Hackers who hit JPMorgan attacked some 9 other firms - report

REUTERS - About nine other banks and brokerages were infiltrated by the same group of hackers who recently attacked computer systems at JPMorgan Chase & Co, the New York Times reported late on Friday, citing unnamed people briefed on the matter.

The report, which could not be independently verified and did not identify any of the victims beyond JPMorgan, said it was not clear how serious the attacks had been.

JPMorgan said on Thursday that names and contact information for some 83 million household and small business customers were stolen, making it one of the biggest data breaches in history.

The New York Times said the breadth of the attacks and uncertainty about the motives of the hackers are troubling U.S. policymakers and intelligence officials.

Representatives with the U.S. Secret Service could not be reached for comment on Saturday morning. The Secret Service is investigating the attack on JPMorgan.

FPIs seen to remain bullish on India market

Foreign portfolio investors (FPIs) are expected to continue to pump in funds in the Indian equities market, as upbeat sentiment like weak global gold and oil prices and the upcoming quarterly results season makes it attractive.

"The FIIs will be watching the quarterly results closely. Plus the money flow is expected to continue as the Indian economy remains attractive," Sanjeev Zarbade, vice president- private client group research, Kotak Securities told IANS.

However, the FPIs had become net sellers in the equities market this week due to negative global cues such as slow growth in Europe and Chinese economy and Reserve Bank of India's (RBI) decision to maintain key interest rates in its bi-monthly monetary policy.

The foreign institutional investors (FIIs) along with sub-accounts and qualified foreign investors have been clubbed together by market regulator Securities and Exchange Board of India (SEBI) to create a new investor category called FPIs.

FPIs massively sold stocks worth Rs.653.95 crore or $105.29 million, according to data with the National Securities Depository Limited (NSDL).

For the week ended Sep 26, the FPIs had sold stocks worth Rs.2,487.02 crore and had only bought shares worth $75.40 million or Rs.458.34 crore.

Davendra Nevgi, chief executive, ZyFin Advisors who told IANS that due to weak global cues markets will watch developments like price drops in gold and oil keenly, this in turn will make the Indian markets more attractive.

Apart from low oil and gold prices positive global cues like the recent euphoria in the US market due to the strong employment numbers is also expected to have healthy impact on the market.

The U.S. Labor Department this week reported that the economy created 248,000 jobs last month, its strongest performance since pre-financial crises days.

Crude oil prices continued to decline after Saudi Arabia's state-run oil company cut prices.

Gold prices too dropped significantly to be sold below $1,200 an ounce for the first time this year.

The Indian equities markets had posted marginal losses in the current truncated week as profit booking led to volatile trade.

The benchmark Sensex was marginally down by 0.21 percent in the week ended Oct 1 from its previous weekly close on Sep 26. The index closed at 26,567.99 points, while it had ended trade at 26,626.32 points on Sep 26.

In the previous week the 30-scrip Sensitive Index had lost 1.71 percent in the week ended Sep 26 from its previous weekly close on Sep 19. The index closed at 26,626.32 points, while it had ended trade at 27,090.42 points on Sep 19.

Modi inspires investor confidence in US visit, $42 bn committed

Prime Minister Narendra Modi's "extremely successful" US visit, especially his meeting with top business leaders there, has seen a US-India business body committing to $42 billion investment in India with many lauding the "Gujarat model" of development.

In a survey following Modi's five-day visit, the US-India Business Council (USIBC), in a survey, found that $42 billion was willing to be committed over the next two-three years for investment by just 20 percent of the members surveyed, said government sources Saturday.

If the rest of the USIBC members and the top US businesses had been surveyed, the figure would have exceeded $100 billion, the official added.

There was a "very positive" investor sentiment among the businesspersons in the US "based on the experience in Gujarat", said the source.

What added to the investor confidence was Prime Minister Modi being very conversant with the "nuts and bolts" of business during his interactions with the top CEOs of global firms like Google, Boeing, Black Rock and Pepsico.

Modi's position as being the head of a majority government, without being hobbled by the pulls and pressures of allies, also added to the confidence levels.

The prime minister conveyed with great clarity on assurances of his government of removing red tape and of making the business environment easy, which also helped, the sources added.

The US business leaders did raise the issue of taxes and the issue of "ease of doing business" in India repeatedly, said the official source.

But following talks with the prime minister, the US businesspersons were "all very positively inclined and committed to raising the investment portfolio in India", the source added.

This is a major initiative for increasing FDI and FII flows from US, the leading source of FDI and FII in the world, to India.

The Indo-US Investment Initiative is to be led by the India's finance ministryand the US Department of Treasury. It is to focus on raising investment by institutional investors and corporate entities primarily by facilitating individual investment proposals and projects.

Under the initiative, the finance ministry will set up a single-point problem resolution and facilitation arrangement for ensuring that prospective investments do not face unnecessary hurdles and actually materialize. It will have a particular focus on capital market development and financing of infrastructure.

An Infrastructure Collaboration Platform is also being set up between the finance ministry and the US Department of Commerce to enhance participation of US companies in infrastructure projects in India.

Among the list of Modi's one-on-one meetings on Sep 29 were: W. James (Jim) McNerney, chairman of Boeing, Laurence D. Fink, CEO of American multinational investment management firm Black Rock; Ginni Rometty, president and CEO of IBM; Jeffrey R. Immelt. chairman and CEO of General Electric; ALloyd Blankfein, chairman and CEO of Goldman Sachs and Henry Kravis, CEO of American private equity fund Kohlberg Kravis Roberts and Co. (KKR).

During the breakfast meeting he interacted with 11 leading individual CEOs, including Google's Eric Schmidt, David M. Rubenstein of The Carlyle Group, Michael Corbat, CEO of Citigroup, Doug Oberhelman of Caterpillar Inc, AIndra Nooyi of Pepsico and AMicheal Ball of Hospira Inc. a U.S.-based global pharmaceutical company and Kenneth C. Frazier of Merck and Co.

Financial planning: What are common mistakes to avoid

Financial planning is a detailed process of understanding one’s financial status and milestones and then coming out with a comprehensive solution. However more often than not, financial planning is looked at more from a quick fix solution. I often come across people asking me which product I should invest in. The question is not about where to invest, but why to invest, which will decide your asset allocation. However the habit of jumping to fast solutions sometimes end up having adverse consequences. The common mistakes which I have come across while people plan their finances are as under:-

1) Current status and Way ahead:-
Financial planning can often be compared to a long distance travel. The first thing we do when we plan our travel is understand which places we want to go to. Then we decide on the affordability of the same. Then we decide on the mode of transport, whether the travel has to be completed by plane, bus, train etc. Then finally we buy the ticket and get our travel plans implemented. Similarly in financial planning; the first step should be to understand where I want to go, as in to decide your goals or milestones to be achieved. The second step should be to understand your current financial position which is your assets, liabilities, cash flows, taxation etc. to exactly know where you stand as of today. The third step should be to choose the asset class and products if required to reach the goal. Finally, the plan needs to be implemented because “A financial plan not implemented is a futile excersise”. However we more often than not first choose a product and get impressed with its features and invest in it not realising whether the same fits into our scheme of things. So it’s like first choosing our mode of transport and then deciding on the location.

2) Listen to advice, implementation can wait:-
In the process of financial planning, we come across a few people who are very excited about the whole exercise initially.  They are keen to take advice and understand their financial status from a financial planner. However, taking advice is just a small percentage of the entire financial planning exercise. The process actually starts after the plan is presented. The implementation is of crucial importance because, a delay in the same will affect the effectiveness of the suggestions and achieving one’s milestone could become difficult.  Similarly regular financial plan reviews are extremely crucial because there would be changes in one’s goals, incomes and expenses. One needs to know where he has reached in comparison to his goals in the financial planning excersise.

3) Emotional planning for logical decisions:-
Financial planning deals a lot with financial behaviour of the individual.  We often see people investing in markets at the highest point and refrain from investing when valuations are indeed attractive. Similarly we tend to follow fads a lot, so if gold or real estate seems to be doing well we end up allocating a major part of our portfolio towards such assets.  This hampers our portfolio allocation. However what causes a real dent in our path to effective financial planning is our expenses which are more often than not driven by emotional needs. It can be a small purchase in a shop or a big purchase like buying your home. We tend to base decisions on emotional counts. We often come across cases where the budget to buy a car was Rs. 4 lacs but ended up spending more than double the amount. Another common example is that of home rennovation which always over shoots the monetary limits assigned. So every time there is a cash outflow its extremley important to ask whether what we are giving into is a need or a desire.

4) Short term memory :- 
I often conduct corporate seminars on financial planning and I have seen a trend in the questions asked by particpants at various market conditions. When markets are doing well the questions are more about assets which are growth oriented and less biased towards security of ones asset class. Similarly when markets start tapering down everyone is on look out for guranteed return products. This is a problem, as our portfolio needs to be well balanced and has to be reviewed from time to time. We tend to forget the past as to how certain assets behaved and tend to focus all our attention only looking at the immediate present. This can prove expensive in the long run.

The mistakes mentioned above are just a few of the several mistakes which we do in managing our finances. These errors, if not tended to, can lead to bigger financial blunders in the long run. However it is never too late to try and get your finances in place. All it requires is a proper guidance and a strong financial discipline.

How to control your money

With a constant surge in the cost of living, people are finding it more and more difficult to live within their means. Our incomes are barely sufficient to provide for our expenses and saving money is the last thing people can think of. The commonly asked question in such a scenario is “How do I save money when I am struggling to make ends meet?”

Here are some tips which can be followed to control our expenditure. One cannot expect to save money immediately one starts following them, but these simple steps can certainly help in curtailing one’s outflows.

1. Give yourself a budget
The word “budget” can send shivers down your spine, but let us ensure you that it isn’t as scary as it sounds. It simply means to give yourself a benchmark figure so that you can monitor whether you can stay within the limits. 
For e.g. If one currently requires Rs. 30,000 to run the household, he/she should ensure that they withdraw only the required amount and not more than that. Once we have only the stipulated amount of Rs. 30000, we can then slot it into various categories such as grocery, fuel, medical expenses etc.
Having excess liquid cash at one’s disposal doesn’t always work to their advantage. It gives one the message that they can spend more than what they actually need to.

2. Itemize your expenses
Most of the expenses of a household are due at the start of the month for eg. Grocery, Society maintenance and so on. The trick is to note down each and every item of expenditure so that you don’t lose track of what you’ve spent. You can either maintain a notebook or an excel sheet depending upon your convenience.

At the end of the month, when you see your expense list in black and white, that’s when you realize how well you’ve done through the month. You might have spent far less than what you provided for or you might have exceeded your monthly budget. But this will give you an idea and a reminder to do better in the following months.

3. “If you buy things you do not need, soon you will have to sell things you need” Warren Buffet
With the nature of products available in the markets and the ever-increasing number of shopping malls, one needs the strength of elephants to say NO to their wants. Before purchasing any product, always ask yourself one question “Is this a need or a desire? Most of our so-called needs turn out to be stuff which we don’t need at all. At the moment of purchase, they seem like commodities we cannot live without and we convince ourselves to buy them. But when it actually comes to using it, half of the people don’t know why they bought so much stuff and the other half don’t know where all the stuff has gone. For eg. Clothes and accessories- the more we have of them, the less we feel contended. Ask yourself whether you visualize wearing this often or you can do without buying it.

4. Keep your credit card out of reach of yourself
This may sound like a funny disclaimer but it actually works. The amount of cash we carry when we go shopping can be limited, but we also carry with us some plastic cards which are free to carry but are really expensive when used. The limits on these cards are thousands and sometimes even lakhs of rupees. People, many-a-times swipe their cards for stuff they probably don’t need and are in a fix when the bills arrive. Credit/ Debit cards are not always dangerous. Sometimes urgent medical or other unforeseen expenses can be met with, with the help of these cards. But when they entice you into spending money, that’s when you need to lock them up in the cupboard. Credit Card companies offer cards and high limits on them because it is their job to ensure that you spend money, so that they can retain their jobs. But remember that, the person paying these bills is none other than you yourself. The interest charged on outstanding payments is a whopping 36% p.a. which is added to the bill on non-payment. If you already are in such a situation, we would advise you to settle this as soon as possible.

5. Monitor Yourself
At the end of every month compare your expectation with reality. At first, it may seem depressing but as the months go by and you see results in the form of surplus money, you will thank yourself in the long run. The money thus saved can go into something more productive in the future.

Always remember, curbing a lavish lifestyle may seem difficult but not having one is worse. So the next time you go shopping you know what to do.
   
The writer is Head Admin Team at MSVentures Financial Planners.

Why can a financial plan only be custom-made

We have always come across people saying that no two persons can have the same set of Fingerprints. This theory remains unchanged even in case of financial planning. Financial planning, in common terms, is a roadmap which ensures that you reach your destination without any difficulties.

There are several reasons why a financial plan can never be the same for two people.

1. Milestones Vary
When a person approaches a certified financial planner to sort out his economic life for him, the first question that he would be asked is “What are your goals?” It simply means that he has to list out his objectives in order of priority.

For eg. An average individual, Mr. A, who is a married 35 year old having one child may have goals like Child’s Education, Child’s Marriage, Buying a House, providing for Retirement etc. as against Mr. B who is a 55 year old who would have objectives such as ensuring Medical and other health securities for him and his family, ensuring a comfortable retired life etc. 
This goes to prove that everyone has different goals in different orders of importance and the goals can also differ for the same person at various intervals.

2. Time Span Differs
With varying goals of individuals, the time frame of goals also differs. This means, that when a financial questionnaire is presented to the individual for filling up his details, he will have to list his personal details along with the goals for which he is investing for. Each of the goals will have a specific time frame attached to it i.e. in terms of days, months or years. Depending upon the severity of the goal, the financial plan will change over a period of time. Similarly, as goals change, the time frame attached to it will also differ for every individual.

3. Risk Appetite Divaricates  
A financial plan is a process which can be exercised on individuals from all walks of life. Some may be salaried, some professionals and others may be businessmen. With every changing individual and occupation, the risk taking ability varies. The financial planner first ensures that the individual and his family have the pre-requisite emergency funding for all contingencies and then proceeds with his plan execution. With the amount required for various goals in tow, the client can take calculated risks after consulting his financial planner as against a person whose basic funds are not allocated in accordance with the goals.

4. Current Financial Position   
The prevailing financial position of the client also determines the shape his financial plan will take. Current financial situation involves a thorough analysis of the assets which the client holds, the asset class, whether the individual is actually holding a white elephant in the name of “asset” and so on. Simultaneously the liabilities of the individual also causes a shift in the financial plan viz.a.viz the nature of the liabilities and what portion of the net worth it is eating into. The resources, in relation to the debt and the current income of the client and his family put together will help mould the final layout of the financial plan.

A financial plan is not only about showing the mirror to the person, it also involves incorporating the changes in the above factors from time to time in order to give him a comprehensive solution that helps him achieve his goals.

The writer is Head Admin Team at MSVentures Financial Planners.

Why tax benefits may not be available in some cases

Most people believe that all that they have to do for the purpose of claiming a deduction is to complete the process required and then the benefit will be available to them. While this might be true for most situations there are some cases where the individual could find themselves being unable to claim the deduction as there are several conditions that need to be fulfilled. This is especially true when they relate to those that are claimed under Section 80. Here is a look at a situation where this would happen and how the individual can ensure that they are not trapped in such a position.

Common benefits
There is a benefit of Rs 1 lakh of deduction that is available for making investments in specified instruments like Public Provident Fund, National Savings Certificates, Senior Citizens Savings Scheme, life insurance premium and so on under Section 80C. Other benefits include those for medical insurance premium payment, treatment of specified diseases, donations etc. Most people undertake the required action and then believe that the benefits will come to them in their tax calculations. However there are some situations where this might not be possible because these variations are clearly outlined as those that will restrict its applicability. There are some common situations when  this might actually be visible.

Short term capital gains
The taxpayer could be an individual and there could have been short term capital gains that have been generated during the year. This would have to be short term capital gains from equities or equity oriented mutual funds. The other condition is that there should also be a securities transaction tax that has to be paid on the transaction. This would make the applicable rate of tax on the amount of gains that have been earned at 15 per cent so this is a situation where some difference will be seen in the applicability of the deductions. The conditions state that when there are such gains then the deduction from Section 80C to Section 80U is not available for these gains. This will bring a long list of deductions from medical insurance premium to treatment of specified diseases and even donations under this restriction and would turn out to be a tough proposition for many people.

Applicability
There are a couple of situations under which you could find that the benefit is limited. The first is where there is a position where most of the income is from short term capital gains. This could be the situation for a senior citizen who might have some small amount of regular income but could have ended up with a large short term capital gains either because the markets were good or because they ended up selling some bonus shares where the cost is zero. In this case they would need to pay the required tax and not have the benefit of the deduction for which they might have made the investment.

The other situation when this could possible happen is where there is income being earned but at the same time this is not very high and then there is a large amount of one time short term capital gains earned. In such a situation once again the individual would find that they are not able to make use of the deduction for which they had planned.

One of the ways in which this situation can be tackled is to look at the overall position right at the beginning before any transaction is made and hence this will give an idea about the taxability that would arise. This is a good way of going about the process as there would be some additional planning that can be undertaken when there is a possibility that the benefits could end up being disallowed.

The author can be contacted at arnavpandya@hotmail.com