How to handle this situation ... need advice


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sonusonu8080   
Member since: Apr 08
Posts: 2
Location:

Post ID: #PID Posted on: 10-04-08 02:15:10

Hello! Everyone,

I badly need your expert guidance and advice as I am in real puzzling situation.

Situation is like this, I have all my earning in stock market and the market is giving me loss of about 20%. I have to land for first time and I need to show settlement fund at the time of landing.

My investment are in sugar sector and these stocks makes nearly 80% of investment.

(1) Bajaj Hindustan --- 50%
(2) Balrampur sugar mills --- 20%
(3) Infosys --- 10%
(4) Others -- 20% i don't mind if i leave them for long period.


I am getting approved loan of same amount for 4 yrs at 22% interest rate and monthly I have to pay nearly Cn $ 477.

Now I am puzzle what to do as market may go up any time, everything is online I mean I can access my demat account as well as saving account. I using icicidirect.com and iccibank.com services.

How easy is to earn and save $ 477 per month for EMI while doing Temp jobs. Also I have some spare money which I can keep in account for one year EMI before leaving.

In this situation what you people suggest me to do? Shall I book loss or go for loan.

Thanks in advance.

Sonu



Krazzyfour   
Member since: Apr 08
Posts: 185
Location:

Post ID: #PID Posted on: 10-04-08 07:09:47

Hi Sonu,

It is very difficult to suggest in the absence of complete details. However Stock market jittery over inflation.

The Bombay Stock Exchange benchmark Sensex shed 6.28% in the opening week of the new fiscal as rising inflation and a new accounting norm made investors jittery amid continued fears of a US recession.

Reports that the Institute of Chartered Accountants of India has asked companies to disclose and/or provide for all losses on derivative contracts from the current financial year led to fears that fourth quarter earnings of companies will be adversely affected.

The inflation too remain a cause of concern at a time when domestic industry was under pressure due to high prices. Consistent rise in inflation to 7% has raised possibility that the government will intervene with tight monetary measures.

The Reserve Bank may raise the Cash Reserve Ratio (CRR) to rein in inflation. An increase in CRR would suck out liquidity in banking system and result in a rise in cost of funds and reduction in demand. It is surprising and contrary to note while interest rate are going down world over and US govt pumping billions of dollar to increase the liquidity in US market due to the recession in economy.
This does not speak good for Indian companies and economy as reduction in demand and increase in borrowing will make Indian companies difficult to compete in world and this would lead to further slide in the stock market atleast in the short term.

Now coming back to your questions, should loss be booked or go for loan and second how easy or difficult to remit cad$477 if loan is availed.

Assuming if your investments are all in blue chip companies and a good mix of couple of sectors, it would be better to hold on. If the investment in not good companies it is always better to book loss and exit. In boom time all cats and dogs starts climbing so one should be very careful in investing. The best way is to enter fast and quit fast.

As regards CAD$477, if you are coming alone it would not be very difficult to spare that much money as you can live in shared accomodation and even do odd jobs for 7 days and can save money.

Finally it should be your decision to decide.

All the best!



sonusonu8080   
Member since: Apr 08
Posts: 2
Location:

Post ID: #PID Posted on: 10-04-08 07:29:09

Dear Krazzyfour Thanks! for replying me back so soon.

My investment are in sugar sector and these stocks makes nearly 80% of investment.

(1) Bajaj Hindustan --- 50%
(2) Balrampur sugar mills --- 20%
(3) Infosys --- 10%
(4) Others -- 20% i don't mind if i leave them for long period.

I am not coming alone, my wife is also joining me and she has positive thinker and by profession she is nurse.

I am ready to do any sort of job, but i am good in computers and i know how to make websites.

We have friend who has offered his basement and we have to pay nominal amount of rent if we want. So rent is no problem for us.

Hope with this you can throw some light and suggest more.



sudesingh   
Member since: Jul 04
Posts: 2085
Location: Toronto

Post ID: #PID Posted on: 10-04-08 12:25:59

Quote:
Originally posted by sonusonu8080
I am not coming alone, my wife is also joining me and she has positive thinker and by profession she is nurse.

I am ready to do any sort of job, but i am good in computers and i know how to make websites.

We have friend who has offered his basement and we have to pay nominal amount of rent if we want. So rent is no problem for us.

Hope with this you can throw some light and suggest more.



While you have all the motivation and determination to work 7 days and make some savings, you have to practical also. You mentioned your wife is a nurse, she has to requalify to start working. That will not be easy. Chances are she may land up doing some odd jobs. Just keep these little things in mind. It's good to be positive but you have also to be prepared for the worst.

There are quite a few post within the charcha which talk about cost of living. Suggest you go thru them and get a ball-park figure of the amount you need to earn to make a decent living and pay your taxes & loan.

Another thing that comes to mind is how much do you think the market will rise so that you recover your 20% loss and maybe make some profit. I know we're talking about the stock market and prediction is not easy. Now you have to compare that to the interest you're paying on a monthly basis, and for how long do you expect to pay that.


-----------------------------------------------------------------
SS
Reiki Grand Master


viggy   
Member since: Aug 07
Posts: 569
Location:

Post ID: #PID Posted on: 10-04-08 12:37:02

I agree with SS. With the rising prices and inflation, interest rate and CRR adjustment can happen, which will only adversly affect the stock market. With elections coming up, chances of shares rising 20% in the next year is dim - still it is shares, so anything can happen.

Loan at 22% is a rip off - who is giving you loan at this rate? I thought only Credit cards had this kind of rates and the ICICI rate was much less and renewed on an annual basis.



Krazzyfour   
Member since: Apr 08
Posts: 185
Location:

Post ID: #PID Posted on: 10-04-08 20:42:01

Hi Sonu,

No one has been able to predict about the future accruately and never about the stocks. Though the chances of an immediate rise may be very less at the same time I strongly feel If you have investment in good blue chip companies better to hold on to those investments as the chances of going down further and resulting in erosion of capital are equally less from here.

It is good that you have family and would be coming with family. If both of you work even for 5 days on any kind of odd job you will be able to return loan much faster than paying minimum.

If you and your wife have reasonably good command over English and workable knowledge of computers, You both should be able to land in good jobs without having to spend / waste money to acquire canadian qualification/certification.

After coming to Canada, Your objective should be debt free asap. After that only you should decide about investing money on certification or education in Canada.

Wish you all the very best and Good luck!









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