IRDA portability rules allow an individual to convert the group insurance cover offered by an employer to an individual policy from the same insurer. During the 6th Bangalore DIY investor meet (July 31st 2016), Mr. Srinivasan Sundarajan pointed out that he had made such a switch. When I requested him to recount his experience, pros and cons…
Continue reading →We had discussed Why the retirement corpus we need is so large in an earlier post. Using a retirement calculator for the first time can be a nightmarish experience. Many users have complained that the low-stress retirement calculator is low-stress before using it and high-stress after! I would like to think much of this stress is due to a lack of…
Continue reading →“If I have a lump sum, what is the best way to invest it in an equity mutual fund?”, is a question that I am asked repeatedly. In this post, let us discuss simple ways to invest a lump sum in an equity mutual fund. Lump sum in a debt mutual fund Let us first get…
Continue reading →Here is a list of SEBI-registered fee-only financial planners (investment advisors) in India. The advisors on this list charge a flat fee for financial plan creation and advisory and do not receive commissions/incentives from mutual fund houses, insurers or other financial product sellers. Unbiased financial advice is provided without conflict of interest. These are flat-fee…
Continue reading →The expense ratio of direct mutual fund plans is a subject of debate among those who do not benefit from it. In this post, Balaji Swaminathan digs deep into the annual reports from three AMCs to understand how the expense ratios compare and whether the absence of commission is the only reason for the lower expense ratio…
Continue reading →In this post, let us discuss mutual fund exit strategies. In particular, the oft asked question, “when should I exit an equity mutual fund”. It is obvious that in order to know when to get rid of a mutual fund, one should know how to review a portfolio of fund holdings. In an earlier post…
Continue reading →Have you ever wondered how the total expense ratio (TER) of a mutual fund is calculated? Or what the constituents of the TER are? The most authentic publically available source for understanding the TER is the annual report released by AMC. Yesterday, Franklin Templeton announced to its investors that the abridged annual report for 2015-2016…
Continue reading →Here is a list of important terms, conditions and limitations to keep in mind before you decide to port your health insurance policy to another company. Come this September, health insurance portability would be 5 years old! Yet, it is not an easy process to shift a health cover from one insurance to another. It never…
Continue reading →The correlation between the Nifty PE and long-term bond yield (10-year GOI bond) is discussed in this post. I had earlier considered the relevance of the Nifty PE for the long-term investor and misconceptions about the Nifty PE. A few days ago, I had asked, what is a high index PE?. There were two interesting comments by Deep and Kamal…
Continue reading →Emotional spending refers to the instinctive disbursal of money and time at the cost of physical and/or financial health. Decisions are made in order to “feel better” without thinking about consequences. Without sitting in judgement on whether this is a good or bad, here are some thoughts on the subject. It is fashionable to say that…
Continue reading →Use this sheet to automatically track the XIRR of your mutual fund SIP month by month and compare its performance with a benchmark index. In this updated version, the Nifty strategic indices have been included for comparison. The sheet includes a ‘cumulative outperformance’ feature. This gives you the no of times the fund has out-performed its index…
Continue reading →Many of us have trouble understanding how the growth of volatile instruments like equity, bonds gold or even real estate can be quantified. We come across many terms like CAGR, IRR and XIRR in this context. In this post, the similarity and differences between the CAGR (compounded annualised growth rate) and the IRR (internal rate…
Continue reading →It is important to diversify a portfolio, but it is even more important to understand that diversification will typically lower portfolio return and not enhance it! Technically, diversification is for risk reduction,or to be precise – reduce the daily ups and downs in the portfolio value (aka volatility). However, volatility reduction almost always results in return…
Continue reading →So, you have term insurance, health insurance, emergency fund, understand the need to beat inflation and have started investing towards that. Congratulations, you have reached the base camp! The summit still has to be climbed! Here are some ways to take money management to the next level. In the recently concluded Chennai investor discussion meet,…
Continue reading →When the markets start to move for a few days, investors tend to look at the index PE to check if the market is overvalued or not. Before we caution ourselves (and others) about ‘high PE’ levels, it would be quite instructive to pause and think about the historical evolution of the index PE . Before we…
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