NEW NORMAL

We have already talked about volatility earlier. But that was for the share market. As more the volatility more the wealth creation & accumulation. But in the current situation volatility has changed its nature, it is now affecting the whole spectrum of financial products and normal life. Whatever where we thought is stable is not stable now. Things are & will change drastically. If we take care of equity its nature is volatile. But the debt was considered stable in comparison to equity.  But pandemic proved that all companies have cash reserves of  2-3 months means they will find it difficult to sustain more than- that without cash flow. Here balance sheet is not conservative but largely leveraged [over / stretched]. Redemption in debt Mutual Fund showed this issue. Downgrades & other restrictions are the final results. Now, some issue is coming with NCD or debenture. Here again, a downgrade or delayed payment is seen in the recent past a...

When govt. declared 20L package it signaled a lot of reforms with it. Now India needs reforms that should be definitive for implementation. In labor laws, central & state govt. have their own laws & their complicated compliance. Now three states have changed laws, few of them need the President nod. Instead of this  "ONE INDIA, ONE LABOR LAW" is needed. So compliance will be easy. Labor laws for white-collar & blue-collar jobs should be clear. There should not be a loop whole top give bureaucracy & courts to change its meaning as per their whim & fancy. Bombay shop act 1948 had been repealed in 2018 with the model shop act 2018. It is not functional yet except Maharashtra no other states have implemented it on paper. Actual execution is a distant dream rather daydream. APMC act had been changed by the center with Model APMC act to increasing  competition &  good price realization of produce to farmers Yet to be passed by state gov...

In last week's blog, we discussed how we plan normally. It's good planning but after corona a global pandemic, all of sudden, everything gone standstill. Even without getting a chance to do the necessary. But as we are moving fast towards normalcy, a new beginning has to be done. Here in planning, we have to add a few new things which we had not given due importance. 1. Inactive income we have to add recurring income which should be passive in nature. 2. We have fixed time to do all our family & professional work means we have to give some time routinely like monthly / quarterly recheck portfolio. 3. In financial parlance it is said that we should keep separate 25% of active income in investment & savings.    But it is actually less than 10%. 4. Inflation is good for our financial health. Monitor it. 5. The total incremental income should be proportionately kept aside for investments & savings. 6. Keeping one or two types of investment is not ...

Nowadays we are going through a lot of news negative & positive in the market on various aspects with different views. But surely for any individual, it is not that much easier. Life has changed for everyone on the planet, not just a few. It's a new beginning for each & every one. Whether he is just a college pass-out or a retired person. As no one was prepared for it. Everyone has done his or her financial planning priors to this tragedy which is good in that scenario. But a situation like this has forced everyone to revisit his or her financial planning. We Indians have a mindset to follow the same path which we saw others following. Now one or two income source is not going to work. As to get old days required will be at least 2 to 3 years. This means we have to prepare for not only pay cuts for a long time but also job or business loss. Till now we planned for following - Child Education - Child Marriage - Retirement - Home & Car - Vacation - ...

Back-end Loading- As we discussed last week about what GOI thinking about consumer or market sentiments where they are comfortable. Our purchasing power has not been diminished, now only decision being deferred for some time. Front end or supply side, GOI has given is choice to turn crises into opportunities in the short to long term Major bottlenecks have been addressed. As an animal spirit in major reforms is needed and GOI is responding to it very swiftly. Labor reforms have been initialized which are in demand for a long time. It will create a win-win situation for both employer and employee. The not only cost of compliance will be reduced but also labor contractors will not play a major role. Now labor will get the full benefit of all policies in force from authority as well as employers. Employer will get the trust of employee & employee will get timely & complete payment. MNREGA will create assets in the rural belt so the migrating labor will get jobs f...

Everyone is discussing the stimulus package. Rather they are discussing entitlement which they are used to getting earlier. Now our view on the has been divided into two parts: 1. Front side loading 2. Back-end loading Today we are only discussing opportunities utilized by GOI in front loading. It's a universal truth that we all are consumers. It is also true that our country has two divisions. 1. Urban 2. Rural  In the present scenario, most business establishments have a base in the urban part. There is a lot of problems here with zones, labor as well as the sentiment. Lots of people are losing jobs rather a right sizing by the company as per their assessment as well as the mass exodus of labor to reach their home town or village. Here stimulus has been given by way of PF contribution. Which is significant. But the majority of enterprises had paid salaries to their employees plus their own expenses are less due to lock-down. So there is money with co...