Finergo Episode 11

04 KALEIDOSCOPE

ERGO Monday, February 2, 2009

Ask your query

TO BE OR NOT TO BE

Q: I recently quit my company and joined a new company. My friends advised me to withdraw the PF amount, while others advice me to transfer it to the new company’s account. What should I do?

The question on whether to continue investing in mutual funds or not in the market downturn scenario

Joseph, Omega Consulting, Chennai

Answer: Joseph, if you are not in need of cash urgently it is better to transfer the PF amount to the new company’s account. The first reason is that assuming you have not completed five years in your previous company the amount is taxable. The second reason is more of a self-control issue as it might be tempting for you to spend it off if you see it in cash. In today’s hard times its better to keep cash in your account and avoid spending it.

Q: My company accountant has been behind me to give my tax investments declaration by Feb 15, but I have not done any investments so far and also do not have money right now. Should I borrow money and make the investments and save tax? Satish Kumar, Quantum technologies

Answer: Satish, don’t hurry up to give tax declaration if you have not done anything so far. It’s better to let your company deduct TDS now and arrange for money (without borrowing on interest) and make the investments before 30 March 2009 and then claim a refund from the government. Do you have any queries related to your personal finance? Ask our experts. Mail your queries to [email protected]

Mini Quiz Q1: Who is the new Chief Executive of ICICI Bank A. Chanda Kochar B. K.V. Kamath C. Suneeta Reddy D. Renuka Ramnath

Q2: Who is the governor of the Reserve Bank of India A. C.B. Bhave B. D. Subbarao C. Y.V. Reddy D. Montek Singh Ahluwalia Send your answers to [email protected] or SMS your answers to 92813 98889. For example if you choose A as the answer to question 1 and B as the answer to question 2 type it as 1A2B and send it.

T

he downturn in the markets that started in January 2008 has sent shivers down the spine of many investors in mutual funds. This holds especially true for first time investors whose tryst with equity markets began only in the last few years. The surge in the markets to record highs had lured many to enter the market. But the slide in the index during the last 12 months has caught several investors off guard. What should I do is the question that lingers in the minds of the many people whose investments has gone southwards. Many rush to redeem the units to prevent complete erosion of the principal. Is it a right decision? To answer this question, the investor must conduct an honest appraisal of their risk profile and investment horizon. The investor should also introspect to answer the

question why he invested in a given mutual fund. If an investor believes that he can take on higher risk and is willing to stay invested for a longer period say 3 to 5 years time, then we believe there is no reason to panic. In fact investors can even consider cashing in on the crash and add to their portfolio and average the purchase price

The investor must conduct an honest appraisal of their risk profile and investment horizon. The investor should also introspect to answer the question why he invested in a given mutual fund.

by buying more units when the markets are low. Conversely, if the investor has a low risk appetite and chose mutual fund investment to take advantage of rising market and make quick money, such investors made a wrong choice of avenues for investment. They are advised to work out an exit strategy in consultation with their financial advisors to minimise the loss, if any. Although most investors seem to have lost money, but based on what has been predicted by experts, the Indian markets will in all likelihood start growing in the next 6-8 months. So if you are not too much in a hurry to save and exit what’s left, just play the wait and watch game and let your fund manager work towards making up for lost ground. ■ V.Ramachandran [email protected]

05

Monday, February 2, 2009

Websites of the day Learn the local lingo wherever you go: http://www.urbandictionary.com Catch up with your favourite TV theme tunes of yesteryear: http:// www.tvtunesonline.com/

Camp Major ‘The Startup Guy’ on Proto’s next plans, new initiatives and his next venture in the field of music Starting the ecosystem Barcamp and Blogcamp were our early initiatives that kick-started the start-up movement. We later formed Knowledge Foundation in September

PHOTO: R. RAVINDRAN

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three-month vacation after the Class X Boards can get really boring for some boys. So, what do they do? Work in a computer centre, build and deliver projects and start a company. Vijay Anand was also bitten by the entrepreneurial bug this way, with due credit to his father who motivated him. “I started a company whenever I needed a job,” exclaims Vijay, lucidly explaining the three companies he started. The third being a product company that was involved in making media servers for mobile phones, which he and friends later sold to Nokia. “We slept once in three or four days,” he explains about juggling college, part-time jobs and a company in Ottawa, Canada. Today, it is a line-up of community events like Barcamp, Blogcamp, Wikicamp, Startup Lunch, Mobile Monday and Fix Chennai that keeps him busy. Though all these start-up events have not always received the same response, Proto.in, where he is the curator, at least, keeps him running. The start-up event is billed as one of the best platforms for entrepreneurs to converge. It is on his mind 365 days a year, he says. All this is besides heading the incubation centre at TeNeT (Telecommunications and Computer Networking) at IIT-Madras, where he overseas technological and business development for research/ business incubation departments in IIT. Brought up largely in Dubai, it is amazing to see this 28-year-old, just three-and-a-half years in India (Chennai), spearheading a number of initiatives for the start-up eco-system in India. “Chennai has 560 start-ups, a majority of them working from residential areas, and it is second to Bangalore.” Vijay Anand in conversation with Liffy Thomas:

2006, which is the umbrella organisation for all these initiatives. Proto.in has been getting great response. I have around 3,000 people in my mailing list, though I want the

count to go up to 100,000. When we started Proto we were around 10 to 15 guys. Today, I have about 120 volunteers representing 17 cities – Coimbatore, Vellore, Kolkata... the list is growing. The team functions in 12 different departments, where they evangelise start-ups, etc. Proto.in is largely for technology start-ups. When can we see it diversify? It’s true we have been getting similar feedbacks. In the next edition, which in all probability will be hosted in Pune, we hope to bring start-ups from diverse fields. I want to cut down on Internet and introduce more of bio-tech, energy, healthcare and education. What is the success of Proto with respect to MNCs coming and acquiring them? We have industry majors like Wipro, Siemens, Qualcomm, to name a few, attending these events. Wipro, for example, is working with a start-up in the RFID (Radio Frequency Identification) space. Even at the just-concluded edition of Proto 09 we had a start-up that received an average of 40 offers from clients. Future of Proto Proto has a long way to go. We have to take some companies global – some have huge potential in them. To start off, we are working on taking a group of start-ups to Israel – there is lot to learn from their telecom sector. What next on the agenda? We are having a Searchcamp – conference for website managers and developers – in February end and early March. In Facebook Developers Garage in mid-March, participants will be required to develop applications for Facebook. The entrepreneurial in me... I am planning to start my next venture, but it will take time. I am waiting for Proto to mature a little more. It will be something to do with the music industry. Also, like Proto, I want to bring the music industry to one platform. It will be something like ‘Eurovision’, which will showcase some of the professional artistes in to the world space. One more to Vijay’s many hats. ■