Five Investing Tips From Warren Buffett

What does Warren Buffett's message to stockholders mean for you and your money?

Every year Mr. Buffett, the world's third-richest man and arguably the most successful stock-market investor in history, writes a letter to stockholders in his investment company Berkshire Hathaway. BRKB -0.38% The latest came out this weekend. There are usually some nuggets for all those who haven't invested in Berkshire, and this year's letter was no exception. Here are five:

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Warren Buffett, chairman and chief executive officer of Berkshire Hathaway, before being presented the Presidential Medal of Freedom at the White House in February. Bloomberg News

1. Watch out for stock-market valuations.

Mr. Buffett's company is now sitting on a cash hoard of $38 billion. "That's among the highest levels it's ever been," says Stifel Nicolas analyst Meyer Shields. While Mr. Buffett says he is looking for a big acquisition, and has his "elephant gun loaded," the high cash pile also suggests he's having a challenge finding really good deals. If Mr. Buffett is cautious, investors might want to take note: It's another sign that many valuations on the stock market may be looking a little stretched.

Top trading tips by Sanjeev Bhasin

Markets are clearly exhibiting strong bullishness on the back of return of conviction, future expectations and fund flows by the foreign investors. Investors are buying cyclicals like banks and capital goods and are selling defensives like, FMCG, pharma & IT With rupee clearly showing strength, exporters would continue to be under pressure.
On Tuesday, we saw continued ETF buying, which countered the weak global cues. The trend may continue today. Also, market grapevine has it that a large & influential foreign broking house that was negative in banks has turned very strong buyer. As a result, banks led from the front & may continue to do so. The weakness in China can only spell good news for India as commodity weakness helps lower inflation.
The trade for today would be buying banks & capital goods, with counter selling in IT, pharma & FMCG. However, buying is in blue chip names & not high beta as markets could surprise with a mild correction as consensus bullishness rules the street.

Tax planning tips for different age groups and various income slabs

 
Tax planning is one of the most important aspects of personal finance. People often fail to look at tax planning objectively and straight away start making investments related to tax saving. Also they often tend to mix tax planning and investment planning, which are totally different and are made with varying objective.
Insurance for long has been the front-runner whenever investments regarding tax savings are considered. Life insurance is not an investment option but a financial tool, which protects from any unforeseen eventualities. Buying excessive insurance however leads to holding unnecessary products.
Savings under section 80C can be broadly classified as investment based and non-investment based.
Provident Fund (PF), Public Provident Fund (PPF), Employees' Provident Fund (EPF), National Savings Certificates (NSC), National Pension System (NPS), Fixed deposit (FD) and Equity Linked Savings Scheme (ELSS)come are investment based savings; while principal repayment of home loan, tuition fee are non-investment based.
Before making investments related to tax saving it is always important that the individuals must analyse their risk appetite, and determine the percentage of debt and equity exposure they are comfortable with. Then they can match these percentages of debt and equity while investing in the available tax saving investments.
Since the risk appetite, liquidity needs and current portfolio of every individual are different, making investments based on just returns is not advisable.
TAX PLANNING AGE-WISE
23-30
This is generally starting phase of the career for most of the professionals, and therefore is the right time to start saving for the future. The investments made during this phase should have a long-term investment horizon. Starting to save and investing for retirement will give an edge if started at early age because of power of compounding.
Investing in a mix of ELSS and pension-related schemes like EPF, NPS or EPF is a good option for professionals of this age group. By doing so, they ensure that they plan for their retirement from an early age. It also provides the advantage of providing equity exposure to their retirement fund.
It is also advisable for the professionals of this age group to get required life insurance cover and health insurance cover. They can take the advantage of low premium rates if they start during this age. Avoid falling in the trap of endowment plans and unit linked insurance plans.

13 investment tips for 2013

Let us all welcome the year 2013 with varied ideas to bring home tax planning for you and your family and also take you through Investment Strategies for investing your money. The following thirteen important Investment Tips for the year 2013 will surely help you to achieve your desired results :-

 1. Income-tax file for one and all: In whose name to make the investment yes, this should be the first point in the back of your mind before planning investment strategies for 2013, it is time now for every tax payer of the country to make a resolution to have a separate independent Income-tax File for every member in the family. The objective of this is to achieve tax planning and cut down on your income-tax payments. Firstly think of your wife and if she does not have till now a separate independent Income-tax File, then start of having such independent Income-tax File for your wife. The concept of gift and loans in the name of your wife will help you to achieve this. However, do remember that your wife can receive gift from any relative other than her husband, her father in law and her mother in law. However, wife is free to take loan with reasonable interest from anyone including the husband. Similarly adopt the concept of gifting your major children and start having separate independent Income-tax File for your major children.

 2. Investments for Hindu Undivided Family tax file in your kitty Investments made by your Hindu Undivided Family can bring rich dividends for you in the year 2013. If you are a Hindu, then it is time now to find out whether you have a separate independent Income-tax File of your Hindu Undivided Family. If still now you have not been instrumental in opening a separate Income-tax File for your Hindu Undivided Family, then right now is the time when you should start such separate Income-tax File in your family so that it helps you in the process of tax planning. The HUF file apart from enjoying the basic income-tax exemption of Rs. 2,00,000 will also continue to enjoy tax deduction in terms of section 80C as well as deduction for interest on housing loans. Also do remember that your HUF file can come into existence whether you have a son or just a daughter and even if you do not have any children, still your HUF file can come into existence right now.

Stock Market Investment Tips(16 - 20)

16. Recognize the Signs of a Top.Whether it is tulip bulbs in 17th century Holland, gold in 1849, or Beanie Babies and Internet stocks in the 1990s, any time a crowd has unanimously agreed that a certain investment is a "can't lose" opportunity, you are probably best off to avoid that investment. The tide is likely to soon turn. Also, when you see people making investments that they have no business making (think bellboys giving tips on bonds, auto mechanics day-trading stocks in their shops, or successful doctors giving up medicine to "flip" real estate), that's also a sign to search for the exits.
17. Look for Quality.
If you focus your attention on companies that have wide economic moats, you will find firms that are virtually certain to have higher earnings five or 10 years from now. You want to make sure that you focus your attention on companies that increase the intrinsic value of their shares over time. These afford you the luxury of being patient and holding for a long time. Otherwise, you are just playing a game of chicken with the stock market.  

Stock Market Investment Tips(1- 15)

1. Keep It Simple.Keeping it simple in investing is not stupid. Seventeenth-century philosopher Blaise Pascal once said, "All man's miseries derive from not being able to sit quietly in a room alone." This aptly describes the investing process.
Those who trade too often, focus on irrelevant data points, or try to predict the unpredictable are likely to encounter some unpleasant surprises when investing. By keeping it simple--focusing on companies with economic moats, requiring a margin of safety when buying, and investing with a long-term horizon--you can greatly enhance your odds of success.  
2. Have the Proper Expectations.
Are you getting into stocks with the expectation that quick riches soon await? Hate to be a wet blanket, but unless you are extremely lucky, you will not double your money in the next year investing in stocks. Such returns generally cannot be achieved unless you take on a great deal of risk by, for instance, buying extensively on margin or taking a flier on a chancy security. At this point, you have crossed the line from investing into speculating. Though stocks have historically been the highest-return asset class, this still means returns in the 10%-12% range. These returns have also come with a great deal of volatility. (See Lesson 103 for more.) If you don't have the proper expectations for the returns and volatility you will experience when investing in stocks, irrational behavior--taking on exorbitant risk in get-rich-quick strategies, trading too much, swearing off stocks forever because of a short-term loss--may ensue.
 3. Be Prepared to Hold for a Long Time.