Return of the sith with bullshit?

Back from a long break, hoping to blog more often from now on.

I have been reading Bill Bryson - A short history of nearly everything - Dhammo said, hope atleast these people landed in heaven - how true. Some of the guys mentioned have pushed the frontiers of our knowledge to limits which have seriously enriched the homo sapien understanding of the world.

As an aside, I intend to look at investment opportunities in this blog, so if you looking for some investment analysis, keep visiting.

Since I have been a great fan of Benjamin Graham, I believe in maintaining a very balanced portfolio - debt and equity in the portfolio. I still have not mastered the balancing bit and hope to setup some rules for myself, so that I can effectively book profits in a bull market and cash on capital appreciation.

I am trying to build a balanced portfolio and will share some of the instruments I am using to this effect.

Lets start with debt - I will write about some interesting options on the fixed income side and then move to the equity side.

NABARD has launched the Bhavishya Nirman Bonds - the current one on tap has a fairly good yield for a debt instrument of 10 year tenure. It is a deep discount bond/zero coupon bond with a face value of Rs . 20000 and a tenure of 10 years, issued at a price of 8250 if you are a retail investor. Its an unsecured instrument mind you, so maybe the premium is justified. I need to check out the current t-bill yield but locking in a pre tax 9% quarterly compounded yield is fairly good I think. If you can take that kind of a tenure then investing in this makes sense.

Although the option of holding this investment in demat form exists, trading on the BSE is in physical form and in market lots of 50 , which is slightly large. I have not checked the trading volumes of deep discount bonds but the option does mean you have some liquidity. Odd lot trading was something from the era of paper trading and am not most guys understand it today.
Should one invest in a deep discount bond ? The main advantage is that you avoid the re-investment risk, and (need to check on this!) the tax treatment - where the interest is considered capital gain and not income, helps if you are in the higher income bracket.

check it out at www.nabard.org.

Disclaimer : This is not an investment advice, you should speak to a qualified financial planner and tax consultant before acting on this post. This represents my view and my view only, not of my organisation, my parents , my pet fish or any other entity living, dead, fictional or otherwise.