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Stress Test Your Retirement Plan

While planning for retirement, we encounter several rates: rate of return before  and after retirement rate of inflation before and after retirement While calculating the corpus required and the monthly investment required, we assume these rates are constant for each year before retirement and during retirement. In reality, all these rates can vary quite a…

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Here is why you should not mix insurance and investment

A discussion on why  one should not mix insurance and investment and buy pension plans, endowment plans, moneyback policies or even ULIPs. As far as regular freefincal readers are concerned this post is preaching to the choir. Most of you guys know and understand why insurance and investment should not be mixed. Annoucement: My second book, Gamechanger: Forget Start-ups,…

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Illustration: Generating inflation-protected post-retirement income

Given a lump sum, how does one generate an income from it? How do we tackle inflation in retirement? Not too long ago, I was under the impression that such questions are asked only by senior citizens.  I soon realized the problem is extremely common. Many children are trying to optimize income from their parents retirement…

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The key to successful mutual fund investing

‘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…

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Relevance of the Nifty PE for the long-term investor

Ever since I introduced the concept of SI-PE (PE based SIP investing) in the post, ‘Are Mutual Fund SIPs Suitable for Disciplined Long-Term Investors?‘, I have been worried because it instantly struck a chord with many readers. SI-PE refers to manual investment based on the PE value of an established index. If the PE is greater than…

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Portfolio Diversification: Correlation among Stock Sectors

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…

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