Finance

Chandan Sapkota’s Blog

Private sector estimated to get 64 percent of the full total estimated investment; the Federal government will make investments the others. The service sector is likely to absorb around Rs 732.17 billion, the industrial sector Rs 153 billion, and the agricultural sector Rs 133.5 billion. 20 billion) at producer prices. Year it is likely to reach Rs 1176 This fiscal.56 billion.

Total intake in mid-July 2013 is likely to reach Rs 1239.5 billion (88.79 percent of the estimated GDP). Meanwhile, total investment is expected to reach Rs 359.3 billion. Sub-sector wise, transport, storage space, and communication gets Rs 223 billion while agricultural and forestry sector is getting Rs 130 billion. It is motivating to see that the infrastructure sector is getting the most priority.

It has been discovered as the most binding constraint on Nepal’s economic growth. But, where is the investment in producing electricity? Generating around 200,000 jobs will be a concern, unless this one is temporary focus on. How are we going to route remittances, which amount to 20 percent of GDP around, in the domestic (productive) sectors?

How will this course of action to help to remedy the most pressing macroeconomic problems and macroeconomic paradoxes in the Nepali economy? Investment by itself does not increase employment. There may be job-less growth, fueled by over-investment in few sectors such as real estate. Actually, with considerable leakages and fragile institutions, the development rate is probably not as expected even if there is increasing ‘investment’ by means of money being channeled to the given purposes. Exactly what will happen to macroeconomic balance (fiscal and monetary)? How will the central bank or investment company react to rise in the general price level (demand-side effect from the injecting of new investment money and offer side effect via source bottlenecks, deficit creation and imports from India)?

However, if rates of interest rise substantially preferred stock may likely be hurt, much as bonds would be. Preferred stock rests above common stock (but below bonds) in the administrative center structure, and therefore it must obtain dividends prior to the common stock gets any dividend, but only after the company’s bonds have received their interest.

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Because of the structure, preferred stock sometimes appears as more dangerous than bonds generally, but less risky than common stocks. “Nearly all investors would advantage by exposure to REITs,” says Morris Armstong, financial founder and strategist of Morris Armstrong EA, LLC. High dividend yields, which are derived from the legal mandate to spend income and are backed by constant cash flows from rental property. Less correlated with the broader market, meaning REITs are powered by different facets from most shares, so they may offer diversification benefits. No management head aches, allowing you to rest easier knowing that you have to fix a damaged air conditioning equipment at 3:00 a don’t.m.

Property diversification, and therefore a REIT is invested in dozens or even a huge selection of properties often, so its success is not dependent on only a few assets, unlike the portfolios of many 3rd party landlords. These benefits are some of the most significant to investing in REITs, in accordance with both stocks and shares and direct investment in rental property. When buying REITs, pay careful attention to the company’s debts load, to make certain that it’s lasting.

While it’s a common business practice for a REIT to run a significant debt, investors must make sure that the ongoing company is able to manage it and still pay out its dividend. Second, investors have to be careful around non-traded REITs and private REITs. Salespeople are incentivized to hawk non-traded REITs, and so these REITs often charge a steep payment, which comes right out of your investment before you even start to make any money. And because they’re non-traded, it’s often very hard (nearly impossible) for investors to market them if they come with an urgent dependence on cash. Investors will obtain an up to date valuation on the investment only periodically, unlike with publicly traded shares.

Also, investors should be wary of the costs of real property that comprises the worthiness of the REIT, especially in a red-hot market. Those values can fall, hurting the price of the REIT. “We’ve all seen this movie before – sky-high real estate prices, sky-high stock market prices,” says Craig Kirsner, leader of Stuart Estate Planning Wealth Advisors.