RECESSION Bug on INVESTMENT

Recession everywhere, no jobs, less pay package, cost cutting, phew!!! It’s time for basics, putting a cap on your expenditure and think about some serious investments. Where to invest, well, here goes the answer:

•Bond Funds
Now is an especially good time to consider bonds, some planners say — perhaps for as much as 20% of assets. The percentage of corporations defaulting on their debt obligations is on the rise as the economy slows, the risk to investors is particularly low for investment-grade bonds. Moody's says the default rate on these products is less than 1%, compared with the 7% default rate on much riskier high-yield or junk bonds. The risk associated with investment-grade bonds is further minimized in a broad-based corporate bond fund. "If you hold an investment-grade bond fund, your exposure to defaults is pretty low," says John Puchalla, a Moody's economist. "But if you start buying individual bonds, you start raising that risk."
Investors with a greater risk tolerance — and much deeper pockets — may even want to consider buying into a junk-bond fund. Recent history has shown that junk-bond investors have earned their best returns the year after the junk-bond market bottoms out.

•Exchange-Traded Funds
For those investors itching to play the stock market again, planners say now isn't the time to try to pick hot stocks. Instead, they suggest buying shares in several exchange-traded funds, or ETFs. That way, they can participate in any early rally in stocks without being overly exposed to any single company's poor earnings performance. In the past few years, ETFs have grown in popularity with individual investors because they're cheaper and easier to invest in than traditional stock index funds.

•Money-Market Accounts and CDs

Finally, financial planners say that in a recessionary environment, investors shouldn't be ashamed to keep some extra money in an interest-bearing money-market account — especially if they're investing money they'll need fairly soon. He also suggests investors stash some money in six-month or one-year bank certificates of deposit, which on average pay a 2% higher annual yield than a money-market account. The bottom line is diversification. And that's a valuable lesson investors should keep in mind even when stocks are again heading due north.

For more, read SMART MONEY

Power of Ideas: SELLING your IDEAS

Now that your idea is ready, what’s next??? Well, it’s time for selling your ideas, the big task ahead i.e. approaching angel investors with your idea. As long as the idea is in your mind, it’s a piece of thought, the moment it comes on paper it becomes a blueprint of our business. And, when it’s business, it’s serious. So, how to make your plan eye catching for the investors?? What are the points to be covered which gives a strong foundation to your business?? Well, here are some points that needs to be covered on the paper:

1.Value Proposition of your Idea: Every unqiue idea sells and every generic idea fades. So, the first and foremost thing to cover in your plan is the business model and it’s USP.You should be clear enough of the market you would be catering to, geography segments and any validation that supports your business idea. If you have charted out a framework for your business, mission and vision statement, then it would be a value addition to your plan and good enough for the angel investors to believe your thoughts.

2.Sales/Marketing Strategy: The idea is viable, it’s unique and have potential to grow. But, the next question arises, how to sell your products/services and acquire customers? Mind you, without a good sales/marketing strategy in hand, business die. You might be very good in ideating but if you don’t know how to sell your ideas, then you are not a good businessman. Prepare a clear sales/marketing strategy for your proposition along with the expenses (advertising,branding and others) and growth model for your business.

3.Competitor Analysis: Your idea is unique and saleable but what about the existing players in the market? A good competitor analysis always supoorts your plan and help the angel investors to know the differentiation points of your business. Support your plan with the exisiting players in the market, SWOT analysis, unique features/ parameters of your products/services. DO mention the entry and exit barriers too.

4.Key Financials: Every start up/ business has a key question to ask i.e. when do we breakeven??? And that’s also the interest of the angel investors too. Present a proper plan of the funds required for your business, allocation of funds, capital required projected P and L Account, Balance Sheet etc. Good numbers support good business.

5.Risk Management: Risk Management is the key to everything right from a business survival to its downfall. It’s an important point that needs to be covered in the business summary. Risk Management includes risks that you either foresee or are already facing in your business and explain the same and do make a point to add risk reduction strategies too.

Interesting?? Well, keep reading STRATEGYAAN for more…

Power of IDEAS in Business Recession!!

Is the recession hampering your business and affecting your work as an individual? Are you one among those who is on bench because of no project allocation? Well, why not just sit peacefully and churn your brain to ignite the thought process which I am sure the recession will not be able to affect. Yes, I am talking about one thing which can really bring a revolution in your organization especially for start ups and also as an individual. The magic word is “IDEATION”. When you have nothing to do, brainstorm with your friends or colleagues. Think about the business ideas which are unique and you think can bring a change to the face of economy or society. The idea need not have to be great, but yes, it should be practical and something which can be implemented. Truly said by someone, that only when you think 100 ideas, then only there would be 10 which would be viable and perhaps 1 or 2 which would hit the bull’s eye. Sometimes, the worst of ideas have made millions not because they were rejected outright by few angel investors or didn’t have the potential to made it but because of the confidence and commitment by the individuals to make it happen.

In times, when the recession is hitting every individual and business, Economic Times came up with POWER OF IDEAS and to everyone’s surprise some 11,000 entries were received out of which 1000 got selected for second round of selection. And, those who were rejected, well my advice would be to work on your idea more, think about the loopholes of your ideas and work on it to make it more viable. And, if not anything, start ideating more. Every individual can bring a change. Whether it’s an economy or society, change starts with an effort of a single individual. And, Ideation is one way to bring that change. Ideas good or bad help you in exploring and understanding a lot about the nuances of business because a lot of research is involved. A thorough research on the market, competitors, and services/products gives you an insight whether your thought process is in right direction. Sometimes, there is a common question which arises is, what triggers an idea?? Well, the answer is “Difference”, difference to the society, economy or you as an individual. Anything that can give you a creative satisfaction is the cause for an idea to evolve. Whether an idea to be a success or a failure depends on the efforts, analysis, and viability of implementation of an organization or an individual. There’s nothing which can beat the recession the way an IDEA do. Idea can be about a fresh start, diversification, acquisition or merger or sometimes a mere discussion. An IDEA CAN CHANGE YOUR LIFE, rather, it changes the very moment of you as an individual or organization because of the hunger to do something new. So, what are you waiting for?? FORGET THE SENSEX and START IDEATING….