I have always said that equity have outperformed every asset class provided it has been done for long term and continuous investment been made with basic checks.
Is it so bad to see some stocks fall hugely? We have seen a number of stocks roll over and play nearly dead, losing more than 90% of their value in a few years. And then we thank our stars that we don’t own them. (And if we do, we don’t tell anyone until after 3 pegs)
Here is an interesting story done by Capital mind for a simple portfolio build on Nifty Continue reading “Yes you can beat the benchmarks? Even after getting it wrong”
This is a very basic post for the kids and for the people to explain the banking terminologies. Here is a conversation between Dad and Son explaining how the bank operates,
What are the implications of CRR, SLR, Repo Rate, Reverse Repo Rate and their impact on deposit rate, loan interest rate and on inflation?
Son: I have heard recently that Mr. Rajan has reduced Repo Rate by 50 basis points and everyone is saying that this is good for the market. Loan EMI may also come down. What is this rate cut means actually? I want to understand this.
Dad: To understand this you first need to know, how does a bank function. Continue reading “How does a bank operate?”
In personal finance, if you divide the number 72 by the rate of interest, you get to know the number of years it will take for you to double the money..
Ex: if the rate of interest is 9%, simply divide the number 72 by 9% and the answer is 8. Thus 8 years will take to double your money if you invest at 9% of rate of interest.
INTEREST: we can use this rule in reverse to know the rate of interest needed to double your money to achieve your set goal. Continue reading “The Rule of 72”
From the last Monetary policy RBI has started publishing Post Policy Conference Call with Researchers and Analysts providing transparency.
There are a lot of questions on the interest rates including MSF, LAF and OMOs.
You can read the full edited script on RBI Website
With reference to the above lets focus on The “term structure” of interest rates refers to the relationship between bonds of different terms. When interest rates of bonds are plotted against their terms, this is called the “yield curve”. Economists and investors believe that the shape of the yield curve reflects the market’s future expectation for interest rates and the conditions for monetary policy.
Usually, longer term interest rates are higher than shorter term interest rates. This is called a “normal yield curve” and is thought to reflect the higher “inflation-risk premium” that investors demand for longer term bonds. Continue reading “RBI rate hike and the Term Structure”
Good morning so the RBI New rates effective 29.10.2013 are :
*Reverse Repo Rate:6.75%
*Cash Reserve Ratio:4%
Well those are the rates where the governor Raghuram Rajan in his first “real” policy, increased the repo rate by 0.25% to 7.75% and cut the MSF rate by 0.25% to 8.75%. Reverse repo goes to 6.75%.
Well the above would be more clear providing you Continue reading “RBI Raises Key Rate to Fight Inflation”