Answers to a frequently asked questions on investment returns. 1. What return does the moneycontrol portfolio manager calculate? It calculates the absolute return. That is the percentage difference = (value-investment)/investment. This does not represent how your money has compounded. Ignore it. Use Value Research portfolio manager to get XIRR returns (a measure of compounding when there…
Continue reading →Thanks to Narendra Bhongale, there is now clarity on when investors can invest online in MF Utility after getting the common account number (CAN) . He was kind enough to attach the response from the MFU team in his comment to yesterday’s post. It is reproduced as is, below. ~~~~~~~~~~~~~~~ Dear Sir, We thank you for…
Continue reading →Here is a set of illustrations that highlight the benefit of investing in direct mutual funds for your long-term goals. First some good news: MF Utility a portal in which investors can consolidate their holdings in different AMCs and invest in them with a common account number (CAN) will start operating from March. You can…
Continue reading →Every now and then, one can find an article that says, ‘should we teach financial literacy in schools?’, where the authors talk about the importance of power of compounding, investing in equity and all that sort of thing. Stuff like math and biology seem unimportant and dispensable to these authors compared to financial literacy. I think…
Continue reading →‘What is your definition of financial freedom?’, is a question I get asked by readers from time to time. Opinions and definitions in this regard vary widely and often a matter of convenience. Some call it financial freedom, some, financial independence, some early retirement! Here is my take on this subject. The following should have…
Continue reading →The automated stock analyzer now includes discounted cash flow valuation. The analyzer now has four methods: 1) Price Multiple Model 2) Sustainable Growth Rate 3) Book Value Growth Rate 4) Discounted Cash Flow First, I would like address a few issues faced by users while downloading stock price from MoneyControl. Let me assure you that…
Continue reading →The sooner you retire, lower the retirement corpus necessary for financial freedom!* * terms and conditions apply! Let us consider this counterintuitive aspect of retirement calculators in this post, which stems from Sudhindra Aithal’s comment on this topic in response to the low-stress retirement calculator. Let us consider a 30-year-old, Dagwood Bumstead who wishes to…
Continue reading →RBI surprised everyone by announcing a 0.25% reduction in repo rate (from 8%) yesterday. The market welcomed this news with a sharp rise. Several self-proclaimed long-term investors welcomed their prospective notional gains as enthusiastically as they despaired at their notional losses when the markets ‘crashed’ a few days ago Here is a perspective of ‘where…
Continue reading →This is a major update to the Excel Stock Analyzer. Company financial data is now automatically downloaded from Morning Star. and stock price history from Money control. Jignesh Acharya pointed out that there are issues with the Yahoo finance stock price downloader. Here are the main features of the analyzer This is a screenshot of…
Continue reading →Use this Excel tool to compare risk vs. reward in Indian stock investments. The index component of the stock price analyzer published yesterday has been removed to enable comparison between two stocks. The way I see it, this comparison tool can be used for any stocks irrespective of the sector they belong (unlike financial statements). Such…
Continue reading →Use this Excel sheet to analyze the risk vs. reward of investing in a stock in comparison with an index. The analysis is based on price history (adjusted for dividends, splits and bonuses) and is a spin-off the popular Mutual Fund Risk-return analyzer Two versions of the sheet are available: The ‘annual’ version in which risk…
Continue reading →MF Utility is a web-based transaction portal through which investors can invest in direct mutual funds offered by 25 (as of now) fund houses. Mr. V Ramesh, Managing Director and CEO of MF Utility, answers some common questions investors ask about the facility. This is the website of MF Utility: www.mfuindia.com Extract from investor page:…
Continue reading →Thanks mainly to personal finance bloggers, more and more individuals are recognising to the need to treat inflation as the benchmark for long-term goals. With this comes the inevitable realisation that investments that have an insurance component in them – endowment plans, money-back plans, traditional with-profit plans and market-linked ULIPs etc. are unlikely to help…
Continue reading →Each December, I conduct a personal financial audit. I take stock of my financial goals and other aspects of personal finance relevant to me. Last years audit can be found here. This year, as a forerunner to this post, I had written about how to conduct a personal financial audit and invited readers to conduct one themselves….
Continue reading →The Excel stock analyzer now has two spreadsheets based on Warren Buffett’s approach to stock valuation. The valuation sheets have been built from the ground up based on this article: Valuing Stocks the Warren Buffett Way The article mentions that more details can be found at: “Buffettology: The Previously Unexplained Techniques That Have Made Warren…
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