Earth Day on April 22

Each year, people from all around the world celebrate Earth Day on April 22. Festivals, demonstrations, and other activities are planned in cities everywhere to bring awareness to the earth’s rapidly depleting resources. Read on for 15 facts about Earth Day and things you can do to protect the environment.

#1

More than 20 million people participated in the first Earth Day on April 22, 1970. Senator Gaylord Nelson founded the holiday. The eco-friendly day began in the United States and became accepted globally in 1990.

#2

In 2009, the United Nations renamed the holiday International Mother Earth Day.

#3

More than one billion people from around the world are expected to participate in Earth Day events this year.

#4

Albert Einstein was a very forward thinker. He was awarded a Nobel Prize in 1931 for his endeavors in solar and photovoltaic experimentation.

#5

Recycling one aluminum can will save energy that’s equal to having the TV on for three hours.

#6

If all newspapers were recycled, 250 million trees would be saved. For each ton of paper recycled, 17 trees are saved. Americans throw away 600 pounds of paper each year.

#7

If you turn off the faucet while brushing your teeth, you will save four gallons of water every day. On average, water flows through a faucet at a rate of two gallons per minute.

#8

It costs about 50 cents per year to drink eight glasses of water each day from the faucet. If you drink your water primarily from water bottles, then it can cost you as much as $1,400.00 annually.

#9

Only about 27 percent of water bottles get recycled. The bottles that don’t get recycled can take thousands of years to decompose.

#10

For each ton of plastic that gets recycled, up to 2,000 gallons of gasoline are saved.

#11

Reducing your shower time by five minutes will save 10 to 25 gallons of water.

#12

It takes about 100 gallons of water to make one gallon of milk.

#13

It takes approximately 634 gallons of water to produce one hamburger.

#14

You can recycle 84 percent of household waste.

#15

If the whole world used resources as much as Americans do, four more planets would be needed for resources.

Earth Day certainly brings an increased level of awareness each April, but the environment should be recognized every day of the year. With resources dwindling, you can help protect the planet by considering these facts as you go about your daily routine.

Should you be a growth investor or a dividend investor?

Should you be a growth investor or a dividend investor? The former focuses on prospective investments with high earnings growth potential, but lays little focus on dividends. The latter looks for cash cows that would generate stable dividend receipts. But what if you can have the best of both the approaches? Yes, we are referring to dividend growth investing, which is like eating the cake and keeping it too. If you were to look at Warren Buffett's investment track record, you would find many investments that fit into this category. In fact, an article in seekingalpha.com points out some insightful data from the current Berkshire Hathaway portfolio. Of the 43 publicly owned companies in the portfolio, 32 companies pay dividends. It is worth noting that over three-fourth of the total portfolio value is accounted by the top 8 companies. And all of these are dividend payers.

What is the secret behind dividend growth companies? These are typically businesses that have strong long term growth potential and are cash generating machines. In other words, the incremental capital required to grow these businesses is minimal. So if you want to be a successful dividend growth investor, zero down stocks that have these basic characteristics and buy them when they're available at a bargain price.   

Importance of CIBIL score and Credit Information Report (CIR)

A good credit score is one of the most important eligibility criteria based on which a bank gives you a loan. Your credit score, which the Banks check through CIBIL, is a precise indicator of your credit history which reflects factors like: -

• Record of late payments and defaults.
• Loans and credit cards that you currently hold.
• Diligence towards paying loans and credit card bills.
• Number of loan and credit card applications submitted by you.

Diligence towards repayment and having secured loans like home or auto loans works positively for your CIBIL score. On the other hand, payment defaults and too many loan or credit card applications can have a negative impact on your CIBIL score.
A good CIBIL score helps banks to determine your credit-worthiness and approve loans and credit card applications faster.

 What is CIBIL?
Established as the Credit Information Bureau (INDIA) Limited or CIBIL in August 2000, CIBIL is India’s first Credit Information Company (CIC) and is the central recorder of the credit information of all the borrowers. CIBIL collects and maintains all the record of each particular individual regarding the loans and credit cards and provides the same information to all other financial institutions, so that the banks can be aware of your credit history before approving your loan.
This information is provided to CIBIL by the member banks and finance houses. Every time you borrow a loan or avail a credit card, your credit and repayment information is collected and submitted by the member bank to CIBIL on a monthly basis. This information is collected and recorded to create a Credit Information Report (CIR), which is in turn shared with all the other banks and financial institutions.
The next time you walk into a bank to apply for a loan, your CIR is first verified by the bank, to prevent the bank from providing a bad loan or lending money to borrowers who may not be credit worthy.
Thus, the CIR is your credit score sheet, which the bank verifies before approving your application. CIBIL has played an important role in the Indian financial system, providing efficient information and preventing a bad situation.

How does it work?
To approve you a loan, the credit lending organization must gather your credit score and repayment history, which may be spread over at various institutions. CIBIL collects and organizes your data and provides the same to all the banks and financial institutions, which by default are members with CIBIL. The bank uses this collective credit history to determine whether your application should be approved. It helps the bank to function efficiently and in an economical way.
Thus a CIR is a factual report which provides an idea on your credit and payments history. Every time a lender seeks a CIR of an individual from CIBIL, a unique nine digit control number is generated which the CIBIL uses to track an individual’s report from its database. A new control number is generated every time a request is made.

Can you check your CIR?
Every individual has the right to obtain his/her respective Credit Information Report (CIR). It is through this that you can determine your credit scores and standings. CIBIL does not mark you or any individual as a defaulter, but it is just mentions a particular score on your CIR. It is entirely dependent on the respective bank to determine who it considers a defaulter. The CIR credit score or the Trans Union score ranges from 300-900.
You can access a copy of your CIR by applying over the CIBIL website. You can make the payment online as well. You can find out more details at www.cibil.com.
Documents to be required in the process:

• A CIR request form
• Identity Proof of the requestor (Voters ID/PAN card/DL/Passport)
•  Address Proof (Electricity bills/Passport/Bank statements)
• In case you have cleared off your debts but your CIR has not been updated with CIBIL, all you need to do is to:
• Log on to the CIBIL website. https://www.cibil.com/
• Purchase your CIBIL credit report.
• Identify the error.

Get in touch with CIBIL through the Online Dispute Form to get the error corrected.


Be advised that CIBIL needs the Control Number of a CIR when you are raising a Dispute Resolution request so that it can review your report and make the necessary amendments.

why bank fixed deposits alone won't make you rich

There is no doubt that bank fixed deposits (FDs) are safe in that you will always get your money back. But did you know that bank FDs can negatively affect your savings over the long term? (see the shocking graph at the end)
#1: FDs give returns below inflation
The average inflation rate in India for the last 2 years (2012-2014) is 9.76%. Most FDs only give you about 8.5% interest. This means, you are effectively losing money every year you invest your money in an FD.
#2: FDs are taxable, which further reduces the net amount you earn
Compared with equity mutual funds, long term returns from which are tax free, FD interest is taxable at your current tax slab. The higher your income, the lower your FD return will be.
That raises a question- “if bank fixed deposits are not a good way of allocating all my savings, how else should I invest my money?”
Invest in the top equity mutual funds! See the graph below for FD vs mutual fund comparison.

Why RBI will continue to remain a hawk

After RBI's status quo move, where the bank left key rates unchanged, there was a slight disappointment across the street. With inflation cooling down and growth slowing, many expected RBI to adopt a dovish stance. However, RBI governor continued to remain hawkish as he stressed on factors that could potentially derail the declining trend in inflation.

A hawkish stance means that RBI will not lower interest rates in the near to medium term unless inflation settles down within its comfort zone. While the Consumer Price Index (CPI) inflation may have declined to 8.1% for the month of February from 11.8% a year ago, core inflation has hovered around 8%. And this indicates that inflationary trends in the economy have failed to subside. Core inflation excludes the impact of food and fuel inflation, which happen to be most volatile. Thus, it is an indicator of underlying long term inflation.

Apart from core inflation, even food inflation which has subsided for the time being, is likely to rear its ugly head again. The fears of El-Nino are getting stronger by the day. Concerns over scanty rainfall have also emanated recently. This is likely to raise food prices. Higher farm gate prices are not helping either.

When it comes to fuel inflation, the situation is slightly better. Appreciating rupee has made imports cheaper. As a result, petrol prices were cut recently while the decision to hike diesel prices was postponed. However, international crude prices being highly volatile and India being a net importer of crude, threat of rising fuel inflation can never be overcome completely.

Further, if the new government clears the decision on gas price hike, it shall pose further upside risk to inflation. A gradual reduction in complex fertilizer subsidies, in fact any subsidy for that matter, is also a threat to inflation. Take the case of reduction in fertilizer subsidy on inflation. As subsides reduce, fertilizer companies increase the end product price, which burdens the farmer and ultimately the end consumer in the form of higher food inflation. As India is slowly moving out of the subsidy era, inflationary threats continue to remain.

Higher inflationary environment in general means interest rates are likely to remain high. Thus, RBI is likely to remain more hawkish than dovish in the near to medium term.

What does this mean for the economy?

Higher interest rates deter capex cycle. They slow down investments and hurt growth. And with RBI having prioritized inflation over growth, interest rates may remain high. Thus, growth may continue to take a backseat.

However, it should be noted that interest rate is just one of the factors that impacts investment cycle. Other factors like better policy making and reduced bureaucracy also matter. And it is the government which is responsible for managing them. If the government improves policy making and ease of doing business, then the interest rate hindrance can be easily overcome. This shall kick start the growth cycle.  

How have Indian markets fared in the UPA regime?

he UPA government has been in power over the last decade in India. During its term, we have had a series of scams and corruption scandals. In short, we had a decade of mis-rule and poor governance. Reforms took a backseat and growth suffered. And this is reflected in the stock market returns as well. As can be seen in today's chart, the annual MSCI index return of Indian stock markets was 11% amongst the BRICS nations during the last decade where UPA was in power. Only Russia fared poorly with return of 7.5%. All the other BRICS counterparts had returns better than that of India.

Considering that India was one of the fastest growing emerging markets, one would have expected it outperform other markets. However, as highlighted earlier policy deadlock and delays in decision making hurt the business prospects. This affected the earnings profile of major corporations, especially in the infrastructure and engineering space. As a result, the market returns were capped.

For Indian markets to outperform over the next decade, we need a stable government with clear policy stance which improves the ease of doing business. This shall revive the capex cycle and put India back on growth track. Ultimately, the stock market returns would follow.

How have Indian markets fared amongst BRICS in UPA regime?

^SA = South Africa