Here is a simple goal planner that serves as a visual aid to highlight the importance of beating inflation for long-term financial goals.  It compares the evolution of the current cost of an expense with an assumed inflation rate and the growth of monthly and lump sum investments. The monthly or lump sum investment along with…

Here is a simple Excel sheet to keep track of monthly SIPs.  Unlike the automated mutual fund tracker, where the focus is on returns, this sheet helps to visually track the growth of a SIP relative to an expected growth. The user will have to enter the value of SIP each month to track its…

A step-up SIP, also known as growth SIP or increasing SIP or top-up SIP is one in which the monthly contribution  amount increases each year either by a fixed amount or by a fixed percentage of the current contribution. Here is a step-up SIP calculator that can be used to back-test investments from April 3rd 2006 onwards….

Nearly two years ago, one of my personal finance influencers, Ramesh Mangal, cautioned me that there is no clear-cut relationship between risk and reward. Although he had pointed me towards proof of the same, I did not pay much heed to it at that time. Now after being reasonably comfortable with commonly used risk-return metrics…

Do past returns matter? Does it make any sense to choose a mutual fund that has performed consistently in the past? After all, there is no guarantee that it would continue to perform well in future. Let us try out a simple exercise. Download returns data from Value Research Online of all equity funds currently…

Budget 2014 appears to have struck a cruel blow to debt mutual fund investors and distributors. Here is the latest version of the debt mutual fund vs. fixed deposit calculator to evaluate the utility of debt mutual funds. Update: Ramesh Mangal pointed out an error in the tool and the graphs. So I have pull…

‘Look before you leap’ is simple commonsense that escapes us Homo sapiens in most of our day-to-day activities. From eating, driving, breeding(!), spending, investing …. When it comes to investing, the following pattern appears to be way too common for comfort: A young earner realises the need to saving tax. A couple of months before March, a pension…

Whenever there is a discussion on stocks versus fixed income, someone or the other would say, ‘volatility is short-term but growth is long-term.  One can expect the markets to always rise over the long-term.  So buy and hold’. To this, someone or the other would respond, ‘have you not heard of the Nikkei 225’?  Stop…

In the third part on portfolio diversification, we shall study the correlation among stock sectors. Part I covered the diversification among asset classes and market caps, and part II covered international equity indices. Regular readers may recall that we already saw how to build a diversified equity portfolio with sector mutual funds. The mutual chosen…

I am doing a series on portfolio management strategies in the hope that it would lead to some Excel tools for the same.  In the first part on portfolio diversification, we looked at correlations between equity and debt, equity and gold, large cap and mid/small cap. In this post, let us consider the correlation between…

Risk adjusted return is a measure of the risk involved in producing a return. In this post we try and understand this concept using  PPFAS Long Term Value Fund which has recently completed one year in existence. Kindly note that this is not a review or a recommendation of the fund. I am only using…

Mutual fund investing can be stressful for many investors. The Ulcer index offers a way to measure this stress!bv The mutual fund risk and return analyzer now has a separate sheet for Ulcer index analysis. In this post, we evaluate the utility of this risk-return metric by considered a few popular mutual funds. The standard…

A few months back we saw what a compounded annual growth rate (CAGR) is and how it is calculated in the case of a lump sum investment. In this post, let us consider a mutual fund SIP and calculate the associated return. First a quick recap. Lump sum investment: Non-volatile instruments When a lump sum…