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

Goal planning focusses on long haul projections while budgeting is more “current time”. Goal planning requires near perfect discipline. Budgeting gives you flexibility. All these points aside - my biggest gripe with goal planning – never seen anybody do goal planning basis real rate of return . Corpus projections basis nominal rate of return is commonplace. Going for real rate of return is difficult – because one needs to get an approximate idea of his / her personal inflation rate. Figure this – INR 25 Lacs invested for 20 years end up with corpus of: -             INR 2.41 Cr @ nominal CAGR of 12%. But hey, hold on - there’s a psychological trap in this number – your mind gets tricked into believing you did good because you measure purchasing power of this corpus of INR 2.41 Cr in current price terms   -           Now assume your personal inflation rate for next 20 years...

How quickly money doubles in any risk (growth) investment? That, I think is the best measure of categorizing returns into buckets of “Satisfactory”, “Good” and “Excellent”. And for good measure, let us also throw in the “Extraordinary” return bucket. Though we need to establish a reference point first. Like it or not, comparison or relativity needs to be there. Let’s say you get 5% post tax returns from fixed rate (risk free?) investments. It takes slightly more than 14 years to double the money at this rate of return. Here is my categorization of returns from risk investments: -           Satisfactory: Money doubles in two thirds the time of fixed rate of return. A return of 7.59% does this trick. Quiet a lowly return one would say. Do realize that it takes nearly 5 years lesser to double the money than fixed rate ROI   -           Good: Money doubles in half the time of fixed r...

"We must base  must our views of future policy on a knowledge of past experience'                                                                                                                         - Benjamin Graham 1 Day, 1 month, 3 months, 1 year, 5 year or 10 years? The context is “correction” afflicting the equity markets. Here’s how equity markets have performed as on closing of 13 th March 2026: 1 Day: Minus 2.31% 1 Month: Minus 8.21% 3 Months: Minus 9.72% 1 year: Up by 7.03% 3 years: Up by 15.05% 5 years: Up by 12.31% 10 years: up by 14.35% All return figures are basis Nifty 500 TRI . Data source is www.niftyindices.com. Situation is bad – if you look at t...

Not happy with the returns of your equity mutual fund investments? On the contrary, very happy with the returns you are getting? In any situation, take a quick look at your overall portfolio holding days. Should be easily available in the tracker (app?) you are using. If you have been at it for less than 3650 days (10 years), don’t be disheartened with not so good performance. Likewise, be wary of being elated with extraordinary high ROIs. It may not amount to much in absolute monetary terms. And in both cases, long pull may turn out to be very different. Here are some holding days data from some of the investor portfolios in our kitty: - Investor 1: Started of with us in 2016. That would be nearly 10 years now. However, portfolio holding days come to just 875 days (less than 2.5 years). Increase in monthly contribution over the years and a large lump sum investment couple of years ago brought down portfolio holding days significantly - Investor 2: Investing with us since 201...

“What doesn’t kill you, makes you stronger” -           Friedrich Nietzsche, 19 th Century German Philosopher IT Stocks are being hammered on almost daily basis. “ AI ” seems to have given serious “infection” to IT companies and doomsday predictions for most of the organizations abound. NIFTY IT index as on 21 Feb 2026 is down nearly 16% in a month and 19.84% in year. On the contrary, broader Nifty 500 index is up 2.04% in a month and by 13.37% in a year. One following a broad market indexing strategy using Nifty 500 index fund has been spared the sectoral downturn reflected in IT stocks. And that’s what diversification is all about. That said, is it time to take a contrarian call and buy some IT stocks? Or rather than go for individual stocks, introduce IT index fund to your portfolio and build a diversified holding of IT companies? The latter approach looks better to me as it takes the guesswork out of which company handles the AI ...

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   -    ...