Can Mutual Fund risk be quantified and can it be eliminated?

Can Mutual Fund risk be quantified and can it be eliminated?

  Of late, we have been bombarded with endless ads of “Mutual Fund Sahi hai”. And all of them end with a standard disclaimer – “Mutual fund investments are subject to market risks. Please read the offer document carefully before investing”. What does that even mean? Is it just a mandatory disclaimer or something that needs to be taken seriously? Short answer – do NOT ignore the risks. Investing in Mutual Funds (especially Equity Mutual Funds) is fairly risky. Does that mean you simply stop investing in Equity MF and go back to…Continue reading →
Are SIPs really the best way to invest in mutual funds?

Are SIPs really the best way to invest in mutual funds?

  There are 248 trading days in a year. With SIPs, you just invest on 12 out of those 248. If the purpose is cost averaging, then why invest just 12 times in a year? Why not every week, or for that matter why not every day? Also SIP is after all just an entry strategy. It governs when to invest. But what about exit? If your investment plan is premised only on SIPs and doesn’t have an exit strategy, it’s akin to a “Chakravyuh” – you know how to get in, but…Continue reading →
Finpeg@30

Finpeg@30

  Since we went live, we’ve focused on building our business the boring old school way, one relationship at a time. And in the process, we have simply ignored every other fad of the start-up world from digital marketing to SEO to SEM and what not! And yet our singular focus on our core proposition (kick-ass advisory and a powerful tech platform) has helped us cross an AUM (Asset under Management) of Rs. 30 crores within just 6 months of going live, and that too without raising a cent of external capital or…Continue reading →
The great Indian Fixed Income party most retail investors will miss

The great Indian Fixed Income party most retail investors will miss

  Unfortunately most Indian retail investors will miss this great Indian Fixed Income party either because most of them have yet to come out of their long standing love affair with bank fixed deposits, or are dazzled by the SENSEX topping 32k this week. And yet what seems to have largely gone unnoticed is that FIIs have quietly pumped in a whopping Rs. 1.05 lakh crores in Indian bonds since January 2017, twice the Rs. 53,000 crores they have invested in Indian equities over the same period. By Indranil Guha, Co-founder - Finpeg.com…Continue reading →
Why do you need to Invest?

Why do you need to Invest?

  Investing is essentially the process of building a corpus that can help cut down and eventually eliminate our dependence on our monthly pay-checks as the primary source of income By Indranil Guha, Co-founder - Finpeg.com Unless you forefathers have left you a large kitty to last you a lifetime, most of us working class folks (the proverbial “aam aadmi”) have two ways of meeting our monthly expenses – either we slog it out at work to earn enough money to get by in a month or we build a kitty over time…Continue reading →

Starting early versus starting big

If you want to be sure about achieving your financial goals, start early. Don’t be deterred even if the start is small. It’s far more important to start early than to start big. If you have time on your side, you have a secret sauce that can turn even small amounts into gigantic sums over time. It’s called COMPOUNDING By Indranil Guha   I was recently chatting up with two of my ex-colleagues, who finally woke up to the fact that they haven’t really started saving up for their golden years in any…Continue reading →

Why should you invest in equity mutual funds only through robo-investing platforms?

This is the second of a two part series. In the first part, we had examined how high performing Equity Oriented Mutual Funds have given eye-popping returns (at times in excess of 20% annually) over timeframes as extended as 20 years, making them arguably the best suited instrument for long term wealth creation for retail investors. In this second part, we’ll examine how today’s best performing funds aren’t necessarily going to be so forever, and hence why the only way to sustain the superlative returns that equity mutual funds are known to generate…Continue reading →

Why should you invest in equity oriented mutual funds?

This is the first of a two part series. In this first part, we’ll examine how high performing Equity Oriented Mutual Funds have given eye-popping returns (at times in excess of 20% annually) over very extended timeframes, making them arguably the best suited instrument for long term wealth creation for retail investors. In the second part, we’ll examine how today’s best performing funds aren’t necessarily going to be so forever, and hence why the only way to sustain the superlative returns that equity mutual funds are known to generate is by investing in…Continue reading →

A quick introduction to the concept of asset classes

My uncle recently bought some units of Government bonds with an average maturity of over 15 years. I casually asked – “you do know the risks involved in this investment?”. His answer left me a bit unnerved! He thought that it was a completely risk-free investment since Government never defaults. Wrong! Even if we assume that Government will never default (actually they could), the investment is risk free only if it is held till maturity. And here we are talking about a maturity of over 15 years. Unknowingly, my uncle had taken a…Continue reading →

Different types of investment risks and factors that drive them

The simplest (and yet the most powerful) definition of risk is the chance that an investment’s actual return will be different than the expected return (explained in detail here). The factors that drive this risk also help us categorise it into various buckets. Throughout this article, we will use 3 different types of investment option to illustrate investment risks – shares of an automobile manufacturer (AM), bonds of an infrastructure company (IC), a house in suburbs of Mumbai purchased for investment purpose (RE). While there are various types of investment risks, for the…Continue reading →