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

It can’t be right. I am definitely missing something. I get it market - does misprice traded securities sometimes but it is rare such mispricing continues for extended period, especially for securities where one is bound to get assured price (not returns) with a publicly available agreed benchmark. I am talking about SGB’s  – the Indian government gold price denominated security which is benchmarked to 999 purity gold price. How does RBI, the Indian central bank price these bonds? Fact is, it doesn’t. It lets the market (aka IBJA Rates – IBJARATES.COM) determine the price – at which it issues and also the price at which it redeems these gold denominated bonds – during final maturity after 8 years of issuance or even during premature redemption option after 5 years. Meanwhile, from issuance period till final redemption, these bonds trade in stock exchanges – like other securities, mostly at discount to spot rates. Let me go with an example: – I own Aug 2028 Series V SGB. Let’ se...

Before I begin this post, let me say it loud and clear - I have a conflict of interest in this topic as I am professionally engaged as a a mutual fund distributor. That part out, let's begin.  Can you roll on your own? Let me rephrase the question – should you roll on your own? Simple answer – yes, one “should” always try to be a DIY investor. Because if one is able to do it appropriately, and for a real long time, the end results may be  much better than if you get professional help, either by way of a fee charging advisor or an agent who gets compensated by way of commissions. A part of this “better” portfolio performance will come from savings on fee or commission being paid to the “helper”, and compounding of savings invested will add to it significantly. And with the help of google and host of free apps available, being a DIYer, at least in theroy is not that tough. But there is world of difference between “SHOULD” and “CAN”. Here what the dictionary says about thes...

Whether value of your primary home or the car you drive be counted in your net worth? Or in Indian context, the value of jewellery you possess? For a long time, I was on the other side of the fence – any consumption stuff should not be considered in net worth working. Now, my views have changed – the stuff which give you and your family “status” and let the world know that you have “arrived” are definitely worthy of being counted in your net worth. Ok, don’t roger me for being so subjective despite of running a blog obsessed with numbers. But even in numbers context, anything which can be liquidated for money maybe be considered in “Net Worth”, or more simply wealth status. I say “maybe” and not “should” because for consumption stuff, which serves only a particular need, it is upto an individual of what he / she plans to do with the money realised after liquidating the stuff. For example, I scrapped my 15 plus year old motorcycle and got nearly 10% of purchase outlay as cash value....

Do you believe that Indian Equity markets are doing better than US equity markets? As far as I get the drift from the “news”, it seems Indian markets are on the roll, while global equity market, especially the US is doing bad. Let’s see if the numbers support this opinion!!! Here’s what the numbers say***: 1 Year calendar year (CY) performance, basis Total Return Index (TRI): -           NIFTY 500:           4.25%   -           S&P 500:              -18.11      Indeed, Indian markets have held up better. And hence all the noise about being an oasis in the desert!!! What does 5 year horizon hold? -           NIFTY 500:           11.52%  ...

Why have one? Say you are a bit like me and think too much about spending money on certain activities/stuff and always have guilt about splurging on something which you may do without, even though they may give you immense pleasure, even for short term. How do you manage that guilt? Put in a different way, how do you convince yourself that the money you have, let’s say not spent but splurged, is you can well afford, the spending “guilt” is unfounded and you can let go the opportunity cost conundrum. The solution I found for me is to create a separate corpus. I will call it “Splurge Fund Corpus” (SFC henceforth) . Simple excel worksheet did the job for me. I created an excel sheet with different activities like travel, eating out, buying gadgets, etc and allocated annual capital to them for current FY (April 2022 – March 2023). While allocating capital for SFC, to ensure I don’t go overboard and also don’t budget too less an amount, I needed a benchmark. Enter a simple thumbrule – my S...

  Slightly more than 3 years ago, I did something unconventional – I bought into a very high deductible health insurance plan for our family. The deductible was INR 5 Lacs. Essentially, I was on my own for this much money – EVERY YEAR, in case I or any of my family members needed any hospital care. The upshot for this big risk I took: -           I paid a very meagre premium for a policy with no sub limits – especially no daily “room rent” limit which renders Sum Insured of normal “ground up” policies mostly useless to the full extent -           The Sum insured I got was quite high for the premium paid – just under INR INR 5,000/- for a Sum Insured of INR 20 Lacs Why did I go for such a high deductible health insurance policy and took such a seemingly big risk? Because the numbers I did brought out a very different picture and I made my decision to be self insured for first INR 5 Lacs a...

After what seems a really long time, I went on a long vacation to a quaint sea side town with wife, son and my parents in tow. While doing the bookings, I always try to scrimp on paying for a hotel room. However, during my last vacation at Goa, I did realize that if chosen well, some hotels / resorts can be worth the money they charge. Location, space, good upkeep of the property and quality of ancillary services (like F&B service) can justify the asking price of some properties. But still, how much should you be paying for your stay, say on per day basis for a room? We all know that the range is vast, and we need to cap it, as the higher we go, our net worth is getting the hit, while the pleasure derived from the stay experience may not be as high as the price. The rule of thumb I have devised to decide my daily room rent budget when travelling is linked to my primary residence market value, or an amount designated for buying my primary home as I do not own any residential p...