Investing - stay away from the toxic products! (Part 1)
Investment products need to be broadly investor centric catering to the genuine needs of a wide range of small investors rather than favor a few big fish(es). Ironically, investment products rolled out are based on public policies which gets formulated based on corporate-bias (in developed world) or government-bias (in developing countries). A good example of investor centric product is PPF which is offered on an individual basis (no corporate accounts allowed) and enjoys EEE (exempt-exempt-exempt) status on all three counts - amount invested, interest earned and maturity proceeds. Several bad and notorious examples exist in the market which needs no mention. A constructive example of how public policy combined with good regulatory oversight has helped fortify the retirement nest of the working class is Chile's pension system. The insurers are tightly regulated on two fronts - costs and performance. Insurers are required to bid for managing the annuities of pensioners, thereby...