PlumbLine November 2017: a handpicked list of mutual funds

Readers may be aware that in September 2017 I had introduced a handpicked list of mutual funds and called it PlumbLine to accompany the freefincal robo advisory template. While we are still waiting for AMCs to fall in line after  SEBI announced its mutual fund classification rules, this month, I focus on simple ways to review a funds performance.

1: PlumbLine is a boring list of mutual funds. It will NOT change from month to month unless there is a significant change in the fund’s strategy or dip in performance or some other special situation. So please do not look forward to it. Also, there are plenty of good mutual funds that are not part of PlumbLine. If your funds are different, you are probably better off. Do not worry about it. read more

Freefincal Q & A: Should I worry about the PE of a mutual fund?

Each week, I try and answer generic questions from readers. Here is this week’s edition. You can use the form below to ask your question. The tougher the question, the more I learn and hopefully more the benefit for readers. This week we consider questions on the PE of a mutual fund, health insurance for parents, renting forever and more.

Sanjay: I came across your website and got a lot to learn. I would classify me as an informed investor. I am travelling next week so bought your book on Amazon so that i can read it in my spare time. Faced a tough question so thought of asking you. My senior citizen parents had a New India insurance policy of 1.5L cover each at a total premium of Rs. 11000. In addition to this my employer has a family floater of 5L, my wife’s employer has a family floater of 6L – both of these cover my parents. Also my mom is a retired bank employee so her bank’s retiree organisation has a group mediclaim of 3L floater (for both parents) for which they pay a premium of Rs. 15000 I understand that an individual mediclaim is required for parents in case i change my job, blah blah blah…, hence had kept their personal mediclaim active. However New India sent a letter saying they are closing their Mediclaim 2007 policy and it won’t be renewed. They are giving an option to migrate to their current Mediclaim policy at existing rates. Now I doubt all the 3 group mediclaims would terminate parallel. Does it make sense to buy a costly personal individual mediclaim for my parents ? Even if they make a claim, it will always go to one of our group mediclaims . So i don’t see them using their personal mediclaim. Senior citizen mediclaims from private insurers charge 25000 for a 2L senior citizen floater, which I feel is too high and if invested for 3-4 years would create a 2L corpus to be used instead of the personal mediclaim cover. Could you please send the link to the article where you answer my question? read more

Announcing “₹e-Assemble”: a video series to simplify money management

Dear reader, starting this week I would like to cover the basics of money management and goal-based investing for absolute beginners in the form a video series: ₹e-assemble. Each week I will discuss one step. The first step covered in this post is: goals, dreams and nightmares. Each step will take between 30 minutes to a couple of hours to implement. Assuming it takes about a week to implement each step, in about 1-2 months, your money management will become simplified focussed and on auto-pilot. As always I look forward to your support, encouragement and feedback. read more

How to invest a lump sum in an equity mutual fund?

“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.

Announcement 1: You Can Be Rich Too with Goal Based Investing, my first book is now available at at a 35% discount for Rs. 258. It comes with nine online calculators. Get it now. read more

Why Income Tax Hurts and Mutual Fund Commissions Don’t?!

Each financial year, we do our best to reduce as much income tax as possible. I am only referring to legal means (!)- the most common of which is investing in tax-saving instruments. We do this because income tax hurts. The thought of losing a significant chunk of our salary fills us with a sense of loss*. Why do most of us not feel that sense of loss while investing in commission-based (regular) mutual funds? Especially when investing via banks, demat accounts and via “free accounts”? If you are a direct fund investor, do consider forwarding this to a fellow investor who thinks “someone else” will the sales guys their commissions. read more