An SWP or a systematic withdrawal plan is the lesser-known cousin of the SIP. In an SWP, an investor would receive a specific sum at periodic intervals (monthly, quarterly etc.) from a lump sum invested in a mutual fund. Here is an SWP calculator with a step-up option. Although I am not a fan of the…
Continue reading →Use this Excel-based template for creating an amortization schedule for your home loan. It allows you to visualize the monthly and yearly evolution of interest and principle components and the balance of the loan. It can accommodate regular (monthly, quarterly, bi-annual and annual) and irregular (random months) pre-payment schedules. It can also handle a loan…
Continue reading →Life insurance, health insurance, accident insurance and critical illness insurance are tailor-made fortification products that help a family tackle unpleasant and unexpected developments. Be it expenses due to hospitalization, or loss or decrease in income due to death, accident or a critical illness. I refer to them as fortification products because they protect the families…
Continue reading →Use this rolling standard deviation calculator to evaluate the volatility in returns of a mutual fund. This is an idea that struck me during the Chennai investor meet in response to a question. The sheet calculates the rolling return and rolling standard deviation for a specified interval. For equity funds, the rolling standard deviation of…
Continue reading →A little more than seven years ago, my expenses dropped to ‘normal’ levels after my father passed away (post a prolonged battle with cancer). I had been in a regular position for less than two years then and was taking stock of my cash flow and investible surplus (money net of all expenses). Immature me,…
Continue reading →The physics PhD students of IIT, Madras invited me to speak on the rudiments of personal finance in their weekly meet on Oct. 24th. Here is a transcript of the talk. Since I spoke impromptu (following an outline!), I cannot reproduce everything that I said, but will try to list the important points covered. Was…
Continue reading →When I posted a checklist for DIY investors: What it takes to do your own financial planning, Ashal Jauhari had the following to say. I would like to think he gave vent to his frustrations (about time too!): “Dear Pattu Sir, I’m in DIY mode. Please tell me the BEST Term plan and the BEST…
Continue reading →Use this rolling returns calculator to compare the consistency in performance of one mutual fund with another. When you have shortlisted two funds and are not sure which one to choose, this tool along with the Fund A vs. Fund B Risk and Return Analyzer can be used to choose one fund. For those who…
Continue reading →Buying a term life insurance policy based on an insurers claim settlement ratio (CSR) is a meaningless exercise. All it does is offer psychological comfort to the buyer who refuses to understand that each death, and therefore each claim settlement is unique. When a nominee applies for a claim, the insurers CSR is irrelevant. That…
Continue reading →R. Balakrishnan is a person of great renown in the banking and financial services space. He helped set up CRISIL and the Malaysian credit bureau, was head of equity research at DSP Merrill Lynch, executive vice president of Edelweiss, to name just a few. He is now an organic farmer, writes a blog and has a column at MoneyLife….
Continue reading →In this post, let us compare two large cap funds from the same fund house. One a consistent performer with a terrific track record and the other a young superstar. The results will hopefully show how herd instincts among investors (and perhaps amcs and therefore(?) intermediaries too?) can obscure good funds from the same fund house….
Continue reading →In the first part on why you should ignore mutual fund star ratings, I had stressed on the importance of focusing on our portfolio health and performance of the fund with its benchmarks. In this post I would like to add a couple more reasons to strengthen the argument. Let us assume that an investor named Tom has chosen…
Continue reading →‘Should I choose only five star rated mutual funds?’, ‘Should I switch funds each time my funds rating is downgraded?’. These are extremely common questions among mutual fund investors. In this post, let us discuss how star fund ratings are irrelevant to the goal-based investor. Any action, buy, sell, hold, switch etc. should be based on…
Continue reading →Track the monthly growth of your retirement corpus with this Excel sheet. The user will have to first use the retirement calculator. The inputs of this sheet are used for tracking the corpus each month. The monthly investment made in equity (stocks or mf) taxable debt tax-free debt any other instrument should be entered by…
Continue reading →It is raining closed-ended mutual fund NFOs. Here is why one should avoid this category of mutual funds. There are many articles that describe the features of closed-ended mutual funds. Therefore, I will not mention them here. Let us focus on the titular suggestion alone. 1) The first and foremost rule of purchasing – be…
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