Credit card giant VISA is coming up with U.S. largest IPO on March 16-20. The stock is expected to start trading March 19 or 20 under the proposed symbol V, at anywhere from $37 to $42 a share. Here are my take:
1) After successful IPO of Mastercard everyone is excited about Visa IPO. However, Mastercard IPO was well priced.
2) Visa IPO is priced according to Mastercard current stock market value. However, IMHO Mastercard stock is overpriced now.
3) Visa IPO will be used to cover litigation and will try to help all banks which are part of Visa networks. However, most banks are in subprime mess and overall economy is slowing down.
4) Buying or not buying is tough decision. Stock market in next 20 days will decide faith of this IPO.
More at Kiplinger.
Thursday, February 28, 2008
Saturday, February 23, 2008
Increase your finacial knowledge
Here are some financial websites frequently used by me for U.S. market (not in particular order) :
1) Yahoo (lots of information on stocks, banking, tax, mutual funds etc).
2) MSN - same as yahoo
3) Google (not so great but easy to use)
4) Businessweek
For trading:
1) Scottrade: - low price $7 for each trading, but you can not directly link with any bank account.
2) Sharebuilder: - $10/trade, link to bank account, buy stock using dollar cost averaging monthly plan
3) Etrade: - $6-$20, powerful, mostly useful for active traders.
Others:
http://www.thestreet.com/
http://www.fool.com/
http://www.stockpickr.com - this site gives you some nice details about what stocks big mutual funds, investors are buying. One interesting one is about Warren Buffett.
For India there are few websites but mostly loaded with flashy advertisements and pop ups:
Rediff
http://www.icicidirect.com
http://www.hdfcsec.com/
http://www.valueresearchonline.com/
http://www.kotaksecurities.com
http://www.sharekhan.com
Good comparison of Indian online trading on rediff.
Start learning. Enjoy!
1) Yahoo (lots of information on stocks, banking, tax, mutual funds etc).
2) MSN - same as yahoo
3) Google (not so great but easy to use)
4) Businessweek
For trading:
1) Scottrade: - low price $7 for each trading, but you can not directly link with any bank account.
2) Sharebuilder: - $10/trade, link to bank account, buy stock using dollar cost averaging monthly plan
3) Etrade: - $6-$20, powerful, mostly useful for active traders.
Others:
http://www.thestreet.com/
http://www.fool.com/
http://www.stockpickr.com - this site gives you some nice details about what stocks big mutual funds, investors are buying. One interesting one is about Warren Buffett.
For India there are few websites but mostly loaded with flashy advertisements and pop ups:
Rediff
http://www.icicidirect.com
http://www.hdfcsec.com/
http://www.valueresearchonline.com/
http://www.kotaksecurities.com
http://www.sharekhan.com
Good comparison of Indian online trading on rediff.
Start learning. Enjoy!
Wednesday, February 20, 2008
Rupee crosses 40
MUMBAI (Reuters) - The Indian rupee weakened beyond 40 to a dollar for the first time in five months on Wednesday, as oil refiners scrambled to buy dollars after crude prices hit record highs. "There was a dollar shortage in the market to begin with," said a senior currency trader with a private bank.
http://in.biz.yahoo.com/080220/137/6r3wq.html
Not a surprise for me.
I am not sure when 1 USD will be back 45+ INR as most Indian BPOs, exporters are holding dollars and will convert only when rates are good.
http://in.biz.yahoo.com/080220/137/6r3wq.html
Not a surprise for me.
I am not sure when 1 USD will be back 45+ INR as most Indian BPOs, exporters are holding dollars and will convert only when rates are good.
Saturday, February 16, 2008
Investing through ETF
Exchange-Traded Funds, or ETFs, are index funds that trade just like stocks on major stock exchanges. In simple way they are like mutual funds but more like stock. Most ETFs track well known index. ETFs are better than mutual funds because of following reason:
1) They trade like stock, hence you have tax advantage on capital gain & loss.
2) Most ETFs fees are less than 1% where as mutual funds fees are 2% and up
3) ETFs gives you more flexibility of trading.
Using ETFs investor can easily do asset allocation. They represent just about every asset class available and are cheap, liquid, and reliable. The primary asset classes in which ETFs are available include:
* Large Cap Stocks
* Mid Cap Stocks
* Small Cap Stocks
* Growth Stocks
* Value Stocks
* Sector Stocks
* International Stocks
* Country
* Emerging Market Stocks
* Long-term Bonds
* Mid-term Bonds
* Short-term Bonds
* Real Estate Investment Trusts
Some of popular ETFs from http://finance.yahoo.com/etf are:
Fund Name Ticker Category Fund Family Net Assets down Expense Ratio
1) SPDRs SPY Large Blend SPDR TRUST SERIES 1 84.85B 0.08%
This ETF tracks S&P 500 Index. Most of the large cap mutual funds tries to beat S&P 500.
2) iShares MSCI EAFE Index EFA Foreign Large Blend iShares Trust 47.47B 0.34%
3) iShares MSCI Emerging Markets Index EEM Diversified Emerging Mkts iShares Trust 23.19B 0.74%
4) PowerShares QQQ QQQQ Large Growth NASDAQ 100 TRUST SERIES 1 18.75B 0.20%
5) streetTRACKS Gold Shares GLD Specialty-Precious Metals streetTRACKS Gold Trust 18.74B N/A
This ETF tracks GOLD ! but beware gold prices are all time high and price can go either way.
1) They trade like stock, hence you have tax advantage on capital gain & loss.
2) Most ETFs fees are less than 1% where as mutual funds fees are 2% and up
3) ETFs gives you more flexibility of trading.
Using ETFs investor can easily do asset allocation. They represent just about every asset class available and are cheap, liquid, and reliable. The primary asset classes in which ETFs are available include:
* Large Cap Stocks
* Mid Cap Stocks
* Small Cap Stocks
* Growth Stocks
* Value Stocks
* Sector Stocks
* International Stocks
* Country
* Emerging Market Stocks
* Long-term Bonds
* Mid-term Bonds
* Short-term Bonds
* Real Estate Investment Trusts
Some of popular ETFs from http://finance.yahoo.com/etf are:
Fund Name Ticker Category Fund Family Net Assets down Expense Ratio
1) SPDRs SPY Large Blend SPDR TRUST SERIES 1 84.85B 0.08%
This ETF tracks S&P 500 Index. Most of the large cap mutual funds tries to beat S&P 500.
2) iShares MSCI EAFE Index EFA Foreign Large Blend iShares Trust 47.47B 0.34%
3) iShares MSCI Emerging Markets Index EEM Diversified Emerging Mkts iShares Trust 23.19B 0.74%
4) PowerShares QQQ QQQQ Large Growth NASDAQ 100 TRUST SERIES 1 18.75B 0.20%
5) streetTRACKS Gold Shares GLD Specialty-Precious Metals streetTRACKS Gold Trust 18.74B N/A
This ETF tracks GOLD ! but beware gold prices are all time high and price can go either way.
Thursday, February 14, 2008
Are you paying income tax on saving bank a/c ?
If you have interest income from saving, fixed deposit, cds etc it adds up in your income and you end up paying income tax on the interest paid by bank to you. For example if you earned $250 as bank interest in fixed deposit, $250 will add to income and you will normally end up paying both federal + state income tax.
How to avoid income tax on bank interest ?
1) If you have children under 18 you can open joint account with you kid as primary account holder. Any bank interest up to $800 is tax free.
2) if you can afford to wait for 5 years or more, put this money in Roth IRA .
so next time if you see saving bank rate of 4%, calculate your income tax too on it.
How to avoid income tax on bank interest ?
1) If you have children under 18 you can open joint account with you kid as primary account holder. Any bank interest up to $800 is tax free.
2) if you can afford to wait for 5 years or more, put this money in Roth IRA .
so next time if you see saving bank rate of 4%, calculate your income tax too on it.
Wednesday, February 13, 2008
Dollar vs Rupee
Last year US Dollar fell against major currencies including Indian Rupee. In year USD fell 10% from approx INR 44 to INR 39. What was main reason of this slide ?
From Yahoo news:
Foreign funds bought more than $17 billion of stocks last year, a key driver of the rupee's rise of more than 12 percent in 2007. But the funds have sold more than $3.5 billion so far this year as weak global markets heighten risk aversion.
Is this slide over ?
Now Indian stock market is flat and does not look attractive to most foreign buyers. Hence dollar flow to India will reduce for next few months. In last one month USD has gain 2% against INR and now looks like it has potential to cross INR 40 in few days.
Google Graph.
From Yahoo news:
Foreign funds bought more than $17 billion of stocks last year, a key driver of the rupee's rise of more than 12 percent in 2007. But the funds have sold more than $3.5 billion so far this year as weak global markets heighten risk aversion.
Is this slide over ?
Now Indian stock market is flat and does not look attractive to most foreign buyers. Hence dollar flow to India will reduce for next few months. In last one month USD has gain 2% against INR and now looks like it has potential to cross INR 40 in few days.
Google Graph.
Monday, February 11, 2008
Is it time to buy Indian stock ?
Indian stock market is down from its pick of Dec 2007. IMHO, it was overpriced market. Now market is slowly correcting and there may be good opportunity to buy stocks/mutual funds. There are 2 ways we can invest in indian stock markets from U.S.:
1) Buy ADRs, ETF, Mutual funds listed in US markets. Choices are few but this is simplest form of investing from USA. Three main players in mutual funds/etf are IIF, INP and IFN (compare). These funds invest only in indian stocks and benchmark againt Bombay sensex. There are only 15 or so ADRs of Indian companies. Main players are Infosys, Wipro, Satyam, ICICI Bank etc:
1) Buy ADRs, ETF, Mutual funds listed in US markets. Choices are few but this is simplest form of investing from USA. Three main players in mutual funds/etf are IIF, INP and IFN (compare). These funds invest only in indian stocks and benchmark againt Bombay sensex. There are only 15 or so ADRs of Indian companies. Main players are Infosys, Wipro, Satyam, ICICI Bank etc:
- Infosys Technologies Limited (ADR) INFY
- HDFC Bank Limited (ADR) HDB
- ICICI Bank Limited (ADR) IBN
- Mahanagar Telephone Nigam Limited (ADR) MTE
- Patni Computer Systems Limited (ADR) PTI
- Rediff.com India Limited (ADR) REDF
- Satyam Computer (ADR) SAY
- Sify Technologies Limited SIFY
- Tata Motors Limited (ADR) TTM
- Videsh Sanchar Nigam Limited (ADR) VSL
- Wipro Limited (ADR) WIT
- Dr. Reddy's Laboratories Limited (ADR) RDY
- Sterlite Industries India Limited (ADR) SLT
Sunday, February 10, 2008
Some not so common tax deductions
Job related expenses:
1) Books, magazine subscriptions related to job
2) equipment and tools required by jobs
3) tuition and study related expenses
4) job search expenses
5) laundry, uniform expenses
Job expenses more than 2% of income are deductible.
Investment expenses:
Scenario: you earned $1500/year from passive income like bank interest, stocks, bonds, dividends etc.you can deduct some expenses related to above income, for example:
1) Investment advisory fees
2) Deprecation of equipments like computer, blackberry etc to manage your portfolio
3) investment publications including magazine subscriptions
4) Telephone, copying and postage fees
5) Interest expenses to maintain your portfolio.
Miscellaneous expenses should be more than 2% of income and generally can not be more than passive income.
1) Books, magazine subscriptions related to job
2) equipment and tools required by jobs
3) tuition and study related expenses
4) job search expenses
5) laundry, uniform expenses
Job expenses more than 2% of income are deductible.
Investment expenses:
Scenario: you earned $1500/year from passive income like bank interest, stocks, bonds, dividends etc.you can deduct some expenses related to above income, for example:
1) Investment advisory fees
2) Deprecation of equipments like computer, blackberry etc to manage your portfolio
3) investment publications including magazine subscriptions
4) Telephone, copying and postage fees
5) Interest expenses to maintain your portfolio.
Miscellaneous expenses should be more than 2% of income and generally can not be more than passive income.
Friday, February 08, 2008
Tax Rebates Check
Finally both house and senate passed the tax rebate check bill. So when will check arrive and how much will we get ? Here is summary:
1) Single taxpayers will get $600
2) Married persons will get $1200 + $300 per child :)
The tax filing status will be based on 2007 tax returns, which are due April 15, 2008. As per press these checks will arrive in May. Start planning :)
1) Single taxpayers will get $600
2) Married persons will get $1200 + $300 per child :)
The tax filing status will be based on 2007 tax returns, which are due April 15, 2008. As per press these checks will arrive in May. Start planning :)
Wednesday, February 06, 2008
Tax filing date
I was in hurry to file tax as I am in need of money. However, when I filed today TurboTax finally says that IRS will start processing tax from Feb 11, 2008. So I am 5 days early and I have to wait another 9-15 days to get refund. Lesson learned, never rush for filing tax. I think best time to file tax when you are expecting BIG refund is by Mar 1st. Also, when you have to pay tax than best date is April 14 and send it by slow postal mail.
Monday, February 04, 2008
Tax tips
Some tax tips I have learn so far:
1) Deduct maximum in your 401K. My range is minimum 6% and maximum of $15500.
2) If your company do not offer 401K, contribute to Traditional IRA.
3) For 401K/Traditional IRA, do most of your contribution in 25% tax bracket and plan to withdraw in 15% tax bracket.
4) Do not e-file if your refund is less than $500. Simply print and send.
5) And if you have refund of more than $1000, you are giving free interest money to federal. In this case, change your w-4 and reduce your monthly tax.
6) Contribute to Roth IRA. It is good for short-term stock trading :)
7) Contribute to traditional IRA if your wife is not working.
8) You can buy properties in India using self-directed IRA :)
9) When you move to India rollover all of your 401(k), IRAs into either self-directed IRA or one low cost IRA provider. You should not withdraw all money at once, but plan to withdraw over period of few years so that you pay taxes in lower tax brackets.
1) Deduct maximum in your 401K. My range is minimum 6% and maximum of $15500.
2) If your company do not offer 401K, contribute to Traditional IRA.
3) For 401K/Traditional IRA, do most of your contribution in 25% tax bracket and plan to withdraw in 15% tax bracket.
4) Do not e-file if your refund is less than $500. Simply print and send.
5) And if you have refund of more than $1000, you are giving free interest money to federal. In this case, change your w-4 and reduce your monthly tax.
6) Contribute to Roth IRA. It is good for short-term stock trading :)
7) Contribute to traditional IRA if your wife is not working.
8) You can buy properties in India using self-directed IRA :)
9) When you move to India rollover all of your 401(k), IRAs into either self-directed IRA or one low cost IRA provider. You should not withdraw all money at once, but plan to withdraw over period of few years so that you pay taxes in lower tax brackets.
Sunday, February 03, 2008
Tax time
Another tax year and again hassles of filing taxes. This year is more complex for me because, I purchased home and sold stocks in ESPP. While calculating tax on mortgage interest on home loan is straight forward, it is ESPP stock which is causing headache. I sold my ESPP stocks before 2 years of "lock-in" period, hence 15% discount on stock price will add to my taxable income. Not a bad deal as stock price where up by 40%. I bought TurboTax Deluxe edition from BestBuy for $39.99 but TurboTax itself is asking me to upgrade to Premier version of $79.99 because of ESPP. After reading few articles on internet I am able to calculate ESPP tax myself.
One more thing, I am doing tax myself over past 7 years using TurboTax and used CPA once. I found doing taxes yourself is better than CPA or H&R. In both way you are responsible to give all paperworks and personal information about your finances. Once CPA take your tax papers and fees they will disappear and you have to chase them to get answers on your tax. Doing tax myself has given me more knowledge and tax saving ideas.
One more thing, I am doing tax myself over past 7 years using TurboTax and used CPA once. I found doing taxes yourself is better than CPA or H&R. In both way you are responsible to give all paperworks and personal information about your finances. Once CPA take your tax papers and fees they will disappear and you have to chase them to get answers on your tax. Doing tax myself has given me more knowledge and tax saving ideas.
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