LEARNING


Moneylife Digital Team 16 January 2015
It is time to force the mutual funds away from their fixed-income model and make them pay for underperformance!   The US has led the world in developing the mutual fund industry. Unfortunately, in that country, financial services companies like mutual funds always manage to get into a...

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It’s time to take some money from the table   It is that time in business and market cycles when there is a concentrated attack on your wealth. Initial public offerings (IPOs) at fancy prices, new ‘get rich’ schemes, easy personal loans and a euphoric stock market create an alluring...

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Moneylife Digital Team 02 January 2015
That would be against conventional wisdom   Conventional wisdom, in the investing world, dictates that one should follow a strict asset-allocation strategy, always. Fixed amounts should be allocated to different asset classes such as debt, equity, gold, etc. If exposure to one asset...

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Selling a stock is much harder than buying. Here are some tips that will help you   Selling stocks is not an easy decision. Sometimes, I think that selling is far harder than buying. I am not one who believes in trading on my inventory. I know people who will have a large holding of,...

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Moneylife Digital Team 19 December 2014
How reliable is published investment research?   “Bonds beat stocks over 30 years”; “Bank fixed deposits beat stocks”; “Investing in debt funds better than fixed deposits”. One may have come across several articles with such titles. How reliable are they? Tim Harford, an economist,...

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Moneylife Digital Team 05 December 2014
Know and manage your emotions, to be a better investor, says a new study   Successful investing is not just about understanding businesses or financial data. The better you can understand and manage your emotions, the more likely you are to take good investment decisions. Behavioural...

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Moneylife Digital Team 21 November 2014
Rober Durand’s research pins investment behaviour on the ‘Big Five’ personality traits   If you invest regularly, you’ve probably made investment mistakes. Either you sold a winning stock too early or held on to a losing stock too long. Mistakes are common but certain mistakes are...

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Moneylife Digital Team 21 November 2014
Once more, research points to poor stock - selection skills of retail investors   A recurring observation on the behaviour of retail investors is that they tend to buy high and sell low. They get carried away when the market is running up and are scared stiff and sell out when the...

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Here is a beginner’s guide   Often, people ask me for a list of books to read on the topic of investments with a view to being able to pick up stocks. I casually mention a few books and they write the titles down. Maybe they buy and read those books; maybe they do...

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Moneylife Digital Team 07 November 2014
Why people miss their goals and how to deal with it   Why do government projects, more often than not, suffer time and cost over-runs?   Consider the most recent project that comes to mind—Phase-I of the Mumbai Metro project. The construction of the first line of metro began...

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Moneylife Digital Team 21 October 2014
Remember, these investments have their own unseen set of risks   Investing only in stocks and bonds seems to be old-fashioned for some investors, or it is made out to be so by advisors and investment banking firms. They are pushing loads of ‘alternative investment’ products, such as...

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Moneylife Digital Team 21 October 2014
How we understand risk   Which would you choose? A raffle draw offering a car as the prize, or a raffle draw offering not only a car, but a chance to win from a small collection of lower-value prizes such as a laptop, t-shirts, etc. Logically, one would feel the second raffle draw is...

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Moneylife Digital Team 10 October 2014
Stand up to phoney market experts   “A prediction about the direction of the stock market tells you nothing about where stocks are headed, but a whole lot about the person doing the predicting,” cautions Warren Buffett.  Predictions appear to be all-pervasive and ubiquitous—be it...

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Trying to make a sense of where we are in the market cycle   “Happy Days are Here Again.” Generally, when this is the refrain, it is difficult to make investment decisions. Everyone is busy inventing reasons to justify higher and higher asset prices for things like shares. Such...

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Moneylife Digital Team 26 September 2014
A majority of actively managed schemes underperform their benchmarks. Do not let their high costs eat into your returns   Costs play a crucial role in every financial product. Costs simply destroy the returns of traditional insurance products, for instance. Similarly, expenses of a...

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Moneylife Digital Team 26 September 2014
A different approach  to saving more and spending less   Financial advisors widely propagate that one should save a fixed percentage of one’s income. While this concept does influence one to save regularly, it also indirectly implies that one should spend the remaining income....

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Moneylife Digital Team 12 September 2014
A simple ‘timing model’ has worked well in the US to deliver risk-adjusted returns   Many investors seek an all-weather portfolio that can withstand varied market environments. This requires an allocation strategy that can reduce losses at the time of a market decline and develop a...

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Moneylife Digital Team 28 August 2014
Financial advice comes in many different forms. Is the advice you get in your interest or that of the advisor?   Those who take advice, or seek help, from professionals, expect it to be correct and unbiased. The views of multiple professionals in the same field should not vary that...

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Moneylife Digital Team 28 August 2014
Risk tolerance can vary depending on market valuations   Risk profiling is a widely-followed concept in the investment advisory business. Knowing a client’s risk tolerance forms an essential part of the modern-day financial planning process.   Product recommendations are...

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Corporate governance in PSUs is negligible, while the prime motive of family run business is to maintain control and not produce profits for shareholders. So for increased returns on your investment, pick companies with the most corporate oversight and the best governance Over the...

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