In this post, I describe a visual tool for analysing mutual funds and portfolios, referred to as fingerprinting by its developer,Jim Otar, a Canada-based financial planner. I thank Swapnil Kendhe for bringing this method to my attention. As the song goes, ” I get by with a little help from my friends”. I have developed…
Continue reading →Here are a few perfectly relevant and ‘good’ questions in personal finance or money management with arbitrary answers! In my opinion, the following questions are distinctly different from those that seek the best insurance or investment products to buy. There are right questions to ask, the answer cannot be based on a formula. First some book…
Continue reading →Dear reader, I am pleased to announce that my new book co-authored with P V Subramanyam (subramoney.com) is now available for pre-order. The book is titled: You Can Be Rich With Goal-based Investing. What is the objective of the book? The book is Subra’s vision and conceived a few years ago. In fact, in his very…
Continue reading →“Risk comes from not knowing what you’re doing” is one of the many famous Warren Buffett quotes. Risk also comes from an inability to apply context to a (WB) quote! For example, Mr. Buffett has repeatedly stated that volatility and risk are very different from each other. Statements like these have been used to mis-sell and…
Continue reading →When returns fluctuate wildly it is important to not only measure ‘average’ return (CAGR or XIRR), but also to measure risk – that is, quantify the fluctuations. The simplest way to do it is to calculate the standard deviation and best non-technical illustration of the same is from Subra: Rahul Dravid’s individual score will typically be…
Continue reading →The freefincal mutual fund screener on Google Sheets is now available with 1,3,5,10,15 and 20-year SIP returns data from Value Research. This is an independent screener which complements the previously published Freefincal Mutual Fund Screener- Google Sheets Edition (call this SCR1) which is based on 12-year annual returns and 1,2,3…12 year CAGRs. So SCR1 is based on lump sum…
Continue reading →The government announced the interest rates for small saving schemes yesterday and surprising or should I say unsurprisingly, the interest rates of many schemes, especially the long-term ones like PPF and Sukanya Samriddhi are still too high! Why is the government not sticking to policy? If you are surprised by the title in spite of…
Continue reading →This is a guest post by S R Srinivasan, who is one of the most erudite users of freefincal. I had the pleasure of interacting with him twice at the Bangalore investor workshops. He talks about money management and growing wealth to new employees in his company and he kindly agreed to describe his approach and…
Continue reading →When Dilbert cartoonist Scott Adams could not find a publisher for a one-page book on “Everything you need to know about financial planning”, he was forced to write a 368-page book – Dilbert and the Way of the Weasels. (Ref: MyMoneyBlog) You don’t even need a page to hold all the advice that Adams gives. All…
Continue reading →Sometimes purchasing an annuity is the best option for senior citizens (or someone in the late 50s) and sometimes it is the worst decision. This is a discussion on when to buy an annuity and when not to buy (at least immediately upon retirement). An annuity or a pension product is one in which a lump…
Continue reading →The idea of a risk premium is one of the most important investing concepts essential for those who invest in volatile assets and those who shun them as too ‘risky’. The definition of a risk premium is fairly simple. If a risk-free instrument offers say 7% return, what is the return I should expect for the…
Continue reading →A simple way to measure how consistent a mutual fund has been in outperforming a benchmark over a given period, in the form a simple percentage is discussed in this post. Depending on your feedback I will include this in this months mutual fund return listings. The simplest and most intuitive way to measure outperformance is…
Continue reading →A discussion on the differences between dynamic mutual funds and balanced mutual funds. Exploring this topic is a nice way to understand some portfolio management basics. Thanks to Arun for asking this question when I suggested that dynamic equity funds are not for those who wish to chase returns. First, we need to define some…
Continue reading →Choosing an appropriate benchmark for balanced mutual funds has always been a problem for the retail investor. In this post, I propose a new and more importantly accessible benchmark for equity-oriented balanced mutual funds – ones that do not use arbitrage opportunities or derivatives. As always, I make no claim about the superiority of my…
Continue reading →There are many who believe that cashless hospitalization facility available with medical insurance policies can be misused by hospitals and that it is better to pay cash and the reimburse it via the policy later. A discussion on should I use cashless hospitalization facility or pay and then reimburse? What does misuse mean? Attempting to exhaust the…
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