference is that it is a ‘single premium money back type plan policy.’ The single premium that is paid under this policy will be paid back to the policyholder along with loyalty additions, if any. This payment will be done at the time of maturity. If the policyholder survives till the term of the policy, he will receive 15% of the total sum assured every 3 years. There are no riders available under this policy.

How to time your investment
How beneficial is it to invest in stocks
How to survive in a volatile market

Firstly, you should ensure that there are no penny stocks in your portfolio. Undoubtedly, penny stocks promises a high return of 20-40% within a short span. But it also involves risks and you may have to face it when you least expect it. In a situation where the market is low, it is advisable to avoid penny stocks and it should be discarded.
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How to time your investment:

It is quite difficult though not impossible to time the market and take investment decisions. For this, you may have to depend on your investment consultants or even you can take the decisions on your own. High returns is the reason why people indulge in high risks because fixed deposits in banks would not earn them this return. It is a safe option for some who do not want to invest in stock market.

Investing in stocks is no less than a game where you don’t know what will happen next. There is no place to assume or expect a performance of a stock.
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How beneficial is it to invest in stocks?

Investment in stocks can be viewed as wealth building vehicle. When you buy a stock you become a partial owner of the company. Now when you invest in the selected company you are rewarded with high returns depending on the performance of the stock. On an average the stocks grow at 10% a year and when the investment is wisely done into different stocks, you wouldn’t be depressed at the end of the term. Moreover you are helping the economy of the country to grow when you purchase the shares of a particular company when it comes up with Initial Public Offering.

A serious study of stocks and investment will help you go long way.

How to survive in a volatile market:
Earning Season is always volatile to stock prices. Just before Diwali the Sensex fell to a level of 7800 from 8800. And now again the present level of Sensex is 8075.

There are ways to reduce the volatility of your portfolio. One way is to invest in the company with a modest expectation. There might be different description of P/E to different individuals but lets take it as 10. When a share price gets punched, the company with modest expectation doesn’t get much affected because the P/E of 10 already incorporates a 0% EPS growth. Even if EPS stays constant for the next ten years, company with P/E of 10 will return its shareholder roughly 10% a year.

What is a Monthly Reducing balance
A monthly reducing is where your housing finance company deducts the EMI you have paid for a given period from the principal amount and charges interest on the balance amount from the next month. Lets say you have taken a loan for Rs 1 lakh at an interest rate of 12 percent. The EMI works out to Rs 1000 and you pay it on 5th of that month. If your finance company follows a monthly reducing balance your reduced balance will take effect from the next month meaning that for the remaining days of the previous month you continue to pay interest at that rate. The EMI for the monthly reducing system is effectively lesser than the Yearly reducing system of calculating the Interest.

What is a Yearly Reducing balance?
In a Yearly reducing balance the principal is reduced at the end of the year, thus you continue to pay interest on a certain portion of the principle which you have actually paid back to the lender.