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

“Capacity” comes from availability of surplus funds. This part can be dealt objectively and rather quickly as we are dealing with facts as they exist. “Willingness” can be defined as going ahead and deploying a sizable part of available surplus funds into so called “risky” investments such as equity mutual funds. Herein comes subjectivity as one must take decisions results of which will only show up in distant future. Let’s first hit the surplus funds (capacity) part. Say you are a government employee with an assured pension. On your retirement, you get a lump sum amount of INR 1 Crore and an assured pension of INR 1 Lac per month. Let’s say hypothetically your monthly expenses will be very well covered by the pension amount. Academically speaking, you have the “capacity” to go for risky investments to the tune of your surplus capital which here is the lump sum amount of INR 1 Crore. Realistically speaking, if you cannot bring yourself to invest sizeable amount of this corpus - s...

If you are a DIY (Do It Yourself) oriented person, even one buck is a cost too much. Better to shun any kind of professional involvement and learn the tricks of the trade yourself. And taking this DIY thing to extreme – why bother with the mutual fund route – buy direct stocks through a discount broker and you will be further reducing your cost of investment!!! But WHAT IF you are not sure whether you can be a DIY investor or not? Have a look at my opinion here   and here . These two blogs should give you a broad framework to assess whether you can roll on your own. Now, WHAT IF you decide you can’t be and/or don’t want to be a DIYer and want some professional help.  Or let me put it in a different way – you want to start off your investment journey with some assistance initially, and then evaluate if you can go the DIY way. In such a situation, cost will be a consideration as any kind of intermediation will involve charges, be it through in built commissions or through fe...

“Market Linked Investment Returns Work On Probability Not Guarantee”   Simple strategy to have probability of winning on your side - follow the “Forget It” Plan, which is: choose an equity index fund, keep deploying money in the same as per chosen frequency. Of course, deploy decent amount of capital if you want to accumulate sizeable corpus at the end of your investing horizon. And before you start off, decide your horizon (investing + holding period) and the exit strategy too!!!   And then there’s  what I term “The Active Plan”. This is for those who want to generate “better” returns than just tracking the indexes. Let’s call it “The Index Plus” approach. Alternatives for “Index Plus” approach which I can think of:   o    Invest in some stocks directly rather than going through the mutual fund route. If one get’s the right pick, deploys sizeable amount and is able to hold the same till the stock price runs it’s course, returns can be akin to w...