There are certain styles and strategies that simply cannot replicate on by own and clients have exposure to you. As an investment advisor representative at a good-sized shop. So read the brochure of your mutual fund and again and see the various investment styles .
|Mutual Fund Brochure Says
||The real meaning
||Leveraged to the hilt
||We’ll chase stocks for you in whichever country is most overheated right now
||A basket of government -subsidised experiments and some shares of PSU
||We will invest in sewing machine and typewriter companies
||We will pay for high multiple stocks/you will pay up in fees
||No such things – all corporations are evil suckers
||We will basically buy the Index and go golfing
||Uses exotic derivatives you have never heard off
||We will underperform both the bond and the stock market – you are welcome
||Collections of Chinese online gaming stock and new jersey biotech start-ups
||We can see 20 years in to the future , Only Putnam knows when and how you will die
||Gutless fund manager
||Managers will take credit for up years, blame computers for down years
||We will throw darts
||No need to spread it out ; send us everything you have
Have a good weekend
Just wondering how many ever read the prospectus before signing the document for investments May be securities, Mutual funds, debt, Insurance or may be any other investment.
I already did a series of articles on the topic but there are always possibilities to explore more :
Here are some more bold pointsissued by SEBI (Stock exchange board of India)
In-case of Securities:-
- Read the Prospectus/ Abridged Prospectus and carefully note:
- Risk factors pertaining to the issue.
- Outstanding litigation’s and defaults, if any.
- Financials of the issuer. View full article »
I thought of putting the Sahara case today vis-a vis the famous Bernard Madoff ponzi scheme scandal case … well the study is on, need more data collection and actual reporting but Kudos to RBI and SEBI as they finally nailed out the Sahara Scandal case with the help of Supreme court.
Recollecting some of the scandals in the Investment banking space from The Barclays Saga and Libor , LIBOR Manipulation : any thing for you Big Boyz , JP Morgan : Jamie Dimon Testimony and the series is endless ..I believe the quotes of the maverick author holds true :
- The main difference between government bailouts and smoking is that in some rare cases the statement “This is my last cigarette “holds true
- The difference between banks and Mafia: banks have better legal regulatory expertise,but Mafia understands the public opinion. Or you can say”Give a man a gun and he can rob a bank. Give a man a bank and he can rob the world” View full article »
I have been reading Noah Smith work and found very interesting, sharing the 2008, financial crisis that was unfolding, there was a big argument as to whether the crisis was a “liquidity crisis” or a “solvency crisis”. It’s a very important distinction. A “liquidity crisis” is when banks (or similar finance companies) are financially in the black – their assets are greater than their liabilities – but they can’t get the cash to keep paying their bills in the short term. A bank run is the classic example of a liquidity crisis – even if the bank could eventually pay everyone back, it can’t pay them back all at once, so if people get scared and all try to withdraw their money in a rush, they force the bank to collapse. A “solvency crisis”, on the other hand, is when finance companies are actually bankrupt, and no amount of short-term borrowing will change that fact.
This question has important policy implications in a financial crisis. If companies are illiquid but solvent, you just need to have the Fed lend them money to tide them over until liquidity comes back. If they’re insolvent, you either need to bail them out, or help them into an orderly bankruptcy, in order to reduce systemic risk caused by disorderly failure. View full article »