A viewer on YouTube writes, “Hello sir, Firstly I just want to call out that your book “You can be rich too with goal-based investing” is just amazing. I have an investment portfolio for the next 15 yrs, for my retirement. My investment is 6 months old. Currently, my asset allocation is 70% equity and…

A reader asks, “Can you please write an article on when an investor should capital gains tax after redeeming from mutual funds or shares? That is, which time of the financial year. Should I pay the tax immediately or can I pay in March of each financial year?” The short answer to this question is…

A few days ago Sensex and Nifty experienced their first negative yearly return. Many new equity mutual fund investors are worried and wonder what to do. The standard answer to this in social media is, “be patient and wait. This is how the stock market behaves. It will all work out in the end”. Sadly,…

A reader asks, “I understood the importance of asset allocation/annual rebalancing exercise from your old article. I see the below text by one of the leading BAFs (see link below) – When investors manually move their money between equity and debt, they could be subjected to taxes on the capital gains made in the short…

Many investors incorrectly believe that a mutual fund SIP is a “strategy to reduce risk”. Unfortunately, this is not the case. A SIP is merely an automated way to buy mutual fund units on the same date of each month. If the markets move up, long term SIP returns move up. If the market moves…

Mutual fund NAV risk is measured using the standard deviation. This can be thought of as the average deviation of a monthly return from the average monthly return. Higher the value, the higher the risk. Unfortunately, this is not an intuitive number like the return. So this begs the question, is it possible to classify…

When we select a mutual fund there are two implicit questions we would like answered. (1) How risky is this fund? (20 How risky is this fund relative to other funds? The mutual fund riskometer is supposed to give us a quick idea about this. Unfortunately, the riskometer has evolved into a cumbersome and unhelpful…

A reader on our Youtube Q & A session asked, ” Hi, First of all, congratulations on providing a platform for people to ask questions. Usecase: Let’s say I have a sum of 10 lacs to invest in the market for the long term(10+ years) for wealth maximization. I plan to park this money into…

A reader on our Youtube Q & A session asked, “Sir, my question is as follows: My age is 25 years. I have started sips in MFs since Oct 2021. I don’t have time to analyse stocks ( i have a 13-14 hrs job). I am now sitting on a significant loss. My corpus goal: 2…

Many young investors in mutual funds suffer from a problem that needs urgent attention: they are constantly seeking motivation to continue their investments in mutual funds. A discussion on why they need to get real and get over this to build wealth. So what is the problem? Articles such as these: Does long-term equity SIP…

A reader asks,” Sir, I started investing in Tata Digital India fund in Sep 2021. The NAV has been continuously falling since then. What should I do? Exit or continue to hold? Please advise”. We asked the reader, “Why did you choose this fund?”. Response: “I thought it would be a good idea to diversify…

A reader writes, “I read with interest your series on market timing. You mentioned that sequences of risk are common to both systematic investing and market timing. Can you please give a simple example of this?”. To those who have not read the series, the article mentioned above is this: A risk in market timing…

A reader asks, “I wonder if you can write a blog post on the Risk of fund house concentration in one’s investment portfolio. I am a follower of Freefincal Finance university and use Robo Advisory to manage my investments. Hence you can assume that I follow asset allocation as prescribed by the tool, and invest…

We discuss how to avoid a common mistake made by investors while computing mutual fund SIP returns. On 20th May 2021, the Sensex (price) index was 49,564.81. About 5 months later on 18th Oct 2021, it rose to 61,765.59. Many mutual fund AMC investment dashboards or investment portals would report the annualized return during this…

A reader writes, ” I am in a dilemma and need your advice. I am 3 years away from one of my financial goals. On analyzing my MF portfolio the peak value was in October 2021 and the markets have corrected since February 2022. If I systematically transfer the money now from the equity fund…