Saturday, October 18, 2008

India Rising!

Recently a friend of mine forwarded me this video recorded by PBS and termed "India Rising". You can view the video at PBS's website.

The video's main focus is a town Pune, a growing educational town situated 100 miles east of the main metropolitan of Mumbai in Western India.

India's GDP is on its boom in the last few years, recording 9.1% growth in the 2007-08 timeframe according to wikipedia.

The middle class can now afford a lot of commodity items that were taken as granted by rest of the world.

Indians now are shopping in malls for microwaves or refrigerators and also buying condos and driving comfortable automobiles.

To me the above change has already been in place for a few years, but its only recently that its started making news in mainstream America.

Express India's rising food prices article gives the views of President Bush on the same.

What do these economic needs of China and India mean to the rest of the world? There is only so much in the world and one argument is "Should we not share what we have?" Is this the price the rest of the world will have to pay when The World Is Flat?

One positive outcome as depicted in the video is that it encourages innovation by the rise in competition.


Thursday, October 9, 2008

Dollar cost averaging - Another view


In my earlier post about dollar cost averaging or long term investing during down markets I had written how it was beneficial to dollar cost average during a bear market.
This morning I was looking at another article on Investor Business Daily's newspaper. They had a small article on dollar cost averaging specifically for down markets or during markets with bearish trend. This article featured under their Myth Buster title titling "Averaging down can be a poison". The author takes an example of Lehman brother's stock and how one would have suffered major losses in such a condition and instead ask to dollar cost average in bullish markets.

My takes on this and comments are slightly different. My focus would be to dollar cost average on an index vs. a stock. Thus if any particular stock is burned then my risk of loosing all my money is certainly lessened.

The article took an example of AIG and explained how an investor would take ages to get back the fortune spent. I would have rather put money in the finance sector, probably in an ETF or a mutual fund.

Of-course buying during market correction is a better strategy but then who can identify a bottom and then a correction.

One strategy recommended which I might partially agree is too sell off if losses get steeper than 7-10%.

What do you think?