The most important input while planning for a financial goal is the current cost of the future expenditure. When the goal is several years away, the current cost is a crude estimate. For retirement, we can assume present lifestyle barring child’s education expenses and liabilities. For a Ferrari, we can enter the current cost. For a…
Continue reading →Claim settlement ratio does not matter anymore from 2015 if your life insurance policy is at least 3-years old because IRDA has amended the section 45 of insurance act such that any life insurance policy which is at least 3-years old cannot be denied claim “on the ground of misrepresentation or suppression of a material…
Continue reading →Here is why one should not buy the sovereign gold bonds which are on sale from Since Nov. 5th 2015, despite the sovereign guarantee and the 2.75% interest rate. From today (5th Nov. 2015), Sovereign gold bonds will be available for subscription at an issue price of Rs. 2,684 per gram. Subscribers can buy bonds which…
Continue reading →The automated stock analysis Excel sheet (version 8) now calculates thePiotroski Score for the last 9 financial years for Indian stocks. In January 2002, Prof. Joseph Piotroski wrote a paper titled, Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers which detailed a method of buying stocks based on 9 balance sheet…
Continue reading →Mutual fund downside protection refers to instances when the weekly or monthly or year return of the fund is better than its benchmark, when the benchmarks corresponding return is negative. For example, suppose a fund gives a monthly return of -10%, when the benchmark has given a return of -15%. The fund has only captured 67%…
Continue reading →Should NRIs Invest in the National Pension Scheme? A discussion on why the National Pension Scheme (NPS) is not a good option for NRIs to invest in. RBI has allowed NRIs to invest in the National Pension Scheme. While such a move would be beneficial for the country, I don’t think investing in the NPS is…
Continue reading →How important is it to select a ‘good’ mutual fund for investment? Although I have written step-by-step guides to select equity and debt mutual funds, ‘does fund selection matter at all’ is a question that has often bugged me. What if I chose funds randomly for investment?! In this post, let us consider the effects…
Continue reading →ICIC Amc launched a new feature called ‘moneyback’ in its ICICI Balanced Advantage fund. Here is why retirees or young investors should not choose the moneyback feature of ICICI Balanced Advantage fund. The moneyback feature is a terribly misleading term for a Systematic Withdrawal Plan or a SWP (check out a Step-up SWP Calculator). A SWP is the…
Continue reading →A method to analyse mutual fund performance during a particular investment duration in terms of consistency of returns is discussed in this post. Many mutual fund investors are unable to rationally analyse the performance of their equity mutual fund holdings and often ask, When should I exit an equity mutual fund?. I would like to suggest…
Continue reading →Here is a Stock SIP Calculator for Indian stocks. It can be used to determine returns (XIRR) and monthly variation in returns since January 2000. ‘Can one do a SIP in stocks?” is a question many youngsters often ask. The reason they ask is obvious. The amount of capital at their disposal is small and they…
Continue reading →When questioned about his opponents style and technique, Mike Tyson is supposed to have said, “Everybody has a plan until they get hit. Then, like a rat, they stop in fear and freeze.” Soon, people who recognised the power of this quote embellished it to the title of this post. A look at how relevant…
Continue reading →Here is how all NPS subscribers, including state and central govt. subscribers can make online contributions to NPS. This is post is meant for existing individual, corporate and government subscribers and is not a recommendation to invest in NPS. If you have an existing account with valid PRAN no (permanent retirement account number), you can, Go…
Continue reading →It is inevitable that any activity governed by human behaviour has similarities in the core approaches regardless of associated area or discipline. Investing is no exception. During the Pune workshop, when I said, “the returns of an asset class is not the same as the returns of an investor”, Ashish Deshpande in the audience remarked,…
Continue reading →Asset allocation or the percentage allocation to different asset classes in a portfolio is probably the key aspect of investing. Not only does it determine the corpus that we would accumulate, it also determines the volatility associated with the portfolio. Update: The template has been merged with Freefincal Robo Advisory Software Template. Those who start investing…
Continue reading →Here is a National Pension Scheme NPS Calculator for government, corporate, and individual subscribers in Excel to enable better understanding of how the scheme works. For government subscribers, the asset allocation is fixed: 15% in equity (E) and rest in fixed income (allocation to G – government bonds and C – corporate bonds is not known) The…
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