A comparison between tax-free bonds that are available in the secondary market and RBI 7.75% bonds that can be obtained in the primary market. Which is better and how demand for tax-free bonds have quickly made them less attractive.
Continue reading →We are living in a time where half a data point is enough to announce trends, patterns prophecies. Every week one guy says the markets are going to tank and another says it will do well. The latest such development is the so-called inversion of the US bond yield curve and its association with the…
Continue reading →Here is why you should not buy G-secs (Government Securities) from retail platforms like Zerodha and NSE goBID and keep it simple with fixed deposits or debt mutual funds. Even if you wish to buy G-secs at the very least give several months for the platforms and the process to evolve before committing money. So…
Continue reading →The yield curve is a plot of current yields of bonds from the same type of issuer versus their respective maturities. Observing the bond yield curve is a way to find out what is going on with our economy. In this post, I discuss how one can do this some examples. Before we begin, my book…
Continue reading →The government announced the interest rates for small saving schemes yesterday and surprising or should I say unsurprisingly, the interest rates of many schemes, especially the long-term ones like PPF and Sukanya Samriddhi are still too high! Why is the government not sticking to policy? If you are surprised by the title in spite of…
Continue reading →Tracking gold-price movements in terms of USD and INR is a simple, but intuitive way to understand the strength of our economy. Here are some observations from staring at the historical gold price movement in USD and INR. The domestic price of gold, that is INR is the equivalent price in USD times the exchange rate….
Continue reading →Here is what you should know before buying sovereign gold bonds either in the primary market (when the next tranche is released) or secondary market (1st tranche issued in Nov 2015). In my opinion, there is only one thing that someone buying paper gold should know: just how volatile returns can be!! The fin min says They…
Continue reading →Tax-free bonds are purchased in the secondary market via a Demat account when either new ones are not available or not attractive. How does one decide between buying existing tax-free bonds and new ones? Should we just look at the coupon rate and choose the one which is higher? It depends on the purpose of the…
Continue reading →A discussion on how the term spread, which is the difference between the 10-year & 3-month government bond yield, can be considered as a macroeconomic indicator A macroeconomic indicator is one which gives an indication about the current state and future trend in the economy. Macroeconomic indicators can be used to change the asset allocation in…
Continue reading →Here is why one should not buy the sovereign gold bonds which are on sale from Since Nov. 5th 2015, despite the sovereign guarantee and the 2.75% interest rate. From today (5th Nov. 2015), Sovereign gold bonds will be available for subscription at an issue price of Rs. 2,684 per gram. Subscribers can buy bonds which…
Continue reading →Many investors would like to park their lump sum in tax-free bonds, and invest the interest paid out each year in mutual funds, stocks or PPF. What if the lump sum was invested in a mutual fund/stocks instead of these bonds? Which option would fetch the investor more returns? Here is a calculator to evaluate…
Continue reading →Do not invest in tax free bonds if your retirement is a long way off. Even if are retiring soon, do not invest in these unless you have thoroughly evaluated your options. There, I said it. That is the message of this post. I have been wanting to say that for a long time. Ever…
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