CONTENTS
LETTER
ISSUE CONTENTS
9 August 2012
FROM THE
EDITOR
W
Debashis Basu MONEYLIFE | 9 August 2012 | 10
STOCKGRADER 42
Investor Protection: IEPF-Protection Racket; Financial Literacy: The Ground Reality; Corporate Governance: Many Satyams
Travel Smartly e all love travelling. However, sometimes an ugly incident will mar an otherwise perfect trip. Recently, Moneylife wrote about how a group of tourists, using the services of Cox & Kings, found their belongings stolen in Italy. To deal with such incidents, there is travel insurance. However, like most other insurance plans, tourists are usually not interested in reading the fine print—until it is too late. Raj Pradhan explains in great detail—as he always does—the hidden risks that can inflict heavy financial damage unless you are insured properly. What is also needed is a strong dose of common sense that will minimise financial exposure. You could turn to our travel section to read about Greece. Ignore the economic troubles and revel in its scenic beauty and wonderful history. However, be sure to equip yourself with essential information on travel insurance in our Cover Story. Apart from being safe, you can also be smart by making turning to our Air Travel section, in which AJ explains how you can avail an airplane seat for your dream trip using frequent-flier miles. Pyramid/chain money schemes are cheating thousands everyday. A new paper released by Financial Stability and Development Council has only made a passing comment on these rather than taking measures to tackle it. Sucheta Dalal, in her Different Strokes section, writes about how the government and regulators are uninterested in tackling this menace. In her Crosshairs section Sucheta points out about how a government that cannot enforce regulation is ironically rooting for financial literacy. She also points out how the Investor Education and Protection Fund wastes its money while investors’ problems remain unattended. Moneylife Foundation successfully conducted its flagship seminar in Ahmedabad, which attracted a packed audience, once again. We conducted a seminar in Mumbai for senior citizens and one on insurance. Be sure to tune in and become a Moneylife Foundation member to check out forthcoming events.
18 DIFFERENT STROKES
20 LipService Neither the regulators, nor the states want to touch the biggest scourge of savers across India: pyramid schemes
24 Cover Story Travel Insurance: What You Really Need Buying travel insurance is often done to comply with the tour operator’s demand or the requirement of a foreign country for granting a visa. Raj Pradhan explains the risks that can inflict heavy financial damage unless you are insured and which of these can be taken care of by common sense
13
Your Interest
Insurer asked to pay insurance for theft of laptop from store; Railways not responsible for luggage lost; Water cannot be abruptly cut off, says Consumer Forum; Buildings in Mumbai to be surveyed
14
Your Money
Electronic Payments: Online Fund Transfer Charges Slashed; Survey: Investing Online; Financial Inclusion: Ernakulam District’s Achievement; RBI: Bank Branches Database, Fake Currency Notes, Plastic Currency; Banks: Minimum Balance for Savings Accounts
16
Current Account
Sitting for more than three hours reduces lifespan by two years
17
LOOSE CHANGE
Moneylife Quiz; Sound Bites: David Jacob, former head of structured finance at Standard & Poor’s; Vivek Ranadive, founder chairman of TIBCO Software; Paul Tucker, deputy governor, Bank of England; Keki Mistry, vice-chairman & CEO of HDFC Disclaimer: Moneylife has a policy of not allowing its editorial staff to buy and sell stocks that are written about in the magazine. All personal transactions in individual stocks are subjected to internal disclosure rules.
SMART MONEY
& 22 Fund Games How do mutual funds get big money? Through freebies, passbacks, kickbacks and bribes paid to large distributors, including banks
Medium Term
V-Guard Industries zoomed 19%, Balkrishna Industries went up 9%, while Atul Auto tanked 6%
Long Term
Shriram City Union Finance rocketed 17%, while Jindal Steel and Power fell 7%
AIR TRAVEL
46 Redeeming Your Airline Miles A few weeks back, we wrote about the importance of loyalty with an airline. Here are some insights on how to redeem that free ticket
CONSUMER ALERT STOCKS
32
Stocks Value Picks
Change in the Air
36
Street Beat
– Supreme Infrastructure – Apcotex Industries
40 Which Way No Man’s Land
41 Popular Picks Will Cement Get Unstuck?
Google 47 The Muddle The new look Gmail, is unfriendly, clumsy and irritating
AUTO
48 Outpriced Roadside garages are thriving because company service centres are too pricey
CAREERS
50 Con Job? From résumé writing to astrological predictions, the tricks job websites play to lure eager and worried candidates
INSURANCE
44 Insurance Trends – IDBI Federal Lifesurance Suvidha Savings: Low on Insurance – Kotak Life Insurance Assured Protection Plan: Built-in Protection Covers
HEALTH
We Blinded 52 Are by Science? – Tree-hugging can cure. Is it unscientific nonsense? – Pulse beat: Medical developments from around the world
LEGALLY SPEAKING
Onus 57 The is on You The insurer will reject your claim if you disclose wrong facts in the form SAVING AND INVESTING
60 Earning Curve Women & Money: Why women make better investors ML FOUNDATION EVENTS
Foundation 61 Moneylife in Ahmedabad The seminar which was packed to capacity focussed on safe & smart ways of saving, investing and passing it on BEYOND MONEY
66 Seeing Voices Aditya Govindaraj writes about how a mother’s quest to help her child overcome hearing disability has led to the creation of Sadhya Educational Trust
DEPARTMENTS Letters............................. 4 Book Review.....................58 Money Facts.....................63