The government has announced premature closure norms for PPF accounts. This includes a rather harsh retrospective penalty which is illustrated in this post. The order was passed on 18th June 2016. Thanks to Basu(nivesh.com) for pointing this out. When can a PPF account be closed prematurely? In Feb. 2016, a circular said, “Premature closure of…
Continue reading →We all understand the importance of living within our means and strive to implement it on a day-to-day basis. If the Indian government manages to do the same over a financial year, it would grab headlines! When I heard about the term fiscal deficit (expenditure > revenue) for the first time, I was shocked to…
Continue reading →Here is a guide to investing in the National Pension System (NPS) with suggestions for existing and potential individual, corporate and government subscribers. Over the past few years, the government has tried hard to make the National Pension System popular. First, it used the magic phrase tax-saving by allowing an additional 50,000 invested in Tier 1 to be discounted from…
Continue reading →The charges associated with a Unit linked Insurance Plan (ULIP) can significantly impact the returns from the policy. A two-part discussion on ULIPS: first how charges reduce returns and then a category-wise study of ULIP returns and how to compare them with mutual funds. This post is entirely due to an interesting thread started by Guru…
Continue reading →Tracking gold-price movements in terms of USD and INR is a simple, but intuitive way to understand the strength of our economy. Here are some observations from staring at the historical gold price movement in USD and INR. The domestic price of gold, that is INR is the equivalent price in USD times the exchange rate….
Continue reading →Health insurance policies offered by banks in association with health insurers are game changers in terms of cost. However, the terms and conditions of these policies could be quite different from the individual health plan, or the floater health plan available directly from the insurance at a higher cost. Before you buy a group health…
Continue reading →This is a major update announcement to the guest post by Karthikeyan Chellappa. He has created a neat PPF calculator which can be used to 1) calculate maturity value for fixed, monthly, Quarterly, half-yearly or annual investment or 2) calculate fixed investment requires for a required maturity value. He was generous enough not to password protect…
Continue reading →Here is what you should know before buying sovereign gold bonds either in the primary market (when the next tranche is released) or secondary market (1st tranche issued in Nov 2015). In my opinion, there is only one thing that someone buying paper gold should know: just how volatile returns can be!! The fin min says They…
Continue reading →Here are some common misconceptions about frugality and frugal folk. What is frugality? Wikipedia makes a wonderful reference to a behavioural science research paper titled, “Lifestyle of the Tight and Frugal: Theory and Measurement” The authors state, “Frugality is conceptualised as a lifestyle trait reflecting disciplined acquisition and resourcefulness in product and service use. Frugality…
Continue reading →It amuses me no end when financial advisors say, “do not do-it-yourself (DIY), find an advisor”. Simply because if I choose to delegate my money management to an advisor then I will have to find one first. Repeat, I will have to find one first! Meaning it requires DIY skills to search for an advisor. It requires…
Continue reading →The Omega ratio is an interesting performance evaluation metric that can be used for evaluating a mutual fund with its benchmark and also compare funds. In this post, I present a simple, non-technical description of the omega ratio along with some examples. The Omega ratio has been part of the mutual Fund risk vs return analyzer since…
Continue reading →Have you ever wondered what drives stock market returns? Is it linked to the GDP? Is it related to company earnings? Elections? RBI policy decisions? In this post, I list the findings of several studies which have attempted to ask the same question. This is a followup to the last three posts: Why should I…
Continue reading →“Why should I invest in equity if it comes with no guarantees?!” A mighty fine question wouldn’t you say? In this post, I discuss the nature of stock market returns and why despite the lack of guarantees, it still a necessary investment avenue for some. First of all, let me make it clear that I am…
Continue reading →The basic ideas behind how to manage a personal portfolio are discussed with a focus on the appropriate benchmarks for taking action. Reactions to yesterday’s post, A Mutual Fund SIP is Hope, Not a Strategy!, revealed a disturbing aspect of how many investors approach mutual funds. They are not interested in the inconvenient truth that a…
Continue reading →Too many investors believe that keeping their SIP alive and running over the ‘long-term’ is all that is needed to get ‘good returns’ from equity and achieve all their financial goals. Now that might happen in a fairy tale, but not in real life. In real life, the SIP is a method of buying mutual…
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