Shall we try out the following experiment? Pick a fund that you invest in. Say Quantum Long Term Equity or PPFAS LTVF or HDFC Balanced. Enter all the transactions in that fund(s) in a portfolio tracker. Then add a couple of index mutual funds like Franklin Nifty Fund or ICICI Nifty Next 50 fund. Use the same transaction dates and if you wish the same amounts for the index funds.

If you invest further in any of your funds, you add the same amount on the same date as a transaction entry in the index funds. If you redeem, you redeem from the index funds. Suppose you keep this up for 5Y, Maybe 7Y, 10Y or even 15Y. read more


Between Jan 21st, 2008 and July 6th, 2009, the Sensex witnessed 11 single-day falls of 700+ points. The highest was 1,408.35 points on Jan 21st. In this post, I discuss the simple arguments put forth by Edgar E Peters to understand why such stock market crashes occur, in his book, Fractal Market Analysis.

Kindle version of You Can Be Rich Too NOW only Rs. 87 Grab it now! read more


Here are five unique books that will will completely change the way you think about stock market risk and reward. They have certainly shaped mine and my first ever financial calculator was based on one of them. The books will bust established myths about the market - its so-called efficiency, mean reversion, and the way we measure risk and reward - not with opinions, but with data.

1 Unveiling The Retirement Myth - Jim Otar

Tag line: Advanced Retirement Planning Based On Market History read more


I discuss ways in which we can visualise and interpret the annualised return, also known as the compounded annualised growth rate or the CAGR and volatility of returns. Franklin India Prima Fund had a NAV of 201.75 on April 3rd, 2006 and a NAV of 878.5 on 12th April 2017. What is the annualised return?

To compute this, we first realise 11 years is the intervening time period - 11.033 to be precise. The annualized return is given by, read more


Concerned that the stock market is overheated? Then here is why it makes sense to focus on the risk associated with the money already invested and not worry about when to invest more. Suppose, I have a long-term goal and I can only spare Rs. 500 towards an equity SIP. I choose a nondescript mid-cap mutual fund and start a SIP for that amount in Aug 2009, switched to direct sometime in 2013 and kept SIPing. Today, the net annualised return (regular + direct)  would be about 23-24% and the fund will have a value of almost 1.1 Lakh. read more