Here is a 7-minute video that discusses the differences and similarities between the two types of annualized returns: the Compound Annual Growth Rate (CAGR) and the extended internal rate of return (XIRR). An annualized return treats an investment in a volatile instrument (gold, stocks, debt funds) as one that compounds and calculates an average year-upon-year return….

This is a 15 minute user manual for using a retirement calculator. It describes the nature of inputs found in typical retirement calculators highlighting the importance of reasonable inputs and erring on the side of caution. Although freefincal retirement planner app now available at Google Play is used for the illustration, the video is applicable for…

Do we have what it takes to be a successful long-term investor? Join me in evaluating our behaviour with respect to some time-tested notions. 1. Long-term implies minimal short-term maintenance! Long-term really means long-term! What is going to happen in the markets tomorrow, one week later one month later etc. do not matter as long the…

Over the last 2+ years or so, and especially over the last year, I have gained the reputation of being a IFA-hater due to my promotion of direct mutual fund plans, DIY investing, conflict of interest, SEBI regulations and fee-only financial planning. I have been part of heated debates on direct plans and fee-only advisory…

The RBI has cut interest rates thrice this year. On the one hand, this has made those who are using equity to accumulate wealth happy, as it could mean the start of a bull market driven by growth and not hope.  On the other hand, this development has worried senior citizens who are used to…

Here is how the revised pension will be calculated as per the seventh pay commission pay matrix. This is applicable for all civilian pensioners who retire before 01-01-2016. After the seventh pay commission comes into being, as an interim measure, the revised pension will initially be equal to 2.57 times the pension fixed at the time of…

Visu is a Tamil writer, actor, director and producer well known for his “family-oriented” movies and plays. He also became popular on the small screen when he began hosting a debate on social issues. Recently he was felicitated by the ‘Humour club’, a Chennai-based organisation that promotes healthy humour and humorists.  I got to see…

Mutual fund downside protection refers to instances when the weekly or monthly or year return of the fund is better than its benchmark, when the benchmarks corresponding return is negative. For example, suppose  a fund gives a monthly return of -10%, when the benchmark has given a return of -15%. The fund has only captured 67%…

How important is it to select a ‘good’ mutual fund for investment?  Although I have written step-by-step guides to select equity and debt mutual funds, ‘does fund selection matter at all’ is a question that has often bugged me. What if I chose funds randomly for investment?! In this post, let us consider the effects…

ICIC Amc launched a new feature called ‘moneyback’ in its ICICI Balanced Advantage fund. Here is why retirees or young investors should not choose the moneyback feature of ICICI Balanced Advantage fund. The moneyback feature is a terribly misleading term for a Systematic Withdrawal Plan or a SWP (check out a Step-up SWP Calculator). A SWP is the…

A method to analyse mutual fund performance during a particular investment duration in terms of consistency of returns is discussed in this post. Many mutual fund investors are unable to rationally analyse the performance of their equity mutual fund holdings and often ask, When should I exit an equity mutual fund?. I would like to suggest…

It is inevitable that any activity governed by human behaviour has similarities in the core approaches regardless of associated area or discipline. Investing is no exception. During the Pune workshop, when I said, “the returns of an asset class is not the same as the returns of an investor”, Ashish Deshpande in the audience remarked,…