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…
Continue reading →Has my earning capacity saturated?. Is this all that I am going to earn for the rest of my life? Do I need to erase some of my dreams because I am never going to earn enough in order to achieve those? These are some of the most unsavoury questions in personal finance. Most people…
Continue reading →When direct mutual fund plans were introduced, many ‘advisers’ said, they would not recommend direct plans because they will not receive feeds from the AMC (a fancy term for account statement) and hence cannot monitor portfolios. The truth was that they were looking for an excuse to justify the trail commissions they receive. Soon the…
Continue reading →In the second part 2, let us address the ‘kitna milega?’ with a little more analysis. The first part is here. Before we being to answer, what return one can expect, the objective of the study must be clear. We will be using past data to figure out, for a given duration (say 15 years), what is the average return…
Continue reading →Analyse mutual fund performance on year on year basis for the last 8 years with this tool. This is a modified version of the risk return analyzer where investments durations of 1 to 8 years were considered. In this version the duration is fixed at 1 year but it is rolled over. That is risk adjusted performance…
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