Fortune Watch

There are a variety of reasons, both fundamental and technical, to believe that a market crash is almost upon us. This crash will affect virtually all world markets, including and especially the big Western Markets, which have thus far escaped the devastation already afflicting the developing markets.

The precipitation for the current fall in equity markets across the globe has been China’s devaluation of the Yuan which has made the market much more nervous about deflation and competitive devaluation of currencies by countries across the board.

Current market situation is a symptom of problems that have been building since January. Nothing really has changed structurally since the 2008 crisis.

The weeks ahead will give many opportunities, but right now to look for them and put money doesn’t make sense.

The slide in US stock markets is way away from temporary. As of Friday last week, S&P 500 was almost at the same level as was in 1999. This is by no means is a temporary correction for US markets.

I am not just focusing on the US markets, but they will all get taken down – European markets including the UK, and Far Eastern markets such as Hong Kong, Japan and India as well. The Sensex ended over 1,600 points down today, the biggest in over seven years.

The basic and fundamental reasons for a market crash now are big and obvious – the ravages of deflation and depression brought about by extremes of debt which must cut into corporate profits – in Japan the debt situation is now hopeless, the Sovereign debt crisis set to crush Europe and probably destroy the euro, the collapse and implosion of the monstrous debt fuelled bubble in China which is already underway, an accelerating currency crisis in the Far-East exacerbated by the recent Chinese devaluation of the Yuan, and the collapse also already underway in Emerging Markets.

Panic is stalking global markets today, fuelled by fears of a worse-than-expected slowdown in China, which is bound to have a ripple effect in an increasingly interconnected world economy.

Ace investor Warren Buffett once famously said: “Be fearful when others are greedy, and be greedy when others are fearful.” Any takers?

The Stock Markets are clearly gripped by fear, and it looks like it will grow in the days ahead.

So, should investors become greedy at this point in time and look at buying quality stocks now or on further declines? To be honest I personally believe we are entering a risk off period, it will be a good idea to wait for a risk on period.

Things have gone beyond being called a phase of correction. It is not a good situation for markets. There is reasonable pain ahead of us, it is clear that a crash of perhaps unprecedented proportions in on the cards.

The tone and tenor of the stock market changes from time to time – and now may be a good time to stay out until the current choppy climate changes.

It’s a dangerous time for investors when any and every investment makes money. I do realize that I must be sounding like a lunatic when I say that. How can things be dangerous when money is flowing into investors’ account statements as if it grew on trees? And for mutual fund investors, it does appear to be growing on trees. Of course investors in the best funds made an absolutely humongous amount of money.

Something similar has been happening for stock investors as well. Even though there were some stocks that lost money, an overwhelming number of them went up by huge margins. There isn’t really any stock or mutual fund investor out there who didn’t make a great deal of money. Therefore, what we have here is like an examination which everyone clears because the passing marks have been reduced to zero.

These are abnormal times which are very dangerous precisely because it’s impossible to make mistakes. You can invest in bad companies and bad funds and still make money. And that means that when the going gets even slightly tougher, a lot of people will find that they actually did invest in bad companies and in bad funds.

It’s an old saying that more investment mistakes are made in good times than in bad times and since the times are so good right now, the potential for making mistakes is that much higher. Investment markets change direction very quickly. Nothing prevents what look like good investments today from turning out to be bad ones.

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Beginners who are not aware of current trade investments and who don’t have enough capital to invest may face a lot of setbacks. These factors, however, should not discourage an individual from investing. If you are too scared to take the risk, you lose a lot of opportunities.

Investing gives you the leeway to increase your income. If you just simply put your money in a savings account, a 2-5% interest will not do to secure your future. Since in this set-up you can easily pull out your savings account, it increases the likelihood of you spending the money in unnecessary expenditures. In a short span, your money is gone and that leaves you with nothing.

Lay down the cards. For beginners, the first thing to do when you plan to invest your money is to have a reality check. To start off, do you have a capital to invest on? It is not just capital but do you have a risk-capital?

Add up your assets and check which of these you are willing to bet and let go. This may be hard at first especially if all of which are valuable to you. But if you carefully choose which assets are of lesser value to you, this will make it easier for you to accept loss if your first investment fails. Since investing is also an expense, consider it a loss anyway but with a potential to grow.

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A man walked into a bank in New York City one day and asked for the loan officer.

He told the loan officer that he was going to Philippines on business for two weeks and needed to borrow $5,000. The bank officer told him that the bank would need some form of security for the loan.

Then the man handed over the keys to a new Ferrari parked on the street in front of the bank. He produced the title and everything checked out The loan officer agreed to accept the car as collateral for the loan.The bank’s president and its officers all enjoyed a good laugh at the guy for using a $250,000 Ferrari as collateral against a $5,000 loan.

An employee of the bank then drove the Ferrari into the bank’s underground garage and parked it there.Two weeks later, the guy returned, repaid the $5,000 and the interest, which came to $15.41.

The loan officer said, “Sir, we are very happy to have had and this transaction has worked out very nicely, but we are a little puzzled. While you were away, we checked you out and found that you are a multi millionaire. What puzzles us is, why would you bother to borrow “$5,000”.

The millionaire replied: “Where else in New York City can I park my car for $15.41 and expect it to be there when I return”

Well thats how the rich stay rich, they know a lot more about Money Management. All the millionaires I have met in my life were penny wise. Look after your cents and the Dollars will look after themselves.

A large percentage of people will admit to not having any type of savings account. Maybe there’s just not enough at month’s end to give to a “rainy day” fund. Perhaps the money in put into a savings account gets used just as fast as it gets saved. Either way, taking out an emergency credit card can help to avoid depleting your savings account while providing security. Knowing there is a way to deal with a financial emergency can give you peace of mind. While having cash for unforseen expenses is always the best line of defense, it seems that so many times as soon as we manage to put something aside, something else comes up and we need that money.

Having a credit card for the sake of an emergency is a great way to insure you won’t be left on the side of the road with a car breakdown or pulling your own tooth because you can’t afford to see a dentist (let’s hope you wouldn’t do that!). While there has been a credit card debt epidemic over the past several years, if you are responsible and can practice some self-control, you can have peace of mind should you need to come up with some quick cash.

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In today’s terms the main cause of the increase in inflation is the rising prices; the prices go on increasing day by day and are generally cause by the storage of the of the essential commodities by the so called black marketers and wholesalers who go hand in glove with the politicians.

The second cause that increases inflation is unemployment,  today the youth of the country after so much of turmoil and hard work stand no where. If unemployment cannot be controlled at this stage then what will happen to the whole country, the youth of today is the future of tomorrow.

Thirdly the main cause which can increase inflation is corruption, it is well said that “Justice delayed is justice denied”, corruption is eating up the the economy as said corruption begets corruption and should be stopped at all levels.

“When you see that in order to produce, you need to obtain permission from men who produce nothing — when you see money flowing to those who deal, not in goods, but in favours — when you see that men get richer by graft and pull than by work, and your laws don’t protect you against them, but protect them against you, then you may know that your society is doomed..”

Ayn Rand

News Zealand, Denmark, Singapore and Sweden are among the least corrupt nations and among the most corrupt are Somalia, Afghanistan and Sudan.

If all these factors are taken into consideration the economy and rising inflation of any  country can be controlled. When price rise is controlled then the inflation gets controlled automatically.

Still other experts believe that it is normal for the economy to be effected by inflation. This theory is shown by the Phillips curve which allows inflation to cycle up and down according to the shift between unemployment and inflation. Another theory of inflation uses the gross domestic product to measure the effects of inflation on the economy. This theory uses what is called potential output. This means that the state of the economy is measured against what is determined to be the best level of production for the nation. If the gross domestic product is higher than it should be and if unemployment is lower than it should be the result is that the rate of inflation will increase because suppliers will raise their prices and built in inflation will get worse.

About the author :- Dr Bhandari a Doctor by profession is an active thinker, having thought provoking views on today’s global society and culture in general and about Indian issues in particular, some of his views often contradict established views of modern society which he thinks is more busy in finding new problems then trying to solve existing problems.

Financial planning is the process of identifying the monetary goals of an individual after considering different factors like his risk profile, life priorities, current lifestyle, etc… It is a process that can present before an individual, an organization or even a nation details about their current monetary position and the adjustments that are to be done to their pattern of spending in such a way that they can effectively meet their financial objectives.

Today, I have some advice for those of you heading into retirement or already into retirement and have realized that, for whatever reason, whether it was an unforeseen or medical expense or just a lack of excess income after all the expenses of taking care of your family or whether you just didn’t pay attention to saving until it was too late.

My theme for you continues to be “Yes, you can retire and live twice the life at half the cost”. You just have to be smart about it”.

Now here’s my advice… if, after adding up all you’ve saved for retirement, you find that your income won’t be enough to support you, start to actively look for ways to trim your expenses. This way you can keep more of the income you are set to receive, enabling you to live the life you’ve always dreamed of but could not afford.

Today, I want to share some of my favorite suggestions and add a few I picked up from an article titled 7 Realistic Strategies for Retirement by Tom Sightings, for U.S. News & World Report.

First, remember there are only two ways to get to your destination. Using a boating metaphor, you either raise the bridge or lower the water. Raising the bridge means earning more income. Lowering the water means cutting your expenses. Only you know which choice is the most feasible for you but today I am going to talk about ideas which “lower the water”.

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And I think it — about money. A lot of financial advice — — on our here’s our taste and some common financed and it’s. Never take a mortgage and corporate giant. This made perfect sense — — interest — super high rates today even with recent hikes are still at historic lows. So that means it makes a lot more sense to keep that market’s going to pay — — slowly. But invest any extra money in your retirement account — stashed away in an emergency. You can see — health care. And then borrow against — or. This is often cat bites. While most people don’t wanna take the organ paying fees. Borrowing money against your — and came makes sense now particularly because interest rates alone the going rate. Four point 2%. A lot better that you’re gonna get from the credit car or even a private — The only. Less money you should have stuck — my. That you’ll meet him in the last — but with the average retiree somebody in the — — twenty to thirty years longer. You need more money invest in stocks from the nineteenth. 2000 well. Average return for a large — acts with 10% a year it makes perfect sense to invest in stocks for the long ball. This advice that a live forever. Like discs — — when it comes to financial ties him for exploration.