In this article, we discuss a simple tactical entry and exit strategy for small cap mutual funds based on how expensive they are compared to the Nifty 50. The aim is to reduce the risk of investing in a small cap mutual fund. Before we proceed, several warnings, disclaimers and caveats should be disclosed. Unless…
Continue reading →A reader says, “Dear Sir, you have convinced us with clear data that most active funds cannot beat the index and that index funds are the way to eliminate high fees and fund manager risk. However, does this mean index investing is risk-free? Are there any risks with index investing? Kindly elaborate with an article”….
Continue reading →A reader says, “Thank you for the fantastic new tax regime vs old tax regime calculator for FY 2023-2024 (AY 2024-2025). It is really easy and useful. Currently, the new regime is beneficial for me. Can I switch back to the old tax regime if I wish to buy a house in future?” The old tax…
Continue reading →This index fund screener is based on tracking error and returns difference wrt benchmarks (aka tracking difference). The screener will help users evaluate how efficiently an index fund has tracked its underlying benchmark. It will also help to understand how tracking a midcap index or the Nifty 100, 500 differs from tracking the Sensex or…
Continue reading →A 35-year-old reader asks: “I would like to get Rs. one lakh a month pension when I retire. How should I invest to achieve this?” A pension after retirement is a necessary component of a post-retirement investment portfolio. However, it is not sufficient. Nothing beats the comfort and security of a guaranteed pension payout each…
Continue reading →In this article, we explain in simple terms what a mutual fund stress test is and what investors need to appreciate while investing in mutual funds, especially small cap mutual funds. If you have not seen the movie Margin Call, I strongly suggest you do so after reading this article. You could appreciate the situation…
Continue reading →Ask in any personal finance forum, “Can I invest in XYZ NFO?” there would be an immediate refrain, “Never buy NFOs!”. Context is often the first casualty in such a forum, and this response is no different. All mutual funds carry a past performance disclaimer – past returns do not indicate future returns. Then why…
Continue reading →A reader asks, “At what percentage of networth can I stop contributing to Emergency Funds and include it in my debt allocation for goals? For example – I use a liquid fund and an arbitrage fund for emergency funds. And I use a gilt fund as debt allocation for my retirement goal. When can I…
Continue reading →This article explains how the co-payment (co-pay) clause works for health insurance policies. It originates from an email exchange with a reader about base policy co-pay limits and super top-up applicability. This article would not have been possible but for the expert guidance of Ajay Pruthi, a fee-only SEBI registered investment advisor. He can be…
Continue reading →This ETF screener is based on tracking errors and tracking differences (ETF return minus index return). The screener will help users evaluate how efficiently an ETF has tracked its underlying benchmark. Update: 76 ETFs are now covered. The tracking error is the ETF’s standard deviation minus index monthly return differences. The lower the tracking error,…
Continue reading →In this edition of the reader story, Sanjoy shares the financial lessons he learned during and after earning his PhD. About this series: I am grateful to readers for sharing intimate details about their financial lives for the benefit of readers. Some of the previous editions are linked at the bottom of this article. You can…
Continue reading →A reader says, “You keep talking about asset allocation and reducing risk in equity, but I cannot find any source on your site that explains. I request you to write a detailed article on this”. Let us first consider the usual advice peddled around by “experts”. For a long term goal, invest about 60% in…
Continue reading →A freefincal robo advisory user shared an interesting situation with us. Both the husband and wife were senior citizens with at least 27 years in retirement to plan for. The robo-advisory tool allows users to input three different sources of post-retirement income, each growing at a different pace. This couple had an income source almost…
Continue reading →The latest freefincal Equity Mutual Fund Performance Screener is now available. Use it to screen for consistently performing equity mutual funds. You can screen based on fund category & benchmark and spot mutual funds with a higher return than a benchmark at a lower risk. Inside, you get discounted links to our robo advisory tool…
Continue reading →These are a set of slides on retirement planning that I have used at investor workshops and corporate meets. The aim is to quickly convey the importance of retirement planning to young earners. 1. Imagine how your monthly income will evolve in the future The abrupt stoppage in income represents retirement. 2. Now imagine how…
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