1

In a two-part series, I would like to discuss how to spot (I) and how to handle (II) mutual fund underperformers. I write this after suggestions on twitter and by Kunal Lal.

The first step is to define underperformance. This is possible only if the right category of mutual funds is first selected for investment. Most investors do not do that. AMCs offers incorrect suggestions regarding

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35

Radhey Sharma* who blogs at The Wealth Wisher recently compared critical illness insurance policies in India. The following is an expansion of my comment to his post.

* He used to. It is now run by Madhupan Krishna.

What is CI insurance? It offers a lump sum if the insurer is convinced that an individual has any one of critical illness listed in the policy document. The payment

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9

If diversification is about 'not keeping all eggs in the same basket', rebalancing is the realisation that 'what goes up, will come down'. Yes, investment portfolio management is all about simple common sense. In this post, I would like to revisit the topic of portfolio rebalancing and discuss what it is, why do it, and simple ways to do it.

I would like to thank Sunny Sachdeva for suggesting this

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12

Diversification refers to the simple common sense, 'not to rely too much on one entity'. In this post, I discuss simple ways to build a diversified portfolio using mutual funds.

The main purpose of diversification is to minimise losses, or rather the volatility in the portfolio value. This implies reducing exposure to an asset class with 'potential' to offer high returns.

Step 1:

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4

Suppose you had invested in a mid-cap fund, say SBI emerging business from Sep 2010. Here is a tool with which you can compare the current performance of the fund with all other funds in the mid-cap category and its benchmark.

I am not a fan of peer comparison after investing a mutual fund. Many other are. They end up reviewing their fund performance using star ratings. The ratings evaluate

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