Investing where? Gold or silver?

It is really important for an investor to first understand the economy and the financial systems prevalent in the market before he decides what to invest in. With the cost of crude oil having increased considerably per barrel, the GOI has also acted by increasing the price of petrol and diesel severely.


Should an investor buy more gold or silver?

Precious metals were the best performing assets for the second consecutive year and also for the fourth time in the last five years. Investors enjoyed a 42% return by investing in precious metals in 2010. Silver performed much better than other precious metals in the market in 2010 with prices rising by an astounding 80% which is two and half times the rise in price of gold (29%).

Along with being deemed a safe investment, the relatively low supply of the metal as compared to the high demand has also contributed to the steady increase in price. In the first two months of 2011, silver's price has increased at a steady 9.3%.

Judging by the present market scenario, investing in precious metals will be a very wise decision. And it will make more sense to invest in silver than in gold….at least now!

Some parameters one should consider before investing in gold or silver?

One of the main reasons investors prefer investing in these two metals is the stability witnessed in the market. Liquefaction is also an easy process for gold or silver bars and coins. However, purity of the mineral is of utmost priority and should be given due importance.

Another important factor governing the decision on whether to invest in gold or silver is the price. Though the variation in the price of gold or silver is not as unpredictable as that of shares and equities, there still is a noticeable difference on a daily basis. But when you are investing a large sum of money then this can make a lot of difference. Hence, one should study the market carefully and invest when the price is relatively low.

Choosing the right vendor is also very important. If carefully observed then the price variations with wholesalers, retailers and commercial banks can be clearly observed. So one should watch out for the purest gold available at a comparatively low price. For a regular investor, it makes sense to invest at regular intervals. This way one can take advantage of the market volatility. Investing in both gold and silver makes sense for a regular investor as he can diversify and can have a steady return irrespective of market fluctuations.

Different forms of investing in gold and silver:-



Bar: One of the most traditional ways, dealing with bars is very simple too.

Coins: This sort of investment depends on the weight of the gold or silver coins.

Accounts: Swiss banks provide a Gold-account option which aids in transactions involving the precious metal.

Gold Exchange Trade Funds: This method helps gold transactions through the stock exchange.

Spread betting: This involves predicting the rise and fall in the price of gold or silver before investing in it.

Investing with mining companies: This is just like investing in the stock exchange. The only difference is that here one deals with shares from mining companies.

When is the right time to sell gold or silver?

With the current financial slump, people are selling their gold and silver as a means to make some extra cash. But with the price of the two precious metals having reached an all-time high, it would probably be wise to hold on to it and see how far the prices soar and then cash in at the opportune moment.

There are two factors that govern the decision of the timing of a transaction involving gold or silver. The value of the US Dollar at that moment and the investor's financial situation. Usually, the price of gold is inversely proportional to that of the US dollar. But most investors don't have pure gold lying around in large quantities. So unless you are investing or speculating on a really large amount of gold or silver, the drop in the US Dollar's value will not matter.

How to pay off your education loan

Many young people have a serious problem on their hands today - they have a degree which does not help them get a nice job. They have taken a loan to get that degree, and they have no place to stay in a big city.


Welcome to the American lifestyle. Children who have left their houses to go to a bigger city to get a degree - quite likely an MBA are wondering what to do. The actual scenario may be a little different from case to case, but it is somewhat like this:

Here is a boy or girl from a not-very-well-off family who has been enticed into doing an MBA with a huge bank loan. However, by the time the student completes the course the market is in a downward spiral and he/ she is unable to find a job. Actually not enough jobs are being created. In this situation what can a student do? Well, here are some useful tips:

1. Go get a job, any job: It is quite surprising as to how people can sit at home and twiddle their thumbs WAITING to see what to do in life! Go get a job, any job. This has to be the most important advice for an MBA graduate or also an engineering graduate! If you think an MBA degree should get you a Rs. 500,000 job at the least, it may not always happen in real life. I have seen MBAs working on a starting salary of Rs. 6500 (year 2009) and are not badly off for it!

2. Stop thinking sales job should not be done: There are many MBA students who have unfortunately got into a mindset that sales jobs are bad. Sales people bring in the money for the organization to run, so selling is not so bad after all. If you ever want to be a CEO, go and learn how to sell. Other tasks can be outsourced, but if you have a product, YOU NEED to be passionate about it. Learn selling skills is very important – do quick arm-chair researches on how many Managing Directors have reached that post from the sales side of the organization. If you have to be on your own, then you need to be passionate about sales. That is one very important characteristic that venture capitalists will look for if you are seeking funding for your project.

3. Try to defer your student loans: Just check out the possibility of deferring your student loan repayment. The bank may agree to charge you interest for the deferred period, but at least the day-to-day worry about the month end payment is postponed. If your parent has given the guarantee, keep them informed and let them know that you will not be able to meet the commitment either in full or part.

4. Take no chance with insurance: Ensure that your vehicle insurance, medical insurance and life insurance payments are up to date! These are the easiest of payments to skip, and tempting too. Do not delay or neglect to pay - if you break your leg you still need medical insurance. Make sure that you have a cheap term insurance and some minimum medical insurance at least.

5. Keep your chin up: Learn to laugh about what is happening in your life. I am sure that this is easier said than done. I recently heard of a client whose daughter was in coma for 9 days. Would not have been easy, but he was holding his chin up. So remember, tough times do not last, tough people do.

6. Move back to your parent’s house: If you have moved from your town to a city to study or take up a job, seriously reconsider moving back. It is all right to come to town for interviews instead of incurring rent at a new place. This is really a tough call - it is a mix between wanting to be where the action is and saving some money. Tough call kids, but you have to take the call.

7. Join groups: Alumni, HR groups - any group to keep in touch with the corporate world. All colleges have (and need) such groups which meet - accounting, finance, Human Resources, just about anything. There is some chance of meeting a potential employer!

8. Some small companies will happily let you work for free! Well, if they offer you Rs. 5,000 per month, do not get into an ‘I am a MBA’ kind of aggressive mode. Just take it. Yesterday heard of a kid who moved from Rs. 5k a month in a production house (media companies are perhaps the worst exploiters!) in the year 2007 to freelancing today at a price of Rs. 80,000 a month (year 2010). Yes, on an assignment basis! It pays to have a worn out sole and some time spent in the sun.

9. Learn some skills: Public speaking, dramatics, Excel, Power-point, basics of business finance, sales marketing, and written communication - all are useful skills. See what you can learn for free, and what you can learn cheap. Offer to do some marketing for the organizer – tell him you will get them five people signing up – and can you attend for free? No harm in asking. See if you can get something free or for a pittance. Learn everything that you think is transferable...all this can add up.

10. Be clean: Say no to drugs, tobacco, alcohol - all these have a terrible way of catching up in your corporate life later on. Be clean, be clean, be clean, need one say more? No drunken driving, getting into trouble for anything illegal. And do not get into some bravado about doing something like this and putting it on Facebook. Enough numbers of HR people keep prowling FB for tell tale signals.

11. If you rely just on job websites for a job, you are doomed! Be on job sites, be on networking sites, be on Facebook, be on LinkedIn, just connect, call, meet and get a job. If you still cannot get a job (be honest to yourself, not to me) there is something wrong with your attempt.

12. Keep that credit card at home: If you do not know how you will repay a loan, do not take the loan. Carrying a credit card with you everywhere is not a great way of avoiding temptation. If you know you cannot resist the urge to buy, destroy the credit card. Get a new card when you have a job. By that time if you have learnt to live without a credit card, rejoice! An eight percent growth economy creates enough jobs. You will find yours, for sure.

Harshad scam crores released

The custodian appointed to look into the 1992 securities scam today released payments worth Rs 2,196 crore to the income tax department and the State Bank of India from the liquidated assets of Harshad Mehta’s group of companies.


Nearly 19 years after the share scandal shook the BSE, Satish Loomba, the custodian (trial of offences relating to transactions in securities), handed over cheques worth Rs 1995.66 crore to B.P. Gaur, the director-general of investigation (central) of income tax, and Nilima Mansukhani, the chief commissioner of income tax in his Nariman Point office.

Another cheque of Rs 199.25 crore was given to B. Sriram, the chief general manager (securities) of the SBI.

The amounts were released after the Supreme Court on Monday declined to stay the distribution order by Justice D.K. Deshmukh of the special court, Mumbai, on payments to the IT department and the SBI.

Justice Deshmukh had issued the order on February 25. The payments were released on the basis of undertakings given by the department of revenue and the SBI that the amounts would be brought back, if ordered by the special court.

Loomba told reporters that the nearly Rs 2,000 crore payment had settled the IT department’s claims of principal amount of dues from Mehta’s companies.

He said according to court orders, the IT department’s claims had to be settled before those of banks and financial institutions. If any money remained, claims related to interest and penalties would be settled for the IT department as well as banks and financial institutions, he said.

The custodian said of the Rs 4,500 crore obtained from liquidation of Mehta’s companies, Rs 4,000 crore had already been disbursed. The rest would be distributed according to apex court orders, Loomba said.

He said of Rs 1,717 crore in claims from banks and financial institutions, nearly Rs 1,000 crore was claimed by the SBI, Rs 500 crore by Standard Chartered Bank and the rest by other banks and FIIs. He said after the nearly Rs 200 crore payment, the SBI had now received the principal amount totalling Rs 800 crore.

The custodian is the principal administrative officer appointed under the Special Court (trial of offences relating to transactions in securities) Act of 1992 to deal with the securities scam and the recovery of huge amounts of money lost by the banks.

Under the act, the officer has the powers for attachment, management and liquidation of assets of notified persons and functions under a system of concurrent judicial review by a special court comprising sitting Bombay High Court judges.

With today’s payments, the custodian has released over Rs 4,000 crore worth of payments from the liquidated assets of Mehta’s group of companies.

Courtesy: - The Telegraph,Kolkata.17/03/2011.