70 years of saving and investing in India

If in the 1950s somebody wrote a future finance story about India, they may not have predicted the market that faces a retail consumer today. Till the 1990s, your savings and investing decisions were dependent on the government. No wonder Indian households chose gold and real estate as saving sumps. The financial sector was a reflection of the overall direction of the economy. Costs were high, service poor in state-owned and run finance. But post 1991, change came suddenly to finance and this column maps some of those changes as India celebrates 70 years of political and 26 years of economic freedom.

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Being Zen in frenzied times

Low Risk High Return Buy 5000 SHARES Of xxxx CMP Rs 7.80 TGT Rs 15 SL Rs 7.70 . Stock Raise Non Stop Till Diwali.” Over the past few weeks some of us would have got messages pushing this one stock.

As markets keep moving up, the frenzied calls and SMS texts that push up a particular stock increase in frequency. I don’t get emails or WhatsApp messages pitching stocks—just calls and SMSes. Some of the callers are really aggressive. Push back at them and they start snarling. Obviously they’re sitting on very steep customer acquisition targets. But we know from past experience that any kind of frenzy usually ends badly. If you gave into the frenzy of real estate a few years back, you’re looking at a nominal erosion of 30-40% of the price you paid. An inflation- and mortgage-cost-adjusted loss will be closer to 50-60%. Frenzies are unsettling. You lose your equilibrium. You get pushed into doing things that you normally won’t do. If you find yourself thinking of suddenly moving money into one stock or one mid-cap mutual fund on a tip, you know you’ve succumbed to the frenzy. Otherwise I’m-safe-in-an-FD (fixed deposit) people are suddenly discovering their risk appetite and want to invest right away on a tip.

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Trying to get the right mediclaim can make you sick with worry

Anybody who has struggled with trying to select a mediclaim policy will know how painful it can be. There is plenty of choice and lots of hard sales push, but no way to know what works for you. There is an information gap in the market today—there is plenty of information out there but it is of little use to somebody wanting to buy a policy. Until you have an experience of hospitalization, you would not know what features are important. It took me one stint with a family member suffering from food poisoning to find out what a sub-limit means. For those still out of the loop—if your medical policy comes with a ‘sub limit’ clause, there will be a limit to what the company will pay for room rents.

As consumers, we’ve moved quite a distance from buying the cheapest policy in the market. Low premiums can also mean lots of things hidden in the fine print that the policy does not pay—like a high room rent or for treatment of a particular disease or a particular medicine. At the very basic level, a mediclaim policy is good if it comes at a reasonable price, promises good benefits and pays up the claims when they are made. Sounds simple enough, but begin reading a policy document and you will be stumped to decode what the jargon means. The Mint SecureNow Mediclaim Rating does the grunge work for you and trawls through some 400 data points to bring you a shortlist of policies that make the cut on the three parameters.

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