Top 5 Sectors to Invest in FY 2010-11

New financial year 2010-11 kicks-off much on the back of pompous global recovery witnessed during the second half of the FY 2009-10. And, equity markets are no laggards in terms of catching these cues before hand.

However, the markets have remained largely range bound since June 2009 to March 2010 within the range of 4500 to 5300 on the Nifty index. This range bound movement can be termed as a broad based consolidation after a scorching pace of market recovery from its recessionary trough levels.

Now, that markets are again back at Nifty 5300 levels, it is on the verge of a likely breakout.Hence, it would be a prudent idea to have a check as to which sectors and industries would it be worthwhile for the investors to plough their hard earned money. Investors would be keen to know which sectors are placed better to be among winners for the FY 2010-11.

1) Power Sector

With the rising population and growth story of India, the need of fast paced growth in power generation is increasingly gaining importance. Energy is one of the major contributors to the economic development of a country.

The government has targeted electricity for all by 2012 by the end of 11^th Five Year Plan. The demand of electricity is growing exponentially. And, herein lays the opportunities for investors to plough their money in public and private sector companies both.

At present, coal based thermal power plants accounts for almost two-thirds of the energy needs of the country. However, the government is increasingly becoming aware about the benefits of generating power through cleaner nuclear power plants.

More recently, during the Budget 2010 announcement, the government has also laid emphasis on the development of non-conventional energy resources such as Solar and Wind Energy. Rural electrification is also a significant initiative by the government to allow access to electricity in remote regions in India.

Stock Picks: NTPC (Power Generation), Power Grid Corporation (Power Transmission), Tata Power (Power Generation) and Rural Electrification (Power Sector NBFC) and BHEL (Power Equipments).

2) Food Processing

As the growth of the economy chugs forward and consequently generates more employment and raises the standard of living of the middle class population; the demand for dynamic and processed food products will witness a manifold rise.

The processed food comes with enhanced food life and value added services to the raw form of food products. It also provides boost to the farmers as increasingly modern techniques goes into production of food and other activities involved thereafter. As per an estimate, Indian food industry is expected to grow to $280 billion by 2015.

The food processing treatment can be spread across various food products like products with low shelf life such as fruits and vegetables, dairy products & grain processing and storage among various other fields related to food products.

The upcoming years are likely to witness a fast growth in ready-to-consume food products like health drinks, frozen food products for low-shelf life food articles, readymade Aata(flour), fruit juices, ready-to-cook meals, quicker snack products like noodles and pastas, etc. with increase in percentage of working couples and busy life style.

The total plan allocation to the food processing industry has gone up sharply from Rs.650 crore during the 10^th Five year plan to Rs.4030 crore during the 11^th Five year plan.

Stock Picks: ITC, Ruchi Soya, LT Foods and REI Agro.

3) Banking & Finance

Banking industry is said to be a mirror of an economy’s health. A Sound banking system serves as a significant trade enabler to the country. During the recent global crisis, Indian banking industry came out with flying colors on the back of stringent stipulations laid down the Central bank.

With the opening up of the sector in early Nineties by the government, the industry has received a significant boost by the emergence of the private sector banks which increased competitiveness andenhanced the level of banking facilities to a top notch level.

However, during the recent global recession, even the lagging public sector banks have made a big come back on the back of large up gradations to suit the hi-tech services provided by the private sector and foreign banks.

For a sustained economic growth for the country, unmatched banking and financial services is a must in order to facilitate the increasing need of swift and hassle-free transactions. Banking sector is an enabler to the economic growth.

Stock Picks: HDFC Bank, SBI, ICICI and Bank of Baroda.

4) Infrastructure

The economic development of a country is directly linked with the infrastructural status of the country. Infrastructure not only acts as a enabler to higher growth but also generates employment and serves the social needs of the people of the country.

If the economy is an emerging one like India which is a laggard on the infrastructural front, the growth in the infrastructure industry gains all the more importance. High transaction costs arising from inadequate and inefficient enabling infrastructure can go a long way in stunting the growth rate of the economy.

The broad term of infrastructure can cover a wide range of infrastructural facilities from ports and road, rail, transport, aviation, water needs, mining and construction among other fields of operations. Better infrastructure can lead to faster enabling services.

Stock Picks: L&T, Patel Engineering, IVRCL Infrastructure, Hindustan Construction (HCC and Thermax.

5) Oil & Gas

One sector that has disappointed until now is Oil and Gas sector. The prospects of the sector have witnessed a lagging demand as the global economy is still to witness a complete recovery. The recent crisis has stolen a huge chunk of the demand of oil and gas which is needed to stoke the growth engines of every major economy.

Most of the large companies were building new capacities before the breakout of the recession. This new capacities led to excess supply and falling demand at a time when the demand was hit on account of slowdown and crisis. This led to plunge in the operating margins of the refiners who were stuck with excess supplies of crude products.

However, with the recent advent of a recovery on the horizon, there is a gradual pick-up in the global demand for oil and gas, as economies are back to pump money for higher capacity utilization of their resources in order to meet increasing demand of goods and products. Demand for petro products is expected to improve over next one year.

The 10 Rules for Successful Investing

With all the financial woes in the global economy, the worst thing an investor can do is to "freeze up." With all the ups and downs in the market, it's all too easy for investors to allow their emotions to take control. That's when the smallest mistakes turn into the biggest mistakes.

There's one antidote for this problem … remembering a few basic rules. Just embrace the 10 ideas that follow and you'll be in line to make some serious money in the months ahead.

Rule Number 1: Invest on the Right Side of Major Economic Trends: That old investing adage "Don't fight the Fed" serves as a good example here. Rising interest-rate environments make meaningful gains difficult to sustain – unless you know what to look for. Far too many investors got it wrong in the 2000-2003 and 2008-2009 periods by betting on growth stocks in a recessionary economy, and they're still getting it wrong. Those investors are likely to get burned again should the economy slow even more, despite the government-bailout and federal-stimulus efforts. Make sure to analyze all of the other major global trends, as well – and ride the ones that are truly unstoppable. You'll know them when you see them, because they'll have trillions of dollars in new capital flowing directly at them – investment plays in such areas as infrastructure, inflation, energy, food, and water (both supply and purity) are great examples.

Rule Number 2: Sell Your Winners: This may seem counterintuitive, but – if you want to succeed – you must sell your winners. Rule Number 6 – thinking like a plumber to prevent losses – is only part of the success equation. To be really effective, you have to take profits, too. That way, you get more capital that you can put to work. Think of it this way – Safeway Inc. (NYSE: SWY) regularly replenishes the inventory in its Produce Department to keep it fresh. You should do the same with the "inventory" in your portfolio because, if you let your stocks sit on the shelf too long, they'll eventually go bad – just like fruit that's past its expiration date.

Rule Number 3: Always Sit in an Exit Row: This rule goes hand in hand with Rule Number 2. One of the most common problems investors have is not knowing when to sell. Sometimes, they'll let a big loss get out of control (which violates Rule Number 6) – or, worse, they'll notch a big gain and then sit on the investment so long that it sneakily turns into a loss. The bottom line is that, up or down, you should always have planned exit pointswhen you initiate a position – and enforce them with "protective stops,"adjusting them as prices move in your favor (but neverwhen they go against you).

Rule Number 4: Your Broker is a Salesman. So unless you know you want to buy what he has, don't go shopping today! Wall Street is not a service business. Brokers exist for one reason and one reason only – to sell you stuff and make money . . . from your money. And the more of your money you give to them, the less you have to make more for yourself. So buy only what you want and what fits your goals and objectives – not the "stock of the day " the broker is pushing to meet his weekly quota.

Rule Number 5: Invest for High Yields:Contrary to popular belief, rather than investing for capital gains, you should aim for the highest possible yields and the most certainty you can find. The real secret to wealth-building iscompounding small gains over long periods of time. In fact, studies show that compound returns can outperform so-called "growth stocks" by as much as 22-to-1. Furthermore, dividends account for a huge percentage of total returns– varying studies have claimed anywhere from 60% to as much as 97% over time. So, don't ignore them!

 Rule Number 6:Think Like a Plumber: Big losses – like six inches of water in your living room – are expensive and can set you back years. Professional traders – and I'm not including the risk-junkie cowboys who drove the derivatives mess to heck in a handbasket – understand this. And because they do, they focus the majority of their efforts on avoiding losses, instead of oncapturing gains. It's counter-intuitive, but it really makes a difference. Besides, if you keep those portfolio pipes from bursting, you won't have to worry about your assets leaking away, drip by drip.

Rule Number 7: Buy Value: Buying when the underlying value is "right" can mean the difference between pathetic single-digit gain and truly market-beating returns. It's hard to make money when valuations – as reflected by Price/Earnings (P/E) ratios are greater than 20. More normal valuations sit in the 12 to 14 range. However, to reallymake money, you need to buy when valuations have been beaten down into the single digits – assuming, of course, that the company's underlying value is real. Doing so puts the odds strongly in your favor and can dramatically boost returns.

Rule Number 8: Retirement is a Lifestyle Issue, Not a Monetary One: When most people think about retirement, they think about safety. Big mistake. The single biggest problem facing us today is running out of money before we run out of life. If you've followed Rule Number 9, this shouldn't be a problem. However, if you've thought about safety and have not invested enough, what you're really doing is crippling your ability to earn future income – income you're going to need in order to eat, keep a roof over your head, and provide lifelong life health care. Oh yeah, and have some fun.

Rule Number 9: Start Early and Leave Your Money Alone For as Long as Possible: This is not the same thing as "buy-and-hold" investing. Buy-and-hold is not an investing strategy, it's a marketing gimmick – and, these days, it's more like "hope-and-pray" investing, anyway. The world's most successful investors – think Jim Rogers,Warren Buffett and the late Sir John Templeton, to name a few – don't buy and hold. And I don't believe you should, either. These experts buy and "manage," confining themselves to stocks and strategies that meet their specific objectives. Given that one of our critical objectives is to have our money working hard for us rather than us working hard for it, the point is that you want to start as early in your life as possibleand never miss an opportunity to invest.The longer you have your money in play, the better you will be paid when you're ready to cash out!

Rule Number 10: All Investments Contain Risks – But Not All Investments Contain the Same Risks:Despite all my talk about avoiding losses, the simple truth is this: If you want to grow your wealth, you have to take on risk. It's unavoidable. Every investment involves risk – the only questions are how much and under what circumstances. Remember, success is not about how much money you can make, but about how much money youkeep. As such, the true secret of wealth-building is taking risk properly.

Indeed, the late legendary U.S. Army Gen.George S. Patton Jr., once said: "There is nothing wrong with taking risks." But he also cautioned: "That's quite different from being rash." I completely agree. What's more, I think that Patton would have agreed with my belief that if you want to be successful in anything, you have to take a certain amount of risk every day. It's just a fact of life.

Yet, most folks are unwilling to do so – or they spread themselves too thin, and over-diversify, all with the goal of "protecting" themselves. Unfortunately, by doing so, these investors actually set themselves up for failure – not because they take too muchrisk, but because they don't concentratethe risks they do take in the right places!

What are those "right" spots? They're the investments that can provide the potential rewards to justify the risks the investor has taken.

Foreign Investment Process in Ukraine

By now foreigners do not have restrictions in their purchase, ownership, use and resale of real estate in Ukraine and specific types of non-agricultural land.  Some foreign citizens prefer to buy in the Ukraine by means of a local limited company type system to protect their privacy and assets from non-desired attention.  Whether or not this approach suits the individual investor is something to discuss with a lawyer in the Ukraine, hence now Ukraine doesn’t oblige foreigners to create a company in order to invest in real estate in Ukraine.

The services of a decent lawyer should be secured as soon as an investor sets foot in Ukraine and well before any offer to purchase real estate is made. The next person an investor will need to assist with the real estate buying process is an estate agent.  Ukraine is a country where there are both very good estate agents and incredibly corrupt agents who attempt to profit from both the buyer and vendor and potentially resell the same piece of property repeatedly.

If at all possible a real estate in Ukraine investor should seek the advice and recommendations of trusted sources over which agents can be trusted.  Decent property agents in Ukraine are well worth doing business with as they will know about real estate that are for sale before they are ever marketed, but their fees and who actually pays them should be negotiated in advance.

Once a piece of real estate or land has been identified as meeting an investor’s objectives an offer to buy it can be made which, if accepted, will result in the investor and vendor entering into a conditional preliminary sale-purchase agreement.  This contract should be checked by the buyer’s lawyer and then signed in front of a notary and notarized.

At this step a non-refundable deposit should be paid by the real estate investor and the investor’s lawyer should begin doing their due diligence on the real estate, the vendor and the title deeds of the property.  There is usually at least a 14 day gap between the preliminary agreement being signed and the signing and registration of the final contract to allow searches and surveys to be carried out.

To aid the buyer’s lawyer in his searches the vendor should offer the following documents: - 

1) The certificate of privatization or a previous purchase agreement or proof that the vendor is the owner of the real estate as a result of inheritance 

2) The certificate from the Unified Register of Prohibitions on the Disposal of Immovable Real Estate to prove that there is no outstanding debt or legal issues against the real estate being offered for sale 

In terms of the fees, charges and taxes that a real estate investor in Ukraine may incur these include the lawyer’s fees, real estate agent’s fees, property registration fees, pension fund duty and notary fee.