Which Fund to Choose?

Mutual fund is still an untapped market in India, Although India has more than 50 AMC (Asset Management blogCompany) operating with more than 20,000 odd schemes.

When it comes to investing I always say that Equities have out-performed other investment asset classes over the long-term in India as well as globally. With growing maturity, retail Investors in India have begun to realize this and also take into stride the short-term volatility of this asset class. Better regulatory environment and improved corporate governance have also helped bring more investors to Equities.

Equity investing requires a lot more dedicated time, patience, skill and knowledge while people prefer to invest Continue reading “Which Fund to Choose?”

The Financial experts Good, Bad and Worse

The last two post were on forecasting the markets, so I decided let me continue on forecasting. The Atlantic blogpublished a challenging article on the decision-making abilities of financial experts sometimes back, I like the arguments and the study outcomes are not surprising to me ūüėČ

There are experts, and then there’s everybody else. In finance, experts have studied the subject and follow the markets closely, so you’d expect that they’d be superior at betting on the stock market as well as on other financial matters, right? Well, perhaps not so much. As the psychologist Philip Tetlock‚ÄĒwho did a 20-year study on the subject‚ÄĒfamously said:

Experts are poorer at predictions than dart-throwing monkeys. Study after study has shown that low-cost index funds‚ÄĒinvestments that track major financial market indices‚ÄĒoutperform “actively managed” mutual funds. Continue reading “The Financial experts Good, Bad and Worse”

Wide Difference between Insurance (ULIPS) and Mutual funds

blogDid not thought of writing this post but the Diwali LIC incidence force me to share the thoughts where a neighbor uncle forced me to buy a LIC Unit Linked Insurance Policies (ULIPs)

ULIP as an investment avenue are closest to mutual funds in terms of their structure and functioning. As is the cases with mutual funds, investors in ULIPs are allotted units by the insurance company and a net asset value (NAV) is declared for the same on a daily basis.

Similarly ULIP investors have the option of investing across various schemes similar to the ones found in the mutual funds domain, i.e. diversified equity funds, balanced funds and debt funds to name a few. Generally speaking, ULIPs can be termed as mutual fund schemes with an insurance component. Continue reading “Wide Difference between Insurance (ULIPS) and Mutual funds”

Why investing is difficult?

blogIt’s been observe that people find investing as one of the difficult task. Either they end up depositing all their savings in fixed deposits, gold or they become the scape goat of ULIP (insurance).

Moving on to some quotes on the investing and financial markets that might change the perception of yours. ¬†There isn’t right and wrong, there is two sides to the coin, but rich dad exists on only one side of the coin, the business and investor.

Yes, there is some risk involved with investing, and it can be scary. But if you don‚Äôt take control of your cash and moves forward you, well those are famous ones from¬†Rich dad¬†-Poor dad. Continue reading “Why investing is difficult?”

Who is the enemy of Investors ?

History shows that mutual fund investors generally increase inflows after observing periods of strong performance. blogThey buy at 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.” Continue reading “Who is the enemy of Investors ?”