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- Interestingly, the Russian Sukhoi-35 fighter has also joined the race for Indiaâs âmother of all defence dealsâ by submitting its bid to the preliminary tender or request for information (RFI) issued by IAF in April. This comes after the first six contenders, F/A-18 and F-16 (US), Gripen-E (Sweden), MiG-35 (Russia), Eurofighter Typhoon and Rafale, sent their bids in early-July.But it will take at least four to five years for the actual contract to be inked with the selected foreign original equipment manufacturer (OEM)-Indian partner combine. Itâs estimated each bare-bone fighter will cost around $100 million, with another $100 million for the âadd-onsâ in terms of weapons, simulators, performance-based logistics and the like.Though IAF would like the entire process to be fast-tracked, grappling as it is with just 31 fighter squadrons (18 jets in each) when at least 42 are needed to tackle the âcollusive threatâ from China and Pakistan, the still untried SP model involves quite a complex process.While an Indian company will be selected as the âstrategic partnerâ based upon âfinancial strength, technical capability and capacity/infrastructureâ, the OEM will be chosen in a separate but parallel process primarily on the "range, depth and scope" of the transfer of technology it offers. âOnce the AoN is granted to the 114-jet project, the seven contenders will be given three months to respond to the EoI (expression of interest) to take things forward,â said a source.Amid all this, some MoD insiders contend it would make âfar better economical and logistical senseâ to simply go in for more Rafales through a government-to-government deal, after the first 36 jets arrive in the 2019-2022 timeframe, but it has become âa hot potatoâ in the current political scenario.âWe are already paying for the 13 India-Specific Enhancement (ISE) upgrades to the Rafale fighters, infrastructure, storage etc under the 36-jet deal inked in September 2016. The infrastructure at the Hasimara and Ambala airbases can accommodate two Rafale squadrons each,â said an official.âIf India goes in for 36 more Rafales or decides to license produce 90 of them here, just one more airbase would be required. It will reduce acquisition and induction costs. But for 114 fighters of a different kind, at least three new bases with requisite infrastructure will be needed,â he added.Unlike other air forces in the world, the IAF already operates seven types of fighters in Sukhoi-30MKI, Mirage-2000, Jaguar, MiG-21, MiG-27, MiG-29 and Tejas, which is a huge logistical nightmare. Rafale will be the eighth one.
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- - A view of the fireworks at the main stadium in Jakarta during closing ceremony of the 18th Asian Games on Sunday night. UNI PHOTO-1U BY SESHADRI SUKUMAR
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- The toughest choice that faces MF investorsCuriously, it is the more knowledgeable and more involved investors who face this particular problem.
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- By Dhirendra Kumar Every saver knows that there are numerous mutual fund schemes and choosing a suitable one to invest in can be a difficult task. Everyone also has a way around it. They either seek the help of advisers or websites or just ask around. However, thereâs actually an even more difficult choice that investors faceâ"which funds to sell off and when. Curiously, it is the more knowledgeable and more involved investors who face this problem. The reason is those of us who are active and involved investors always have an urge to do something. Such investors generally do well because they learn, analyse and act more than others. Soon enough, they start equating being good investors with doing something, often anything. Unfortunately, along with everything else, in practice, this also translates into being all too ready to sell off their investments.There are many reasons for selling funds, but not all of them are good. There can be exceptions, but the good reasons tend to be about the investorâs own finances and the wrong reasons tend to be about the fund. Let me explain. Overactive investors give three reasons for wanting to sell off a fund investment. One, theyâve made profits; two, theyâve made losses and three, theyâve made neither profits nor losses. This may sound like a joke but it isnât. Someone will say, âNow that my investments have gone up, shouldnât I book profits?â Or, âThis fund has lost a bit of money recently, shouldnât get out of it?â And finally, âThe fund has neither gained nor lost, shouldnât I sell it?â Basically, what Iâm saying is that investors who have a bias for continuous action can create a logic for taking action out of any kind of situation.Also Read: 6 mistakes that small investors make when stock market is doing well, interest rates are risingSo which is the right reason for selling a fund? Obviously, none of the above. By themselves, they are not legitimate reasons for selling a fund. The first comes from the spurious âbooking profitsâ concept that advisers have promoted. Booking profits doesnât make sense for stocks, and it makes even less sense for mutual funds. In both, this attitude makes investors sell their winners and hang on to their losers. In mutual funds, the whole point is that there is a fund manager who is deciding for you which stocks to sell and which to buy. If the fund manager is doing this job well, then the fund will be giving good returns. Therefore, selling a fund that has made good returns is the exact reverse of what investors should be doing. Letâs come to the second reason now. While selling underperformers is a legitimate idea, you need to evaluate the timeframe and the degree of underperformance. Investors try to sell funds that have generally performed very well but may have underperformed other funds by small margins. Someone will say that over the last year, my fund has generated 25% but five other funds have generated 30%, so I will switch to those. This switching based on short-term past performance is counter-productive and does nothing to improve your future returns. Only if a fund underperforms consistently for two or more years, and drops down two notches in its rating should you switch away from it. In fact, following a relatively long-period risk-adjusted rating system is the right way to make a decision. So when should investors actually sell their funds? The right answer is that they should be guided by their own financial goals. You should sell a fund and get your money out when you need it. Letâs say you have invested for five or 10 or 15 years, continued your SIPs, and now the money has grown to what you need. You need to make a down payment for a house, or pay for your childâs education, or whatever else. If youâre getting close to that time, you should sell and redeem, irrespective of the state of the market. In fact, unless itâs an expense that can be postponed if needed, you should start acting one or two years before time. Withdraw the money from the equity fund and start parking it in a liquid fund. You can use an automated STP (Systematic Transfer Plan) for this, which will be convenient.In a manner of speaking, the primary goal of investing is not to invest but to sell because thatâs when you achieve your goal. Be guided by that.(The author is CEO, Value Research)
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