Most Rewarding Investment during Inflation????????

Inflation- A situation in which there is an increase in the general price level index of the country accompanied by a downfall in the value of money. In simple terms very much money chases very few goods.

Generally people ponder over the mode of investments during Inflation. Fixed deposits are a big no-no because say u invest 1000 and the Bank pays you an interest of 10% , after 1 year ur yield will be 10100/- and if the inflation @ that time is say 12%, then the net worth of your money on maturity will be 10100-1212( 12% of 10100) .

On the other hand say u had 1000 in ur hand n u wished to purchase a commodity whose price was 40 u wud have got 25 no.s of it, n say due to the inflation the price of that commodity increaed to 50, u will end up getting only 20 no.s of it.

I feel that the best way of investment during inflation is to invest in the stock markets after the markets are beaten badly because of inflation. My explanation for the above is that, Say during inflation an essential commodity whose price was 40 previously is now Rs 60/- which means u r paying a premium of 20 per unit of that commodity. On the other hand say a stock which is generally trading at 60 comes down to 30-35 because of inflationary pressure, it means that u r getting a 60 Rs stock at a discount of 25-30 Rs. If you can hold that stock for few days it will easily touch 60 + giving u an impressive return on your investments.

This is another Paradox of the Stockmarkets with relation to the Inflation.

* Zimbabwe recorded the highest inflation in the world with an inflation of 2000% in the Year 2007".

Paradox of Law of Demand : STOCK MARKETS!

One of the biggest paradox of the Law of demand is The Stock Market. This is how it goes, Law of demand states that an increase in price leads to a decline in demand and a decrease in price leads to an increase in demand, but in the Stock Markets say price of share X keeps rising , more and more people try to purchase it at increasing prices resulting in an increase in demand of that particular stock, rather than ignoring to purchase that share at a higher price, as proposed in the Law of Demand , on the other hand say the price of that particular shares starts falling down sharply, more and more people try to sell their holdings resulting in a decline in demand of the stock , rather than buying it at a lower price as proposed in the Law of Demand.



This relationship between the Stock Market and Law of demand is mainly due to the speculations of the people who expect that there is some good news behind a particular scrip due to the rising prices of the share and on the other hand they speculate some bad news as the reason behind the fall ofthat particular script!

Quite Interesting, AIN'T IT ? :-)

Lessons from the Middle East.

It is a well known fact that the oil resources in the middle East are estimated to exhaust in the next quarter of the Century! Oil resources account for more than 90% of their total Exports which means that the progress of the major economies might have to come to a grinding halt. However it was quite interesting to witness the move of the U.A.E. and Saudi Arabia in this regard, They have come up with a Weapon which is likely to be the most rewarding industry of all Time- The Tourism Industry. Statistics reveal that Tourism will be the future! It is expected to become a Multi Million Dollar Industry world wide. UAE has already started its preparation with many Mamoth structres like the Al Burj Tower, A Township in the middle of the Sea and many more. UAE is already known for its huge and palatial Buildings, With the Tourism Development plan being implemented , Its loss arising out of the ehaustion of Oil Resources is likely to be offset by the budding Tourism! On the other hand SAUDI ARABIA , already has the Holy Mecca in its side, The number of people visiting Mecca is also on the rise! Saudi Arabia too has already effectively implemented its Tourism Plans, Dubai Shopping Festival is an example of it- It is considered to be one of the most famous Shopping Festivals of all time. Infrastructural mrvel has been the brain child behind UAE's Plans whcih means they are going to pump in millions of Dollars for the infrastructure amenities. The same is expected with Saudi Arabia too.
Many Middle East nations are likely to follow the steps of the mightyUAE and Saudi Arabia in order to offset the loss of oil resources. Who knows " Middle East" which is known known for its hold on Oil might well be the "Ultimate Tourist Destination " in the future

Investment Gyaan!!!!!!

If you think Only Equity, Mutual Funds, Deposits, Debentures, Bonds, Commercial Papers ...... are the only source of Investments, then we have committed a blunder , The Most precious and rewarding investment in this World is ''I.I" which means Intellectual Investment - Its all about investing in urself and capitalising on it. Intellectual Investment is all about Common Sense, Foresight, Awareness, Innovation,Enterprising, Commitment and "PATIENCE". But lets hit back to realistic and senseful modes of Investment which people all over the world widely accept- The Capital Markets, Real Estates, Trade, Money Markets etc.

"TO BE CONTINUED SOON"