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The Attractive India property is able for investment

Saturday, January 23rd, 2010

The attractive India real state has always been a center of investments, so someone said about it, ‘India property always have a capacity for good investments. Its affordable housing plans and other commercial based projects attracts the investors; also provide the best facility and opportunities for investors, who are interest to invest here.

The attractive property investment opportunity:

There are no doubts that the attractive property investment opportunity provides for investors by the India real estate. It is also very clear that India real estate offers very impressive property investments for any one who want in making real good money. During the consistence appreciation of properties in our country for many years now, barring the current slum, in the wake of the global economic melted down and Indian economy was become temporary effected by downfall. But after some times properties indulge to maintain their condition for upcoming time, and now the individuals and institutional investors have seen to evince keen interest to real estate properties in India.

As the slum has due to the stagnation in the market, a lot of prime properties are finding as much less prices rather than they would be available after few years.

If another side we saw, we find the investment based real estate offer of attractive property in India, among many investment options such as stocks shares have not able to fulfill their promise in the context of fluctuating sense and volatile market conditions. Only on real estate have a capacity to increase or decrease the volatile market.

Although it is another aspect which can attracts confidence in the mind of real estate investors in India.

Presently, due to the new scenario, new market equations are emerging because of influence of sector specific and macro economic factors.

The attractive investments factors:

Why India property are able for investments? The answers are given by two most factors –residential based and commercial based, it means the power of India’s residential and commercial properties are so high, attractive and charming that investor impressed himself and get ready to invest here. The another reasons are also given below—

The primary reasons of property investment in India are growing significance of commercial and residential region.
India’s sub consistence market is one rather than another market of the international level.
Its strategic locations, huge population and wide consumer based country make its able for more investments.
Its affordable housing and commercial apartments makes investors more profitable rather than other countries investments.

So India properties are totally able for investments because it returns high profit during investments for investor in comparing of any other country.

Shailendra Singh offers services in real estate marketing, property management, portfolio reporting, financial services and premium offshore services to the visitors world-wide.
Log on InvestInNest.com and search best Property in India.

Article Source:http://www.articlesbase.com/investing-articles/the-attractive-india-property-is-able-for-investment-1770182.html

Tags: attractive investments, india property, india real estate, property in india, volatile market conditions
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Pitfalls of leveraged ETFs

Monday, September 14th, 2009

Leveraged ETFs are often considered as the ultimate investment vehicles in volatile market conditions. Investors who want to hedge their stock portfolio may buy a double short of Dow Jones Financial Index <IYF> or of S&P 500 <SDS> expecting to make daily investment returns of 200% the inverse of the daily performance of the index. Hence, for 1 percent decline of the market, they expect to make a profit of 2 percent.

Exchanged Traded Funds (ETFs) seek for investment returns that are twice the returns of the underlying index for a single day. This explains their efficiency as investment vehicles on a short-term horizon. However, trying to maintain a constant leverage ratio in a portfolio by trading leveraged ETFs on a long-term horizon may result in the portfolio selling off its assets in the worst of timing.

One of the major misapprehensions is that leveraged ETFs are suitable for long-term investment. The answer is a resounding ‘no’, especially in volatile markets. Leveraged ETFs do not offer twice the annual returns of the underlying index. They only double the daily returns of the index. Although, if used properly, they allow investors and hedge funds the opportunity to hedge, the truth of the matter is that the losses of the leveraged fund are 4x the losses of the index on a two-day sessions.

If the market increases by 10 percent in one trading session and declines by 10 percent in the next trading session, the losses of the leveraged fund are 4 percent and not 2 percent. This happens because, as leveraged ETFs are always calculated as a double short of the underlying index, their losses are also calculated based on the same logic. However, after calculating losses, the difference from 1 is greater for the leveraged fund than for the underlying index. Therefore, if the underlying index has losses equal to 1 percent [(1+10%) x (1-10%) = 0.99, that is 1-0.99 = 0.01], the leveraged fund has losses equal to 4 percent [(1+20%) x (1-20%) = 0.96, that is 1-0.96 = 0.04]. The mechanics of the daily recalculation of the leveraged ETFs ultimately leads to a substantial deviation of their returns from the underlying index, which makes them unsuitable for long-term investment.

Investors rebalance their leveraged ETFs by taking the opposite position of the direction of the market. When the index goes up, they reduce the leverage ratio. When the index falls, they increase the leverage ratio to capture the index upturn. However, leveraged ETFs are, by default, designed to maintain a constant leverage ratio. At the opening of the trading session, the leveraged fund maintains equal proportions of debt and equity in the portfolio. If after the trading day, the market has gone up, the fund tends to buy additional shares. Conversely, if the market has declined, the fund tends to sell shares. This is called the Constant Leverage Trap. In effect, leveraged ETFs buy high and sell low to maintain a constant leverage ratio and this has a major impact on the volatility of the underlying index. Eventually, it can lead to major sell-offs in bear markets that may impossible to recover from in the next bull market like it happened in the recession of 2000 – 2002.

Commodity markets are difficult sectors to trade in mainly due to a higher leverage than most investors feel secure with. The introduction of leveraged ETF products has offered investors the opportunity to earn more on index-based securities. However, as these markets are extremely volatile, leveraged ETFs should be used systematically by experienced investors over short periods of time.

(ArticlesBase ID #1230776)

I work as a financial and investment advisor but my passion is writing, music and photography. Writing mostly about finance, business and music, being an amateur photographer and a professional dj, I am inspired from life.

Being a strong advocate of simplicity in life, I love my family, my partner and all the people that have stood by me with or without knowing. And I hope that someday, human nature will cease to be greedy and demanding realizing that the more we have the more we want and the more we satisfy our needs the more needs we create. And this is so needless after all.

Article Source:http://www.articlesbase.com/investing-articles/pitfalls-of-leveraged-etfs-1230776.html

Tags: leverage ratio, leveraged etfs, long term investment, market increases, volatile market conditions
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