LEARNING


Moneylife Digital Team 12 October 2012
Keynes, besides being an influential economist, was an ardent stock investor and developed the concept of asset allocation   John Maynard Keynes was one of the most fascinating and influential figures of the 20th century. His pioneering work on fiscal and monetary measures as tools to...

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Moneylife Digital Team 02 October 2012
Studies, surveys, regulation, misconduct and savers’ behaviour from around the world Save Now for Tomorrow   It is a well-known fact that higher savings today will lead to enormous financial benefits tomorrow and over the long-term. Yet, several investors do not make an effort...

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Moneylife Digital Team 17 August 2012
It is true that earnings forecasts improve transparency and aid market efficiency while keeping management and shareholders on their toes. However, there’s a cost to management guidance. When a management gives guidance, its share price would be immediately priced in by the market. For...

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Moneylife Digital Team 17 August 2012
Dividends seem to have gone out of fashion these days. In fact, not many investors are convinced that dividends will add value at all. However, research studies suggest otherwise; between 1798 and 1990, nearly all of the real returns from the US stock market came from the reinvestment of...

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Moneylife Digital Team 17 August 2012
Warren Buffet once said, “It is optimism that is the enemy of the rational buyer.” It is well-documented that optimism bias is one of the blind spots for all kinds of investors. After all, we expect good things to happen to investors. However, too much optimism induces over-trading, which...

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Moneylife Digital Team 10 July 2012
 Recent research has revealed that listening to friends is detrimental to one’s finances, and this applies to professional investors as well   Friendship as an important requirement for a good life. But people value friends so much that they are also the most trusted source of financial...

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Moneylife Digital Team 28 June 2012
Should financial products be regulated like drugs?   Financial and pharmaceuticals industries are similar. Both are based on complex processes. Both promise a better future—one for your health and the other for your wealth. Both the sectors are driven by steep sales targets. Health...

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Moneylife Digital Team 11 May 2012
Mis-selling by banks is sparing no one There was a time when, a banker’s word was a banker’s bond. Bankers were modest, careful and decent people and customers could entrust their savings to them. A fiduciary relationship was strictly followed and the clients’ best interests were...

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Moneylife Digital Team 27 April 2012
Despite the wealth of empirical evidence for the case against alternative assets, wealth managers continue to push alternative investments and high net worth investors fall for them, much to their regret later Financial companies are forever conjuring up new ways to extract your money....

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Moneylife Digital Team 17 April 2012
If two mutual funds offer widely different asset allocation, what is a saver supposed to do? If one doctor prescribes two pills a day for some cure and another doctor prescribes one every week, you may wonder whether both of them are quacks. Investment knowledge is often practised at...

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Moneylife Digital Team 16 March 2012
Wielding too much information might actually impair our ability to beat the markets over the long term   Many of us are often glued to television hoping that the latest news gives us a ‘clearer picture’. We read newspapers, surf the Internet, stuff in as much information as we can into...

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Moneylife Digital Team 17 February 2012
Only a few products would meet your needs From just a handful of products a few decades ago, the number of financial products has grown to thousands today. Do we need all of them? Can we even make a proper choice? While choices have certainly made our life more interesting, they have...

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Debashis Basu Debashis Basu 05 December 2011
US bonds beat stocks over 30 years. Was it a freak happening? Debashis Basu throws some light The central tenet of investing and financial planning is that stocks do very well over the long term—better than any other asset class like bonds (of all kinds), gold and commodities. After...

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Moneylife Digital Team 17 November 2011
No one has a fixed tolerance for risk If you have surfed the Internet for guidance on investing, or have met a financial planner, you may have come across the term ‘risk profile’. This is supposed to determine how much risk you are willing to take as an investor. To capture their risk...

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Moneylife Digital Team 03 November 2011
Would you need 135% of your final income in retirement years? Financial advisors suggest that you need to plan to spend 70%-80% of your pre-retirement expenses in your post-retirement period. In one of our earlier articles, we had calculated that expenses on food for two people in a family...

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Moneylife Digital Team 20 October 2011
Given rising inflation, a loan makes better sense Before you realise, it’s the first day of school for your child. For a parent this is a big occasion, a child’s first steps down the long road of education. You have checked everything—uniform, pencils, crayons, books and schoolbag. Well,...

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Moneylife Digital Team 22 September 2011
The answer will surprise you Most of us, typically, don’t know how much to save for retirement, especially since people are living longer. Thanks to rising longevity, you should hope to live at least 20-25 years after retirement which means that many years of expenses. Many experts say that...

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Moneylife Digital Team 08 September 2011
What do you expect from your investment? If you invest in stocks or mutual funds, you are probably aware that returns are highly volatile. But just how volatile? From 1990 to 2010, the Bombay Stock Exchange sensitive index (Sensex) has risen by 17% annually. But on more than half the 21...

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Moneylife Digital Team 08 September 2011
Apple or BankAm stock? No, it’s not that easy Bank of America (BankAm) is almost bankrupt and mirrors all the ills of the US economy. Apple represents the best of the US—innovation, smart managing and delivering customer delight. The BankAm stock is down in the dumps. Apple is, well, the...

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Moneylife Digital Team 25 August 2011
After all, most large-cap diversified funds go for the same blue-chip stocks Diversification is a risk management strategy where an investor spreads investments across a wide range of companies and sectors. He diversifies his risk if a firm or sector fails. One of the easiest ways to...

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