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,…

A reader says, ” How did you manage your emotions for all those years when you had negative or zero returns? I always had this question about your investing journey. How could you keep faith that it will all turn positive one day? I wouldn’t have done it for so many years. Did some sane…

A reader says, “Suppose my total investment in a mutual fund is Rs. 12,000, and its current market value is Rs. 17,000. If I redeem Rs. 8000, how do I calculate the current total investment?” Each time we invest in a mutual fund (or stock), we buy units at market price. Each time we redeem,…

Whether you seek normal or early retirement, here are seven questions to ask once a year while reviewing your retirement portfolios. 1. What is the retirement corpus worth today? If you retire today, how many years can you be financially independent? If this number equals the years you expect to be alive from today, you…

Many young freefincal readers appear to be overconfident about their equity investments. This could spell trouble for their dreams. I hate to break it to you, but there is no proof that long-term equity investing will always give you “good returns”. All those arguments about the economy growing and the equity market reflecting those returns…

A viewer on our YouTube channel wants to know,  “What are the “must have” mutual fund categories in a portfolio?” This is personal finance and it is deeply personal (for those who realise it is and act on it). So, there are no “must have” products or product categories (MF or non-MF). As long as…

On November 5, 2024, SEBI issued a circular titled, Disclosure of expenses, half-yearly returns, yield and risk-o-meter of schemes of Mutual Funds,  outlining three changes to the half-yearly disclosures made by Asset Management Companies (AMCs) under its jurisdiction. SEBI RIA Abhishek Kumar explains the changes. About the author: Abhishek is part of a freefincal’s curated list of…

Many readers ask, “Where should I invest a lump sum before deploying it into equity MFs?”. They research the best product for holding this lump sum, how long they should wait to start investing in equity MFs, and how long they should do the transfer. This is a waste of time, effort and money. You…

In this article, we cover the essentials of a mutual fund systematic withdrawal plan (SWP) in the format of an FAQ. 1: What is a Systematic Withdrawal Plan? The SWP is the opposite of a SIP. In a SIP, you invest a fixed amount each month (the most frequently used interval) and build a lump…

As readers may know, five mutual fund portfolios can be compared with the Google Sheets-based freefincal mutual fund portfolio overlap tool. Mr Sundararajan Srinivasan has updated the tool by replacing the existing (incomplete) Stock Sector listing with the standard SEBI classification. Features It allows you to compare the portfolio of five mutual funds. These can…

We explain the difference between profit booking and rebalancing using mutual funds in simple language for newbies, Profit-booking is a colloquial trade name for selling stocks or mutual funds.  Let us understand profit booking with an example. Suppose you purchased 100 stocks for Rs. 10. The initial investment value is Rs. 1000. After many months,…

Interactions with readers since Budget 2024 have made us realise that some investors are unaware of the difference between tax harvesting and portfolio rebalancing. One could also add “profit booking” into the mix. In this article, we explain the difference between these actions. Profit Booking: This is a fallacy. You cannot redeem only profits from…

A says, “Instead of starting a mutual fund SIP, can I manually invest each month?” The answer might seem trivial to old investors, but it is worth clarifying for newbies. Ask any AMC person or mutual fund sales guy this question, and you will get an immediate no. Followed by something like, “An SIP is…

Here is what you need to know and do to be a successful equity mutual fund investor. This also applies to the long-term direct equity (stock) investor. Understand the true nature of the stock market: All those stories of “compounding” that you have been fed do not pan out in real life. See: Don’t get…