What Does it Mean?
The sale of securities to a relatively small number of select investors as a way of raising capital. Investors involved in private placements are usually large banks, mutual funds, insurance companies and pension funds. Private placement is the opposite of a public issue, in which securities are made available for sale on the open market.

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What Does it Mean?
An offer made by one company to buy the shares of another for a much higher per-share price than what that company is worth. A bear hug offer is usually made when there is doubt that the target company’s management will be willing to sell.

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 I guess most of the doctors & lawyers will agree with me that, most of the cases we come across while practicing our profession are a challenge in themselves. The practical world is quite different from the theoretical stuff that we study. Though we may have done n number of case studies while preparing our exams but real life cases have their own dynamics & difficulties, because they are not just about passing an exam but about saving somebody’s life or money!

One distinct case which I came across & the solution which I could best think of are discussed herewith:

A gentleman named Raj (name changed); aged about 37 years had come to me. His wife, Reema (name changed), 35, is a housewife. They have two daughters Disha (name changed), 12 & Megha (name changed), 10. Rohit has a small business of his own. He always had the urge to earn big money. So he borrowed heavily to invest in business & even some part in stock markets. As luck would have had it & his inability to make the right decisions, his venture did not succeed & today he stands at a big amount of debt hovering on his head.

His current income from his small time business gets wiped off in household expenses & meager part of it is used to pay off the debt installments. But the debt burden is so huge that if his income remains at same levels then he might take another 30 years to pay it off. Apart from this, his major worry was that how would he accumulate money for his daughters’ marriage.

When he came to me with his these two problems, I told him not to panic; problems are a part of everybody’s life. Then at the cost of sounding blunt I even reminded him that it’s not only his daughters’ marriage but also his own retirement which he should plan. Agreed that due to debt burden he would retire late but it is due to happen some day as health would deteriorate. Imagine a situation, where (GOD Forbid) due to health problems he may have to stop working actively & hence his business closes down, then how will he source his income to take care of expenses & repay the debt(if it still persists)? Another important point was his insurance. The question is tomorrow if he dies, who will pay the debt? Hence adequate insurance is a must too.

It was like problems were plenty. So I suggested, let’s prioritize them & find solutions. The first & foremost thing was to take insurance. Hence I recommended him a term plan (cheapest life insurance solution) adequate enough to help his family maintain their standard of living & enough to repay his debt.
Then he thought the second most important thing is to accumulate for his daughters’ marriage. I just asked him; do you remember whose marriage you attended last? As in the name of the bride & the groom. He had no answer. He almost got my point but still I explained him that, why to think about splurging on marriages? Who anyway remembers them? Apparently the food, caterers & jewellery are more important than the bride & groom. Obviously one should celebrate the occasion, but should not go overboard about it, especially when one cannot afford. So I suggested that don’t worry about daughters’ marriage expenses, rather invest that amount in their education. If you cannot afford that too then there are various NGOs to help you for the same. Remember “Investment in Knowledge is the best Investment”. If his daughters’ will be educated enough then all other things will automatically fall in place.

The next question was his retirement planning. He would have needed X amount if at all he retires at XYZ age to sustain the post retirement phase. For that he would have to invest ABC amount every month to reach his goal. But as stated above, his current income could hardly manage to take care of expenses, how could he save & invest?

I suggested him, try to concentrate on your business, may be take up a course like part time MBA & empower your knowledge about your business & expand it, ultimately your income will increase, which will have answer to all your problems. So if business & hence income improves then, debt can be repaid faster, saving & investments can be started & after a point business can be left to be run by some one else & you can take voluntary retirement. It all seems rosy but will require your willpower & self motivation to take you there. Obviously I am with you throughout the journey as your friend, philosopher & guide to support you.

He appreciated my eye opener on Importance of education rather than marriage & promised that he would concentrate all his energies (time & effort, because money he tried before & could not afford it now) to his business & make it more successful. At the end I was satisfied too for the fact that, I could help my clients beyond their financial problems. Though his problems were related to finance, but their solutions were psychological. Hence in my entire article I have not mentioned numbers (apart from age) as I BELIEVE FINANCIAL PLANNING IS BEYOND NUMBERS!

This is the best solution I could think of for such a case. I would really appreciate if you readers have any other view about it. Do mail me your views.

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What Does it Mean?
Seed money or capital given by family or friends to an entrepreneur to start a business. The decision to lend money and the terms of the agreement are usually based on qualitative factors and the relationship between the two parties, rather than on a formulaic risk analysis.

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What Does it Mean?
People who keep up with fashion trends without spending a lot of money. Frugalistas stay fashionable by shopping through alternative outlets, such as online auctions, secondhand stores and classified ads. They also reduce the amount of money spent in other areas of their lives, such as by growing their own food and reducing entertainment expenses. This is a popular term during recessions.

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What Does it Mean?
A financial instrument held by a third party on behalf of the other two parties in a transaction. The funds are held by the escrow service until it receives the appropriate written or oral instructions or until obligations have been fulfilled. Securities, funds and other assets can be held in escrow.

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Application Supported By Blocked Amount

 Have there been times when you wanted to subscribe for an Initial Public Offer (IPO) but hesitated because you couldn’t afford to lock-in so much money for extended period? Apart from your money being frozen, you are seldom assured of full allotment of shares.

There have been many instances over 2007 and 2008 when investors could not get any allotment in an IPO. In such instances, the dejection only increases. The ASBA or Application Support Blocked Amount process introduced by SEBI in 2008 can lessen investors’ anxiety to a great extent.

What’s ASBA?

ASBA means “Application Supported by Blocked Amount”. It enables investors to apply for Initial Public Offers (IPOs), Follow on Public Offers (FPOs) and right issues without making a payment. Instead, the amount is blocked in investor’s own account & only an amount proportionate to the shares allotted goes out when allotment is finalized. It is a supplementary process of applying in IPO made through book building route and co-exists with the current process of retail investors using cheque as a mode of payment and submitting applications.

Once you decide to go through this route, you cannot make another application through a cheque. If you apply through a cheque and ASBA, your application will be rejected on grounds of multiple applications.

When introduced in 2008, ASBA could be availed only by retail investors. Recently, this clause was amended to accommodate corporate investors and high net worth investors (HNIs) from January 1, 2010.

How it works:

- To submit ASBA Application form

ASBA can be submitted to the Self Certified Syndicate Bank (SCSB) with whom the bank account authorised to be blocked, is maintained. You can either fill up the physical ASBA form available with SCSB and submit the same to it or apply electronically through the internet banking facility (if provided by SCSB). Investors need not necessarily have their DP account with the SCSB, where they are submitting the ASBA form. In case of public issue, the application form for ASBA will be different from the existing application form for public issues. In case of rights issue, there will not be a separate form for ASBA. The investor has to apply by selecting ASBA option in Part A of the Composite Application Form. ASBA forms will be treated similar to the non‐ASBA forms while finalizing the basis of allotment. The SCSBs are required to give the acknowledgement for submission of ASBA application form. The bids received through ASBA mode will also be reflected in the demand graphs displayed in the website of stock exchanges.

- To fill the application of ASBA

List of SCSBs & their designed branches i.e branches where ASBA application form can be submitted, is available on websites of BSE (www.bseindia.com), NSE (www.nseindia.com) & SEBI (www.sebi.gov.in). The same would also be given in the ASBA application form.

- Applicant allowed withdrawing ASBA bids

During the bidding period, one can approach SCSB, to which he/she had submitted the application and make a withdrawal request, post which, the bank will unblock the amount. After the bid closure period, applicants need to send their withdrawal requests to the Registrars in order to withdraw their bids. Subsequently, the Registrar will ask the SCSB concerned to unblock the application money in the bank account after the finalization of basis of allotment. Note that once you have submitted your bid, you cannot revise it, though you may withdraw from the bidding.

Advantages

• Despite not being mandatory, it makes sense to opt for ASBA as it scores over the traditional mode of cheque payment in several areas.
• It enhances the transparency of the share allotment process. Only that amount that is required to make share allotment is debited to the account after the bid is selected for allotment after the basis of allotment is finalized. Therefore, the applicant need not worry about the refund in case he/she is not allotted any share.
• Moreover, since the money remains in the bank account, he/she does not lose out on the interest that can be earned during the period.
• The application form is simpler.
• The investor deals with the known intermediary i.e. his/her own bank. 
• Remember, you can bid only at the cut-off price. Therefore you stand a good chance of being allotted a fair portion of the shares you have applied for.

Life is really simple, but we insist on making it complicated.  ~Confucius

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Source: www.investopedia.com

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In the outcome of back-to-back holidays, eventful family gatherings & year-end celebrations & generally, too much food, there emerges the New Year’s Day & along with New Year comes the renowned NEW YEAR RESOLUTION! I am sure many people can’t wait until they can attempt to make a new start, reverse all the wrong doings and become a better person.

Every year millions, if not billions of people make new years resolutions, something they plan to do in the New Year and hopefully stick at forever!!!! It’s common practice for people to evaluate their lives at this point, and to consider what they can do to make the coming year their best yet. Why shouldn’t one apply that same thinking to his investments esp. in stock markets?

You too can make a Resolution like ‘BE A BETTER INVESTOR IN MARKETS’. Below mentioned are some of the Simple Rules which can be followed to fulfill this resolution:

• Never marry a stock.
• Cut your losses and let your profits run.
• The formula for success in the stock market: patience, perspective, and unfortunately, failure.
• Use stop-loss levels.
• Never overtrade.
• Never let a profit run into loss.
• Do not go against the major direction of the market.
• When in doubt, get out and stay out.
• Trade only in active stocks. Keep out of low flop ones.
• Avoid giving limit orders, especially for selling. Trade at the market.
• Don’t close your trades without a good reason.
• After having made a series of successful trades, don’t throw caution to the winds. Use a part of the surplus for a rainy day.
• Never buy just for the sake of dividends.
• Never average a loss.
• Never get out of the market just because you have lost patience, or get into the market because you are eager for some action.
• Never cancel a stop-loss order after you have placed it at the time you made the trade.
• Avoid getting in and out of the market too often.
• Never buy a stock just because its price is low or go short if you feel that the price is high.
• When the ship is sinking, don’t pray, JUMP.
• Buy a little in anticipation with a strict stop-loss. Buy more aggressively on confirmation.
• Don’t hedge just for the sake of hedging.
• Rely on technicals. Avoid getting carried away by news and rumors.
• Don’t bite more than you can chew.
• A buck in hand is worth two in the books.
• Nothing succeeds like success, so stick to the winning strategy.
• Relative strength works. There is nothing wrong with owning more of a winner.
• The market will do whatever it must, to prove the greatest number of investors wrong.
• If you have never lost money in the market, you’ve never played the game.
• You ought to be able to make more money than you lose, in the stock market that’s the only definition of being right.
• Let others fish for bottoms.
• Bet before the race is run, not when it nears the finish line.
• You can always buy back a stock.
• Anyone who has the compulsion to be perfect, to be so free from error that every deed will prove him right, will be driven mad by the stock market.
• The indicators should be used to provide market timing. Don’t put any more burdens on them than that.
• Not all emotions are misplaced at the market; after all, we’re not entirely crazy and many times our feelings may parallel stock action; our instincts may be perceptive. But we will bet, those insights usually come when you have no personal stake in the matter.
• You are not going to make money every time. No one does.
• The accumulation of capital over the years is based on the old saying, “It’s not how much you make, but how much you don’t lose.”
• There is a right time to sell, but you can buy at many different times.
• Let the market tell you. Don’t try to tell the market.
• Do not rationalize failure.
• The decisive act of selling may turn out, with hindsight, to be a mistake, but the indecisive act of not selling can turn out to be a disaster. Not to sell, is perhaps the riskiest investment approach of all.
• Indecision is habit-forming, and can be injurious to your wealth.
• The price you paid for a stock is absolutely irrelevant to where and when it should be sold.
• When the market does the unexpected it is doubly significant.
• Paper trades are always profitable.
• Rarely will one indicator act in isolation; usually many will be saying “Sell” in various tones at just about the same time. When they speak in harmony, believe them.
• When a lot of people are shouting for your stocks, oblige them.
• Better safe than sorry.

PS: The above mentioned are just my thoughts on the basis of my experience, they are not recommendations or strict rules & may not necessarily be right in all situations.

Year’s end is neither an end nor a beginning but a going on, with all the wisdom that experience can instill in us.
         - Hal Borland

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It is extremely common these days to have homeowner’s insurance on your house.  For starters, this is great because your house and all of your belongings will be covered in case of a terrible disaster.  If you have pets, then the insurance will cover any situation if your pet tries to bite someone.  One of the great things about insurance is that it will protect other individuals that come to your property in case of a negligent accident.

What Kind Of Insurance Is Right For You?

As a homeowner, there are two types of insurance policies that are available to you. 

1. Homeowner’s:  This type of insurance combines both liability coverage and property coverage to protect the family’s home and all belongings as well as any accidents that may occur on the family’s property

2. Dwelling:  This type of insurance only covers property loss. 

There are the same amounts of coverage for both policies; the difference in the two comes the things each one covers.  There are also special homeowner’s insurance policies for manufactured homes.  Individuals that own condominiums can find insurance as well, but most of them only cover the contents of the house.

Tenants that are renting a home can also purchase insurance, but it is called renter’s insurance.  It has basically the same coverage options as homeowner’s insurance, but sometimes it does not have the liability coverage. 

Things To Consider When Searching For Policies

The location of a home can be the most important thing to consider when you are searching for the right homeowner’s insurance policy.  Most areas that have a greater risk of losses will usually have policies with a higher coverage cost, or premium. 

A lot of insurance companies may be unwilling to provide you with insurance if your home has hazardous features.  Certain hazardous features are:

• Inferior construction

• Unbolted frame

• Hazardous shape of the roof or covering

• Unsecured water heater or chimney

• External hazards that may consist of awnings or other exterior ornamentation

• Structures that are not up to current city code

• A basic lack of maintenance on the home itself

It is very important to keep up with the maintenance on your house and keep it up to the current code.  Always evaluate all of your homeowner’s insurance options before choosing the one that is right for you.

Be sure that you understand everything about your policy.  You should always know what perils are covered and whether the coverage amount will be sufficient in times of a disaster.  There are ways that you can reduce your premium on your homeowner’s insurance, and your insurance agent can go over all of those things with you.  Happy insurance hunting!

Article Source: http://www.articlealley.com/article_1317333_19.html

Author: Alen

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