# Do not buy Gold ETFs because you need gold for your child’s marriage!

On occasions like Dhanteras and Akshaya Tritiya, AMCs and fund distributors advice you to start gold ETFs for financials goals like a child’s marriage.

For some reason, many around us seem to think that one must start investing in gold-ETFs because gold is needed for our children’s (typically daughters!) marriage. As a result, many end up buying gold ETFs for the wrong reasons.

While tactical advertising has a role to play in such purchases, it would be childish to blame those responsible.

# Mutual Fund Rolling Returns Calculator

Use this automated mutual fund rolling returns calculator to evaluate the consistency in performance of a mutual fund over any interval from April 3rd 2006 onward. You can compare results with benchmarks like Sensex, CNX Nifty, CNX Small-cap, and CNX Mid-Cap.

This version is a major improvement over the previous Excel Rolling Returns Calculator.  The analysis section also includes plots of the NAV with the index and rolling returns.

# Recurring Deposit Calculator: Annualized Yield

Annualized yield is a notion associated most often with fixed deposits.  Many of us do not realize that it could be used with recurring deposits as well.

It can be, and is used by many banks. FD yield though misleading, is at least correctly calculated.

I am very uncomfortable with the way RD yield is calculated and used by banks.  The value advertised seems to correspond only to the first monthly instalment and is therefore naturally high!

# Fixed Deposits: Annual Yield vs. Annual Interest

The difference between annual yield and annual interest and how it can be used to misrepresent gains from fixed deposits is discussed.

Let us face it, most investors are confused with the two percentages associated with a fixed deposit: annual interest and annual yield. Most people make the common mistake of assuming that the yield (often higher than the interest rate) is the  interest rate!

So let us try to understand what each term represents.

## Annual Interest:

If I invest Rs. 100 in a FD that offer 10% per year, my investment will grow to

• Rs. 110 at the end of 1 year
• Rs. 121 at the end of 2 years
• Rs. 133.1 at the end of 3 years.

If I want to represent this growth by a constant percentage, then I use the annual interest rate.

# Anecdote: The day the microphone voiced its protest!

Assume that I am speaking about ‘how to plan for retirement’ in a seminar (what were the organizers thinking!  Asking a nut job like me to talk!)

Let us say that more than half my audience consists of people (duh!) in their early 30s to mid 50s.

I go on and on about the factors one needs to worry about while planning for retirement and then suddenly say,

All that I have said is relevant only if your children will not take care of you’.