Sunday, January 25, 2009

Investing in Index funds - So boring but I will still do it

I came across the book "The bogleheads guide to investing" in the public library recently. I took it since the name Bogle sounded familiar and I had only 15 mins to choose a book before the library closes down for the day. I assumed it was written by John Bogle but it was not be so. It had three authors - all leaders of an online forum called bogleheads who are basically diehard fans of John C Bogle's investment philosophy. I was sceptical but the book was quite ok. The opinions and advice of the authors had lots of common sense and some of them had really caught my attention and I really want to put them in practice even though my ego is still actually reluctant to follow them.

One of the points was to invest a bulk or all of your money in index funds – equity and/or bond. I am also a DIY investor who started a year ago, right at the peak of the Indian Bull Run. And I don’t have to say that I am not doing too well with my portfolio. It’s obvious isn’t it? But I don’t know if that’s attributable to the financial crisis that swamped the global markets since I started or it’s my poor stock selection. Anyhow!! Coming back to the topic of Index funds I know for sure that investing in these funds are the easiest and the most efficient, and perhaps most assured, way to long term wealth. It does not need much of your time – you don’t have to spend hours going through company’s financials, prospects for the sector, profiling the quality of the management etc. Basically you don’t have to do anything except for choosing an index fund with good track record and low expense. That’s it!! It’s as simple as that.

But the problem lies in this simplicity. Is it not too boring? Where is the challenge, where is the uncertainty, where is the thrill? Don’t we want to beat the market and those highly paid and fancied fund managers? Yes, we certainly want to do that and we can do that – that’s what our ego tells us. But if you really let your commonsense rule then you know for sure this is the way to go forward. So, reluctantly, I am going to look for an index fund that gave decent returns over 5 year period and has a low expense ratio and put in 50% or more of my money. Rest I will manage actively to feed my ego. I may do well or may not, I don’t know yet but what I know for sure is that the 50 odd % of my money in the index funds will do its job of compounding my wealth at decent percentage every year.

So, now let me focus on choosing an index fund!!

Tuesday, January 6, 2009

Oracle India trims salaries with hour-based payments

"Oracle India trims salaries with hour-based payments" - This is the heading of a report I read today on business standard. Couple of paras from this report are given below. They had also mentioned that the employees, while still being on the Oracle payroll, can take up contract work. These guys are effectively suggesting employees to look for a new job without actually forcing them to do it. Its good in one way that if you stick it out for next few months then the situation will be back to normal.

The world’s second-largest software products company Oracle is understood to have begun linking the payment of its 20,000-odd employees in India with the productive hours they spend in the company. This has resulted in salary cuts, ranging between 10 and 50 per cent across the board

Company sources explain that if an employee is a billable resource for 15 days a month, he will be paid in full for that period while for the rest of the period, he is paid a “nominal” amount. Replying to an email query, a company spokesperson in India said: “Oracle does not comment on speculation or rumours.

Sunday, January 4, 2009

Gujarat Mineral Development Corporation Bonus shares delivered

Well! it took time but it happened finally! The bonus shares of GMDC have finally been added to my demat account. These bonus shares are of little solace considering that the price of the stock is down more than 90% of my buy price and I don't see it going back to that price ever again.

If you are an ICICIDirect customer then you won't see these shares added in your portfolio. You need to go to demat allocation page to see them added.