A helping hand from numbers leads to objective opinions and confident decisions!!!

In the latest blog , I had shared (my) benchmarks for checking broader markets overvaluation or undervaluation status. Before I proceed to check the efficacy of these benchmarks, why do we really need such benchmarks? Here let me quote the timeless advise rendered by Benjamin Graham in his investment classic – “The Intelligent Investor”: We have suggested as a fundamental guiding rule that the investor should never have less than 25% or more than 75% of his funds in common stocks, with a consequent inverse range of between 75% and 25% in bonds. There is an implication here that the standard division should be an equal one, or 50–50, between the two major investment mediums. According to tradition the sound reason for increasing the percentage in common stocks would be the appearance of the “bargain price” levels created in a protracted bear market. Conversely, sound procedure would call for reducing the common-stock component below 50% when in the judgment of the investor the mar...

Buy low, sell high is what everyone wants for investments (equities) where high ROI is being targeted. That gives one a shot at landing up with extraordinarily high returns. The catch – identifying high and low valuation situations. With consistency!!! High decibel pitch mostly highlight latest annual returns while long pull data is mostly mentioned on the sidelines. Relying on short term point to point data will mostly lead to wrong conclusions. My view: looking at decadal ROI’s and assessing them against a fixed rate low risk benchmark will give one a better shot at forming an opinion on whether prices are low, reasonable or high. And while one is at it, 3 period smoothening (averaging) will still give a better result as it tends to iron out significant outlier events making point to points returns even for long horizons go haywire.   Circling back to fixing benchmarks. As we assessing performance on decadal basis, I will consider 10 year Indian government bond yield as...

Remember my index plus approach blog? Never mind if you don’t recall. You can check it out here . This gist of index plus approach – trying to better the returns generated by broad market indexing by following some “active” investment options. Let’s check how this approach has done in the latest calendar year gone by (1 Jan 2025 – 1 Jan 2026). And rather than looking at index returns, we will check out index fund returns from a particular fund house (Motilal Oswal) as that gives an idea of actual return what an investor would have realized. Here are some numbers: -           Nifty 500 Index fund: 6.57%, way below “general expectation of 12% to 15% returns   -           Nifty 50 Index fund:  10.89%. That’s more than 4% extra from Nifty 500 index fund. Underperformance by mid cap and small cap stocks pulled down Nifty 500 performance quite a bit   -    ...

Ever heard about the “Permanent Portfolio”? The genesis of this investment strategy lies in a book – “Fail Safe Investing – By Harry Browne”, written way back in 1999. This portfolio is quite unique and contrarian in the sense that it proposes one quarter of holdings each in investments such as gold (not jewellery), cash equivalents, long durations bonds and broader equity indexes. The premise is - "Every investment has its time in the sun - and its moment of shame". However, put together, such highly uncorrelated investments let one be one up on bad financial times of any kind. I admit this is the first time I have heard of such high gold and cash holding in any investment program. 5% to 10% is more like it. I would have mostly trashed this portfolio as some marketing gimmick if I had not come across excellent analysis done in this blog . While the said blog is in UK context, I would tend to believe same would be more or less true in Indian context too. Maybe better as our ...

First question: How much do I have? Second question: How much of it is liquid which I can move around quickly? Third question: Where all, and how much do I want to put my money? Fourth question: Does my budget have a provision for any urgent requirement to ensure I don’t need to tweak my plan midway? Final Question: What is the plan for pulling out some money from an investment which has done exceedingly well against established benchmarks? 

Annualized returns as on 30 Sep 2025 Asset Class 1 (Gold): -           One year: 52%. Outstanding performance by Gold -           10 year: 16.12% Asset Class 2 (Equities, basis Nifty 500 TRI ): -           One year: Negative 4.94%. Abysmal performance by equities in past 1 year, more so when compared to gold returns -           10 year: 14.35%. Now it does not look that bad even if you bring gold in perspective However, it is quite clear gold trumped equites both in long and short horizons. Good many people will be inclined to go for gold investments going forward, now that data proves gold trumps equities even in long horizon But hang on. What was the situation on 30 Sep 2024, and for good measure on 30 Sep 2023. Here we go… Annualized returns as on 30 Sep 2024 Asset Class 1 (Gold): - ...