Many Investors, especially senior citizens, who purchased long term gilts funds (or their cousins, dynamic bond funds) after seeing recent double-digit returns, are puzzled and even worried about why these funds are falling since the last three months. In this post, I discuss the reasons behind this and how to make sense of debt fund…
Continue reading →Freefincal has two automated stock analysis and valuation spreadsheets. One that obtains financial data from screener.in and another which obtains financials from morningstar. Both sheets also get stock price data from moneycontrol. This is an important update to both these modules due to a change in moneycontrol web layout. Thanks to swanand pointing this out. Before…
Continue reading →The systematic transfer plan (STP) is a way for an asset management company to lock into some “business”, just as jewel shop does with a “gold scheme”. It can be used to withdraw from one mutual fund to either generate regular income or transfer that money to another fund (typically equity) in the name of “reducing risk”…
Continue reading →The official inflation numbers, be it the consumer price index or the wholesale price index have little or no relation to how much our expenses increase each year. The main reason for this is because the cost of labour/services is not regulated or calibrated. Here is a personal inflation calculator that can help you understand how…
Continue reading →Now, why stop at one crore? Make that a Ten Crore Cheque. If you are wondering whether you have landed at the wrong site or if something is wrong with me, not to worry. I am not any more mentally disabled than I was yesterday, and you are at freefincal. Allow me to explain. How does…
Continue reading →In this post, I discuss why it is a terrible idea to shift your EPF corpus to the NPS (National Pension Scheme). In a circular dated 6th March 2017, the Pension Fund Regulatory and Development Authority (PDRDA) announced a road map for provident fund and superannuation plan subscribers to shift to the NPS. The shift…
Continue reading →Technological advances in the past 25 years have reduced information access time from days/hours to seconds. However, our ability to process this information has not changed much and if anything, has only decreased due to an information-excess. Yes, most of us are addicted and slowly drowning in information that we practically have no use for. …
Continue reading →It is unfortunate that mutual fund dividends are among the least understood aspect of mutual funds. They are often used when unnecessary and without understanding tax implications. In this post, I discuss when mutual fund dividends make sense and when they do not. The first step is to understand that a fund declares a dividend…
Continue reading →Dear Reader, This is a pdf collection of 26 posts on debt mutual funds written over the past 4 years. I enjoyed learning and writing about every bit of this fascinating space in finance – tradable fixed income. Debt mutual funds are not exactly easy to understand, but I believe they are not hard to…
Continue reading →Benjamin Franklin wrote in 1748 that Time is Money in a note titled “Advice to a Young Tradesman”. This can be used in multiple ways and in this post, I use it to explain an important idea known as the Time Value of Money. Shall try to follow it up with other examples in future posts. Journalist…
Continue reading →Why blame Value Research For awarding Taurus Liquid Fund that is in trouble for continuing to buy a near-junk bond (Ballarpur Industries), five stars (four stars when commissions are removed)? That is like blaming someone because they could not predict a market crash! Before we go any further, it is important to recognise that many…
Continue reading →The incredulous 7% fall in the NAV of Taurus Liquid Fund due to a credit rating downgrade has many worried. Can investors avoid such funds? Is this a “small amc” problem? Is this a small aum problem? I thought liquid funds were safe! Just a sample of how many investors feel. In this post, I…
Continue reading →Here we go again! Yet another AMC has been caught on the wrong foot with one of its bonds downgraded in value. This time it is Taurus Mutual Fund which held at least 65 crores of Ballarpur short-term bonds in four of its funds. In what was a probably a first for the Indian industry, Taurus liquid…
Continue reading →There are two main risks associated with a debt mutual fund: capital losses due to (1) an increase in interest rates since old bonds are not as valuables as new bonds that offer higher rates; (2) an actual default in the payment of interest or the possibility of default. In this post, I shall introduce a…
Continue reading →Investors who wish to give debt mutual funds a try often find that they are more difficult to understand than equity mutual funds 🙂 Who would have thought a fixed income product (a bond that offers regular payments like a fixed deposits) would be so hard to understand the moment it can be traded to…
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