When people say, “Over the long term, equity will provide good returns”, they often forget or do not want to consider how monthly or annual return sequences combine to result in the final annualized return (CAGR). Sometimes, the sequence of returns can be good or bad. This is known as sequence of returns risk, sequence…

“How would you explain ULIP compared to a direct mutual fund to a layman?” Tax expert Manmohan Sethumadhavan answers. About the author: Manmohan Sethumadhavan is a freelancer, investor, and personal finance enthusiast “in search of the absolute truth.” You can follow Manu on Twitter @ManuTsr. Also, read his articles: Capital Gains Taxation Rules Ready Reckoner for FY…

Each time the stock market falls, a new generation of investors learns how risky it can be, especially small cap and mid cap segments (which includes the Nifty Next 50). Equity investing is challenging for two reasons. 1) It requires incredible patience, discipline and conviction. See: Now Is the Best Time to Invest: Do not stop…

The equity market has been falling since September 2024. If you are losing patience and thinking about stopping or redeeming your equity investments, don’t! Now is the best time to invest – as long as your goals are far away! Even if we buy into the (incorrect*) belief that “over the long term, the stock…

We have been publishing a monthly equity mutual fund screener since Sep 2022. This uses rolling returns to determine how consistently active mutual funds outperform representative category benchmarks. This can also be used to appreciate how hard it is for active funds to outperform and why passive funds make sense – especially if you are…

Since Sep 2024, my retirement portfolio has lost an amount equivalent to 1 to 1.5 years of my annual expenses (X). That is if it was 10 times X in Sep 2024*. It is now 8.5 to 9 times annual expenses. * Not my real portfolio value. It will take a huge fall to erase…

In early 2024, the Securities and Exchange Board of India (SEBI) mandated that all mutual fund houses disclose the results of stress tests for their small-cap and mid-cap schemes. Following this directive, the Association of Mutual Funds in India (AMFI) required fund houses to publish these stress test results by the 15th of each month…

A reader says, “I was listening to the Let’s Get Rich With Pattu podcast last Sunday, and there was a discussion about what happens when your son inherits your portfolio. Can you help me understand the difference between adding a nominee to a mutual fund and keeping your family as a second unit holder?” “In…

A reader says, ” I am a 41-year-old self-employed person. I have been following your blog for 2 years. I wish to retire by age 55. I am following a rebalancing and derisking strategy in my retirement portfolio. My debt portfolio is 10% in constant duration gilt fund, 15% in dynamic gilt fund, rest in…

Ever wonder why index investing or passive investing should work? In this article, SEBI registered fee-only advisor Swapnil Kendhe explains the basics of indexing and why it is effective. About the author: Swapnil is a SEBI Registered Investment Advisor and part of my fee-only financial planners’ list. You can learn more about him and his service…

Rolling return charts have become prominent over the last few years, especially for mutual fund analysis. However, few investors understand how rolling return charts are computed and their benefits and limitations. A discussion. Rolling lump sum, rolling SIP, and many other mutual fund and time series analysis and financial planning tools are available in the…

We address a reader’s concerns about mutual fund investing. He writes, “As I continue my journey to financial independence, a few concerns have occupied my thoughts recently”. 1. Safety of Direct Investing on Mutual Fund AMC Websites “I have often contemplated investing directly through mutual fund AMC websites to minimize hassle. However, I am apprehensive…

A reader says, “I am 21 and about to start my first job. How do I figure out how much to invest in equity mutual funds and how much to invest in fixed income? My friends tell me to invest 80% to 100% in equity. Is this correct? There is no right or wrong answer…

Many readers write, “We like your content, but you have written so much that it is hard for us to determine which article to read first. Can you provide a quick-start guide for us to start our investment journey the right way?” The following is a list of steps for young earners. Older readers can…

We discuss what investors should do if they think their risk appetite is “moderate”. “What does moderate risk appetite mean?” We cannot define in any meaningful way what risk appetite is, let alone categorize it as low, medium, or high.  That said, determining risk appetite is a regulatory requirement, and expensive tools exist. An honest,…