Finance Articles

Finance articles section focuses on various concepts of finance like budget, stock market and economics of various products & services. Apart from these articles on global financial institutions, different banking systems and topics of international importance in the field of finance are present.



Systematic Investment Plan (SIP) - The Right Way 08 February 2011

Recently when I was reading a magazine I read a story of Chinese Bamboo which tried to relate and explain the significance of Systematic Investment Plan (SIP) in financial market.  The story went something like this that in small village there lived a farmer who has a meagre income. One day he met a wise man seeking advice on how to improve his income. The wise man asked him to cultivate Chinese Bamboo. So obeying the wise man the farmer cultivated Chinese Bamboo for a whole year but nothing happened. The same thing he did the second year and still nothing happened. Though disheartened he continued for the next 3 years as well. After 5 years, the bamboo sprouted and grew quickly in the no time yielding him high returns. Thus the farmer became rich. The SIP also works on the same principle which is that an investor will earn unbelievable returns in the long run.

 

CIVETS – The next BRIC Economies 06 February 2011

A new term has been coined to represent the next set of emerging markets, CIVETS countries, the new BRIC on the block. The CIVETS countries are Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa. They are touted as next emerging markets because they have diverse economies, fast growing population, relatively stable political environments and potential to produce increasing returns in the future. They are unhampered by high inflation, trade imbalances and sovereign debts. CIVETS are second-tier emerging markets that have relatively sophisticated financial systems and do not face runaway inflation, massive current-account deficits or public debt. Economic Intelligence Unit (EIU) has forecasted an average growth rate of 4.5% for these countries for next 20 years but only 1.8% for developed countries.

 

RBI's Credit Policy - Significance and Limitations 31 January 2011

Often we read in the newspapers about RBI’s monetary policy but rarely do we understand what it is actually all about. So in order to understand let us have a look at what it actually means and why is it so important for a country.  The term monetary policy is also known as RBI’s credit policy or money management policy. It is basically the central bank’s view on what should be the supply of money in the economy and also in what direction the interest rates should move in the banking system. Such and many other questions related to the demand and supply of money in the economy is explained by the monetary policy

 

Real Estate Bubble and The Stock Market 27 January 2011

“A little bubble once came sailing by”…..and when it crashed it made everyone cry.

 

This is the story of the economic bubbles from as early as the 18th century.

Both the real estate and the stock market mirror the economy of a country. Real estate exerts a strong influence on the stock markets and by analyzing the real estate cycle in the economy one can better forecast the stock market movements and profit from it.

 

Quantitative Easing - The Basics 18 January 2011

Central banks usually set price of money using official interest rates to regulate the economy. These interest rates radiate out to the rest of the economy. They affect cost of loans paid by the companies, cost of household for mortgages and return on saving money. Higher interest rates make borrowing less attractive because taking out a loan becomes more expensive. They also make savings more attractive.

 

Economics of Petrol Pricing 16 January 2011

The entire country was looking forward for a better year as compared to 2010 with less frequent price hikes and lower inflation. However the euphoria came to an abrupt halt by a move which will severely affect the common folks’ life. Oil Marketing Companies led by Indian Oil Corporation have yet again hiked the price of petrol. Petrol prices, starting from midnight today will be Rs 2.50 dearer across India. And this the second similar hike in under a month and each time the reason being the global increase in crude prices, which has now touched $92 per barrel. The last petrol price hike of around Rs 2.90 was on December 16th, 2010.

 

Green Financial Products and Services 12 January 2011

With the entire world becoming environment conscious, financial industry is not far behind in its contribution towards greener world. Green financial products are introduced in the financial industry providing platform for ethical and eco-friendly investment. Many organizations have realized that there is direct correlation between competitiveness & profitability and environmental protection. Keeping this in mind financial institutions have developed “green” financial products with the aim of promotion of sustainable development. These green financial products must reduce negative environmental impacts or provide environmental benefits.