A mutual fund company is an investment company that receives money from investors for the sole purpose to invest in stocks, bonds, and other securities for the benefit of the investors. A mutual fund is the portfolio of stocks, bonds, or other securities that generate profits for the investor, or shareholder of the mutual fund. A mutual fund allows an investor with less money to diversify his holdings for greater safety and to benefit from the expertise of professional fund managers. Mutual funds are generally safer, but less profitable, than stocks, and riskier, but more profitable than bonds or bank accounts, although its profit-risk profile can vary widely,
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Land is real in Real Estate (R.E.) and not manufactured. Our very existence is on it and largely because of it. It is tangible, indestructible, can’t be stolen physically.
Indian population has doubled in last 50 years and so has the urbanization from 20 percent to 40 percent resulting in great demand for limited urban land.
This has set the prices upwards in almost all urban areas.
In place like US where land per capita is ten times more than India, land prices have been stagnant.
a. Hurdles in R.E. Investment –
- You need minimum Rs. 15 -20 Lakhs to buy a single bed room flat or 1000 sq. ft. land in a reasonable locality of even 2 Tier or 3 Tier Cities in India.
- Diversification is out of Range for majority for want of more cash, over and above that for their residential purposes.
- Transactions of R.E. are always risky because of problems in title disputes. There are many frauds noticed.
- Transaction cost is high i.e. around 10% of the cost.
- You need expert’s guidance
- Social risk of encroachments.
- Out dated tenancy laws make it difficult to give on rent.
- R.E. has very little liquidity. You can sell 1 tons of Gold worth Rs. 300 Crores (September 2017) & realize the money in couple of days. But, when you are in dire needs, you may not get even 3/4th the price of a single bed room flat in a whole year.
- You need through knowledge, lot of Experience, perspective & lots of money to buy right type of real estate, at the right place at the right time & price.
- Over and above, this one needs holding power of 5 years to 10 years to make RE investment option safe & profitable. This is not easy proposition for most of us.
- Like a stock market or Gold markets, there is no market as such for RE where proper price discovery takes place.
- Every property buyer-seller is unique. Two identical, adjoining flats may fetch quite different prices depending upon needs, circumstances, backgrounds of buyers and sellers.
Of course Real Estate is tangible in real sense, has some important uses like constructing your home, houses, school colleges, factories, roads, shopping malls, offices and so on.
Thus, entrepreneurship can add great value to it.
Owning a house is lifelong ambition matter of sentimental- emotional satisfaction for almost every one.
Diamond is pure Carbon Crystal in Octahedrons. It is the hardest natural substance in the world, actually five times harder than the second hardest mineral corundum.
It is found in Botswana, US. and Russia etc. some of the biggest companies in Diamond business are Dee Beers, Alrosa.
Diamonds are defined by 4Cs, namely Colour, Clarity, Cut, and Carat.
- Best quality is blood red.
- The most brilliant cut is into 58 facets. A certain Company is supposed to have cut it into 73 Facets.
- 5 Carats are equivalent to 1 gram.
In India around 2015, a one carat average Diamond was costing Rs. 3 Lakhs (where as a 3 carat Diamond was costing Rs. 50 Lakhs.
A high quality Diamond of 10 to 15 carats = 2 to 3 grams could cost as much as 100 kgs of Gold worth Rs. 30 Crores (Rs. 300 Million).
Its extremely condensed value and portability bestow Diamond as a form of emergency funding for the dictators, Rulers, Super rich on a panic flight.
Largest Diamond ‘The cullinan’ of 3106 carats weighing 0.60 kg was found in South Africa.
It has no fungibility, every single Diamond is unique like every single human. Being brittle, it could be easily scratched, damaged.
Therefore, difficult to maintain.
Large number of variables in quality makes pricing difficult, subjective. Hence, no loan is given against Diamond as security. You should have complete knowledge to buy diamond.
Because of all this no terminal market for Diamonds, resulting in no liquidity.
As a matter of fact, expert says there is no natural shortage of Diamonds. Gem quality synthetic Diamonds are produced since 1970 which cost a fraction at Rs. 150 per carat approximately.
So Diamonds are not at all an investment option for anybody.
The super rich can buy Diamonds for prestige, showing off or on a panic flight in emergency.
