What factors should we consider before choosing a mutual fund or evaluating a mutual that we hold? Should we only look at star ratings? Should we consider only returns? Risk-adjusted returns perhaps? Should we track the actions of the fund manager? Should I understand the kind of stocks that he/she has picked or is likely…
Continue reading →On Aug. 25th 2014, the Economic Times carried an article titled, PPF investment can beat Sensex returns over 20-year period. They showed that between Aug. 1994 to Aug. 2014, Sensex returned an annualized return of 9.15% while the PPF returned 10.46%. Needless to mention this article created a lot of buzz among investors and distributors. Investors panicked and…
Continue reading →We choose a type of instrument almost solely based on the kind of returns that it can yield. Thus, our expectation is governed by past history. While there is nothing wrong with this, past returns can vary quite a bit, and depends on the period chosen for evaluation. While it is a good idea to base…
Continue reading →Here are ten questions that every investor should answer. I have inserted links to relevant posts for some questions. If you are DIY investor or intend to be one, ask yourself these questions. If you have engaged a financial planner, ask these questions to the planner . If you have any suggestions that would help…
Continue reading →Every so often one hears the passionate refrain, ‘I have been conned into buying XYZ policy by my agent/adviser/relationship manger …., what should I do?, … how can we complain against such mis-selling?’ Do such people deserve our sympathy? Have they been mis-sold a policy or a product? Who is to blame? The buyer? The…
Continue reading →A real estate investment trust (REIT) is like a mutual fund that invests in property. Here is why I think REITs are not suitable for goal-based investing. I know very little about how REITs work and I have sourced my information primarily from three articles. If you wish to understand, how REITs work, check this…
Continue reading →Here is a risk vs. reward analysis of debt mutual funds. This is a companion post to: (Equity) Mutual Fund Investing: Risk vs. Reward vs. Volatility and The key to successful mutual fund investing All the posts are based on Value Research Online’s fund selector page. First some definitions. Average Maturity A debt mutual fund holds debt…
Continue reading →I wrote a guest post for Avadhut Nigudkar’s website, financewalk.com aimed at financial career aspirants. The monthly financial tracker I have been using for the past 6 years was modified to include the goal analysis sheet from the automated mutual fund tracker The sheet allows you to keep track of investments for financial goals as well as…
Continue reading →Here is a simple goal planner that serves as a visual aid to highlight the importance of beating inflation for long-term financial goals. It compares the evolution of the current cost of an expense with an assumed inflation rate and the growth of monthly and lump sum investments. The monthly or lump sum investment along with…
Continue reading →Here is a simple Excel sheet to keep track of monthly SIPs. Unlike the automated mutual fund tracker, where the focus is on returns, this sheet helps to visually track the growth of a SIP relative to an expected growth. The user will have to enter the value of SIP each month to track its…
Continue reading →The first brush with a retirement calculator is typically memorable, if not unforgettable(!) for pretty much all investors – including ones who do not take them seriously. The typical responses would be, ‘Why do I need such a huge corpus for retirement?’ ‘How do you expect me to invest this high an amount each month?’…
Continue reading →LIC agents are busy advertising the Varishtha Pension Bima Yojana. An annuity product which would hand out a ‘pension’ against a lump sum payment at an annual return of a little more than 9%. Here is why you should not consider any pension product at face value. The pension received is typically constant for life. If…
Continue reading →Last month I had posted a stock price downloader from the BSE website. Jatin Visaria pointed out that if the price is not adjusted for corporate actions bonuses, splits and dividends, the data is not useful for analysis. Krishna Kishore pointed out that Moneycontrol lists historical prices adjusted for bonuses and splits. I thank Krishna…
Continue reading →While planning for retirement, we encounter several rates: rate of return before and after retirement rate of inflation before and after retirement While calculating the corpus required and the monthly investment required, we assume these rates are constant for each year before retirement and during retirement. In reality, all these rates can vary quite a…
Continue reading →A discussion on why one should not mix insurance and investment and buy pension plans, endowment plans, moneyback policies or even ULIPs. As far as regular freefincal readers are concerned this post is preaching to the choir. Most of you guys know and understand why insurance and investment should not be mixed. Annoucement: My second book, Gamechanger: Forget Start-ups,…
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