Last month I had posted a stock price downloader from the BSE website. Jatin Visaria pointed out that if the price is not adjusted for corporate actions bonuses, splits and dividends, the data is not useful for analysis. Krishna Kishore pointed out that Moneycontrol lists historical prices adjusted for bonuses and splits. I thank Krishna…
Continue reading →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…
Continue reading →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,…
Continue reading →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….
Continue reading →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…
Continue reading →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…
Continue reading →In the previous post in the ‘young earner’ series, I had listed down a set of personal finance essentials. Two points appear to have caught the eye of many readers. Do not open a PPF account Do not start a SIP in an ELSS fund In this post I would like to expound on the…
Continue reading →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…
Continue reading →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…
Continue reading →‘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…
Continue reading →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…
Continue reading →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…
Continue reading →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…
Continue reading →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…
Continue reading →Survival is a human instinct. The memorable line from Jurassic Park, “life will find a way!”, is relevant not only to all living organisms but also to pretty much everything that we humans do. Diversification in general, is something that we do by instinct. We do not fill our wardrobes with only cotton-wear or with…
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