What rate of inflation should I use for financial planning calculations?

A reader asks, “how do we decide the right rate of inflation to be used in financial planning calculations?” Let us first address the easy part: “What inflation rate NOT to use!” Financial planning is a personalized exercise. All inputs and assumptions should reflect our personal circumstances. Therefore the rate of inflation we assume has…

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Is there a place for high-interest rate fixed income products in a portfolio?

It is quite easy to see extreme reactions to many aspects of personal money management. Yield-chasing or seeking to invest in high-interest rate fixed income products is no different. Many investors vehemently believe that there is no place for risk in a portfolio. “We have enough risk from equity, so why take on more risk…

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An important lesson from Facebook and Stripe layoffs

Before Twitter announced massive (~ 50%) layoffs after Elon Musk’s acquisition, financial services company Stripe announced a 14% layoff. Transport company Lyft followed with a 13% layoff, and on 9th November 2022, Meta, which owns Facebook, Instagram and WhatsApp, announced that it would cut 13% of its workforce. Earlier, Amazon announced that it would freeze…

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Should I now increase my international equity exposure?

Two readers have the following questions. “Given the relative performance between Indian and US markets, my asset allocation is running low on international equity exposure. (1) Should I now increase my international equity exposure?” “(2) Is there any ideal rebalance frequency (identified via backtesting)? I’ve usually encountered rules such as – rebalancing once a year/…

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