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Archive for May, 2014


I have been reading lot of articles on moneylife.in one of the effective blog on the financial awareness for retail investors.  Indian blogmutual fund houses seem to have finally cracked the code for attracting investors from outside the big cities. More than half the folios, or accounts, opened in 2013-14 under a Systematic Investment Plan have come from tier-II or smaller cities — known in sector parlance as B-15, meaning, beyond the top 15 cities. Will not explore on the data much, lets take the example of a Reliance mutual fund claiming that it  has grown 11 times in less than 11 years.

This compared to the benchmark—CNX bank Nifty, that has grown about eight times over the same period. The return on paper looks great and is enough to lure an average investor. But is the Reliance Mutual Fund add an example of financial illiteracy? Continue reading

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The favorite business books that are also fun reads? They can’t be boring, must be Business or Investing related. They also should blogbe informative and/or educational as well.

Here are 10 random business books that I think are especially readable:

Lords of Finance by Liaquat Ahamed: “It covers a 50-year period from before World War I and leading up to World War II. Even if you’re not interested in finance, it’s a great read”

 The Big Short by Michael Lewis: “Michael Lewis, to me, is the preeminent narrator [of the financial crisis]. He is the guy who constructs the story better than anybody else.” (Lewis also wrote the wonderful Moneyball, which covers the business of Sports — kinda) Continue reading

Before you proceed, there are some questions one should ask taking up any task in life.blog

If somebody asks me: “Should I buy a house?”

And my answer is always the same: “I have no idea.”

It is not for lack of familiarity with price-to-rent ratios or the benefits of the mortgage interest deduction. No matter how carefully and clearheadedly you approach the exercise, is more a starting point than a conclusion about your optimal living situation. It will give you a good look at the financial dimensions of your decision. But housing is about quite a bit more.

These are the 5 questions that one should answer before taking a call:

  • How much is permanence worth to you?

One of the nonfinancial benefits of buying a home is that you know you can live in it indefinitely. You don’t have to worry that the landlord will raise your rent 20 percent, or demolish the building to turn it into something else. You can renovate the kitchen or paint the shutters according to your preference and yours alone. (O.K., maybe a historic preservation board or homeowners association may have some say, but you are pretty much on your own).

So what is that worth to you? It is purely a question of your preferences and priorities in life. Continue reading

History shows that mutual fund investors generally increase inflows after observing periods of strong performance. They buy blogat high prices when future expected returns are lower, and they sell after observing periods of poor performance when future expected returns are now higher.

This results in what author Carl Richards called the “behavior gap,” in which investor returns are well below the returns of the funds in which they invest. Perhaps with this observation in mind, Warren Buffett once said, “The most important quality for an investor is temperament, not intellect.”

In his wonderful book “The Behavior Gap,” Richards recommends asking three questions before you make investment decisions based on your own or someone else’s forecast:  Continue reading

I don’t mine repeating myself several times, unless you are helping someone to explain things. This is the post for my junior blogcolleagues and for my team trying to dig for basics of Mutual fund , Asset management  company , selection of funds and comparison of scheme with others.

So friends, A mutual fund is a trust that pools the money of several investors and manages investments on their behalf. Legally it is like any other company you know of. Hence, the fund is also called a mutual fund company. The fund company takes your money and like you from other new investors. This is added to the money that’s already invested with the fund.
Asset management company (AMC) – Investing and managing the collected money is a difficult task. The fund company delegates this to a company of professional investors, usually experts who are known for smart stock picks. This company is the Asset Management Company (AMC) and the fund company usually delegates the job of investment management for a fee. Continue reading

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