Ever since I have started writing my blog and recording my podcasts and sharing them with my near and dear ones, a lot of people do come up to me and discuss their investments and have started asking me to review their portfolio and are seeking financial planning advice. Just last week, I bumped into one of my father’s friends in my office building and…
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Reclassification of Mutual Funds
As per SEBI mandate in October 2017, all Asset Management Companies (AMCs) by March 2018 were required to reclassify, recategorize and merge their mutual fund schemes to eliminate confusion for investors. AMCs used to have multiple schemes with different names, but with the same structure and essence. The objective of this reform was to clearly demarcate the portfolios for investors to choose from. Reliance Mutual…
Is it a Good Time to Invest in Mutual Funds?
“I can’t recall ever once having seen the name of a market timer on Forbes’ annual list of the richest people in the world. If it were truly possible to predict corrections, you’d think somebody would have made billions by doing it.” – Peter Lynch Introduction Bulls versus Bears Returns in Bulls and Bears in India Conclusion INTRODUCTION When BJP came into power at the…
Pros and Cons of Investing in an Index Fund
Introduction Pros Cons Conclusion Introduction In our everyday conversation, we hear people saying “The market is 2% up today” or “The market is 5% down in the last 2 months”. What do they mean when they say “the market”? The market refers to an index which is representative of the overall market. An index consists of a group of stocks and the values of these…
Mutual Funds vs ULIPs
Mutual Funds Term Insurance ULIPs Comparison Conclusion Mutual Funds Mutual funds are investment products available to investors through which they can invest in a professionally managed equity or debt portfolio. Investors who may not want to invest directly in financial markets may instead get exposure to the same securities through a mutual fund. A mutual fund may offer multiple schemes or funds, each catering to…
Factors Besides Returns One Should Consider While Selecting A Mutual Fund
Liquidity Risk Fund Manager Cost of Fund Size of Fund Fund Portfolio Everyone has seen the warning in mutual fund brochures – “Past performances is not indicative of future returns”. Along with returns of a mutual fund, various other factors need to be taken into consideration before investing in a mutual fund. 1. Liquidity Investing is very subjective and people with same finances and same…
Advantages of Investing in an ELSS Mutual Fund Scheme
What is an ELSS mutual fund scheme? Benefits of investing in an ELSS scheme Conclusion What is an ELSS mutual fund scheme? The Income Tax Act allows deduction from income for investments made in equity funds with certain conditions. Mutual funds launched in order to claim this benefit are known as Equity Linked Savings Schemes. These are primarily diversified equity funds that offer tax benefits…
Dos and Don’ts of Investing in Sector Funds
Sector funds are mutual funds that invest in companies of the same sector for eg. a Banking and Financial Services Fund will invest in banks, insurance companies, NBFCs, Home Finance, Asset Management Companies etc. Some examples of Sector funds are – Canara Robeco Infrastructure Fund, Aditya Birla Sun Life Infrastructure Fund, Reliance Banking Fund, UTI Banking Sector Fund Sector funds tend to be cyclical funds….
When Should You Invest in a Short-term Debt Fund
Short term debt funds invest in securities with tenors of one-three years. On account of the short tenure to maturity, risk of significant changes in the value of the securities due to interest changes. They can invest in a mix of short-term instruments like commercial paper, certificates of deposits to medium- and longer-term instruments corporate debt scrips and government securities. These funds are a better…
Pros and Cons of Investing in a Balanced Fund
Balanced funds are mandated to invest a minimum of 65% in equities and 35% in debt to qualify as an equity fund. It is a moderate risk approach which can work well for in and near retirement. It also works well in the time of a high-priced market where one can invest in a balanced fund for the near term and move to a pure…