Any selection process should have three components: (a) an objective; (b) a method to create a shortlist and (c) a method to finalize with the shortlist. Yesterday we discussed the objective. Today we shall consider how to create a shortlist from which an equity mutual fund can be selected. If you have not read yesterday’s…
Continue reading →Over the next few days, I would like to do a series on “How to select an equity mutual fund”. This is the long overdue update to the step by step guide to mutual fund selection. I write this primarily because my understanding about mutual funds has grown significantly since I wrote the pdf guide. I…
Continue reading →Here is how people react when they use a retirement calculator for the first time. Fear! Most online calculators do not allow you to increase the investment amount each year. So I made one for myself and punched in the numbers. The results scared the living daylights out of me. I sent the sheet to Subra…
Continue reading →Perhaps, “what should be the role of a fund manager?” is a more appropriate question. In an interview to Cafemutual, Mirae assets fund manager, Neelesh Surana said, “The challenging part (of being a fund manager) is the pressure of generating superior performance vis-à-vis markets and peers. The pressure of getting it right consistently is always there”….
Continue reading →Upside and Downside capture ratios are two easy-to-understand measures used to analyze performance of a volatile instrument. I had earlier written a post on how to use them for mutual fund analysis. Suggest you it along with this post: Simplify Mutual Fund Analysis with Upside/Downside Capture Ratios The explanation provided there is quite oversimplified. In…
Continue reading →Dynamic bonds are debt mutual funds with a flexible investment strategy. There is a perception that they funds can be used to take advantage of interest rate movements to maximise gains. Unfortunately, these funds do not reward investors enough for the effort and risk involved in its investment strategy. Which is why I believe that…
Continue reading →Many people ask, “how much should I save each month from my salary?”. They are not looking for ‘dumb’ answers like, “invest as much as possible”;”use a retirement calculator and goal calculator to find out”; “have you thought about financial freedom in future?” They are looking for a nice low percentage like 10%, preferably 5%,…
Continue reading →Automatically analyze stocks and determine their intrinsic value or fair value with this Excel sheet. The analyzer pulls financials from morningstar, adjusted stock price from money control and calculates intrinsic value five different ways! 1) Price Multiple Model 2) Sustainable Growth Rate 3) Book Value Growth Rate (Buffett’s approach to valuation) 4) Discounted Cash Flow (DCF) Thanks…
Continue reading →Balanced equity funds or equity-oriented balanced funds are those with min 65% equity exposure so that they can be classified as equity funds by the taxman. The rest of the portfolio (35-25%) has debt securities (gilts, corporate bonds, money-market instruments etc.). Here is why I think these funds can match the returns of diversified equity Here…
Continue reading →A few days ago, I had asked in Facebook group Asan Ideas for Wealth, “If you could gaze through a crystal ball and look into your future portfolio at a time when you are just about to retire, what net return from equity (assuming you are left with some!!) would you be happy with?” The…
Continue reading →SEBI is a trigger happy regulator. In its desire to help investors, it seems to have thrown a spanner in the works . The actual benefit to the investor from many of its diktats pales in comparison to the havoc created in the financial services. Here is why aspiring to become a mutual fund distributor today…
Continue reading →I had a chance to speak to the employees of a Hyderabad based mobile tech company. I wanted to build that talk around the terms of references needed for money management. I could think of three crucial objectives: insurance inflation peace of mind I was able to cover the first two points but could not get…
Continue reading →So the indices fell the sharpest yesterday in recent memory. So the Sensex rose by 19% in the last year, but much of it was in the first 6 months. For in the last 6 months, the index fell by about 4%. Six months of a sideways market! oh my! oh my! Is this it? Is…
Continue reading →We all woke up to the shocking news yesterday that Parah Parikh died in a car crash in the US on Sunday (May 3rd). He was not wearing a seat belt. His wife was wearing one, but still sustained serious head and chest injuries and is critical. Yesterday afternoon, the PPFAS management sent an email…
Continue reading →Stop asking for fund suggestions already! Learn how to shortlist funds and have the confidence to pick one! Free lunches will cause serious injuries to your financial health. It is so frustrating and disappointing to see people ask for mutual funds suggestions publicly. It has finally dawned on me that responding to such questions in…
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