Latest Posts

Mid-cap & Small-cap downfall – What do I do now?

midcap downfall

Mid-cap & Small-cap stocks (& mutual funds) are witnessing a major correction since budget in Jan-18. One of the reason is the SEBI’s new guideline on stock categorization, resulting in Mutual funds correcting & realigning based on new guideline.

On the other hand, NIFTY is close to an all-time high now, but what one needs to understand is that, historically we have witnessed these scenarios again and again, i.e.a surge in the market over a period of years, after a massive plunge.

This includes the year 2003 when after the market plummeted, NIFTY Mid Cap and BSE Small Cap Indices have grown at the rate of 75% and 99% CAGR for the next 3 years. This theory is further bolstered when after reaching a low in 2007, NIFTY Mid Cap and NIFTY Small Cap grew at an absolute rate of 68% and 25% respectively. Last but not the least, 2013 also serves as a perfect example when NIFTY Mid Cap and NIFTY Small Cap grew at an absolute rate of 134% and 142% respectively after the shoddy performance.

All of this brings us to the current scenario, where we are witnessing the same volatility in the market where the NIFTY Mid Cap and NIFTY Small Cap have ALREADY CORRECTED 26% and 16% respectively FROM ITS ALL TIME HIGH. But nothing should deter us from making further investments looking at the growth opportunities. Therefore, this gives us the clue to invest in niche Mid & Small Cap Funds.

Can You Analyze My Mutual Fund Portfolio? Is it Right Time to Opt for Large-cap Funds for 3-4 Years?

What should I do when market is down
These are questions we receive daily, thru various mediums (like Quora). Is this right time to invest in Mutual funds? Which Mutual funds are best? What is the correct time frame to invest in Mutual Funds? and many more…
So today I am sharing summary of the answers I have already posted on Quora.
It’s great to see that you are clear on your investment objective. But what is not logical, is the fact that; you want “Advisory Services”, which is free of cost, and that too, thru an open forum like Quora. That’s the biggest mistake you are undertaking, for your savings.
First, Direct plans are only meant for people, who can do independent research on their own, i.e. don’t need any guidance or help whatsoever, whereas you are seeking help.

Even though some Samaritan may offer you advice today, but next 25 years, who you will ask these questions? which will coming again & again, as market will give swings (market fall, like last 6 months)? on what next? Also, you may have question, is the advice biased?

Rule of Life: Nothing comes FREE, and if its free, there is a CATCH!


My 1st Home – When & How do I plan?

Buying House-How to plan

Amit and Neha are a perfect love story. They met in a college and it was love at first sight. The college years went by dreaming about their life together, getting married and having their dream home. They used to spend hours imagining how they would decorate their sweet home. After completing their studies and starting their careers, they decided to take the plunge and get married. As their parents happily agreed, the next step was to own a dream home. But they realised that having their dream home was not easy. All these years they dreamed about house but never did the homework of buying a house. They consulted a financial planner who guided them about buying a new home.

First and foremost is to look at the savings that has been made to buy the house. Since they were both salaried pooling of their savings could help them to set aside higher sum for initial payment of the house. Besides this, they looked at the options of borrowing from parents and friends who could lend them for a short duration. They figured out that they will have to save for at least two years before they could decide to buy a house.

The monthly savings also gave them an idea of how much share of their income can go toward payment of home loan. Ideally a share of around 25% of combined income would ensure that there is enough balance to take care of their monthly expense. Based on the prevailing interest rates and longer-term loan of 20 years could help them to know the amount of loan they could avail to buy a house. The financial expert can guide them to regarding the loan procedure like selecting the housing loan company, type of interest rate (fix or float), Interest subsidy under government schemes.

Based on the loan amount, the value of the house can be arrived and then selected based on their budget. Since the New regulations like Real estate regulation Act has protected the rights of buyers they could go for under-construction property that could be ready in couple of years. Here the selection of developer with good track record and flexible payment plan can help them to pay later as the project gets completed. This could give them time and resources to get married as well time to do more savings as their incomes increase. Once the property has been shortlisted completing the paper work will be the next important task which takes time as well as resources.

The journey from dream home to owning it in reality sounds arduous, but the joy of stepping in your own house with your beloved is immeasurable. This not only requires to dream from your heart but adequate financial planning to make it happen.

My MAIL-box is cluttered with Mutual fund mails – What do I do?


Mailbox once a boon for instant communication has become a pain today. Due to lots of promotional and unwanted mails, it becomes difficult to find the relevant mails. As I have invested in mutual funds, it becomes necessary to see these mails. But nowadays the mailbox is flooded with so many mails from the mutual funds that it has become time consuming. Recently SEBI introduced standardisation of various schemes so that investor can understand them. All mutual funds are supposed to communicate the change in fund to investors. There has been a surge in mails mutual fund due to this reason. Another change has been the computation of Expense ratio. With so many mails and technical explanations, common investor is bound to be confused. What is one to do?

The wisest thing to do is to visit websites of financial planning that give updated information of changes in Mutual fund industry in simple terms. They also guide to understand its implication on your mutual fund investments. Second option would be speaking to financial planner who can help you understand the impact of the changes on your portfolio. So rather than spending time on reading mails, just contact your financial planner and clear all your doubts. In fact a good financial planning advisor will update their investor of these changes and guide on its impact on the investments made.

My SIP is showing a lower return? What to do?

My SIP is showing a lower return? What to do?

India is going thru one of the most uncertain times; as national elections are due in a year’s time to decide on current incumbent or the new stakeholders, US trade war has intensified with Trumps unrelenting signature, Crude surge is unstoppable with OPEC targeting USD 100 per barrel, and many more related events.

All these events are resulting into stock markets behaving badly. This is where one gets to see a difference between the Matured & Panic state of mind.

SIP is a monthly commitment on an individual’s saving, to be invested in funds based on risk, objective & the asset allocation model. One of the key feature of a SIP is the Price Averaging, which means, one is entering or buying Mutual Funds at various price points. These price points can be low, as-well-as high, based on the stock market swings. In-short, one gets to invest at low points in the market, as-well-as high points in the market.

We are today going thru a phase, where we are witnessing such low points, and this may continue for some time to come. But it’s a big opportunity in hand, to buy at low price and to bring the overall cost down (total invested value), by the Rule of Averaging. Therefore, whenever the market is low, even though overall returns will be lower (earlier purchase), but it’ll be the best time to enter market (buy), or even TOP-UP on SIP (increase).

You invest in equity SIP, keeping in mind a long-term horizon (at least 5 years+). Equity market has always given good returns, whenever the holding period is long, with “Matured state of mind”.

All that’s required; is to keep in touch with your advisor, such that you have someone who you can reason & talk, on your portfolio or on any financial query.

Sabbatical – 1 year freedom from hectic work-life; but how do I plan my finances?

are you prepared for Sabbatical

Exhausted and tired from long day at office and travel, Amit Kumar went to sleep wondering if this is life that he will live all through. He dreamt of his childhood days and all that he could enjoy doing it. He remembered how he was good at telling jokes and doing performances in school and village programs. His wild imagination saw him doing what he loved and making name for himself. Though he earned decent enough he was happy doing it. He liked living in serene countryside in the beauty and solitude of nature. But suddenly his dream was broken to reality as his wife woke him for sleeping late. Fortunately, it was week-end and he kept wondering if he could live his dreams.

He discussed the dream with his wife who made him realize his responsibilities and financial liabilities. His wife also yearned for a life that he talked about, it needed taking a break – a sabbatical from work and find out if things worked. They started financial planning about their monthly expenses and other one-time commitments. They did month by month planning of all the events that would mean outgo of money and how to arrange for it. They looked at all the discretionary expenses they incurred like weekly outing expenses and if that could be reduced to improve savings. They also looked at some money that they had invested for travel plans and if that could be utilized. Increased savings per month helped him to create a buffer of 1-year expenses in 6 months’ time. This made it possible for him to take break from his job to pursue what he loved to do.

Mutual Funds = 2-minute Maggi Noddle

Is mutual funds selection as easy as instant noodles?

Sounds exciting! This is the story of Mutual funds today.

We all are looking at Mutual Funds like a 2-minute Maggi noddle. Maggi is promoted as an instant noddle, i.e. it can be cooked in flat 2 minutes, without any hassle & help, compared to Chinese noodles, which requires time & effort.

Mutual Funds on a similar note, are projected as the best investment avenue, where one can easily shortlist funds (with diverse options), and execution (buy) takes not more than 10 minutes effort (as claimed by many).

But it misses out one of the important piece; i.e. Mutual Fund is not a commodity, which you can experience & feel instantly. You buy Mutual Funds from some objective in mind, which will result in returns (how much you want your money to grow), and same can be experienced NOT NOW, but after 5/10/15 years of holding.

What if, the desired returns don’t come? Can you go back 5/10/15 years to the seller & question?

Mutual Fund offers one of the best investments avenue, no doubt. But to arrive at the right fund, one needs to go thru a process, which will usually depend on your financial standing, data & your advisors know-how.

How to find the right advisor? Usually an advisor, will first try to understand your requirements, in the form of your objective, returns, holding period, risk, cash-flow. Post that, will offer you insights on asset allocation, returns expected, risk & funds selection. This entire exercise will last for few days to few weeks, depending on how many times you will ask, WHY? 😉

How to build your first CRORE

How to build your first CRORE?

Deepak was a daydreamer. He often used to dream of living a life free from 9 to 5 work life, pursuing his passion and creativity, spending time with family, doing social work etc. He wondered how much amount of wealth or bank balance is needed so that interest earned could take of his living and give him enough time to live life on his terms. He figured out that One crore kept in mutual funds could take care of his monthly expenses with some surplus to take care of contingencies. So, creating a wealth of one crore became his driving force to earning as well defining economic discipline. He also understood that just savings is not enough; the saving has to be utilized to create further wealth.

Deepak took a job as this was the only source of income possible for him. Savings from salary became his source of capital. The focus was on increasing earning and saving every month. He started studying various avenues for investment like equity markets, mutual funds, gold, real estate, business etc. He realized that aggressive equity mutual funds could help him to start with to get higher returns. In a year, he also invested a small percentage in blue chip companies. He also started side business during weekends to increase his income. To create his wealth, he had to budget his income and prioritize his spending when others of his age were spendthrift. This not only made him financially wise but helped him to get maximum value for money. Starting with monthly savings of Rs 10,000 he increased it by 25% every year. His early age gave him the opportunity to take higher risk with higher returns. Though the initial 2-3 years were trying, the accumulated capital grew faster and he was able to achieve his goal in 7-8 years. This may sound simple and achievable only requirement is financial discipline and proper investment strategy with balanced risk.


Pay hike or Bonus – how do I Plan?

Pay hike or Bonus - how do I Plan?

There are few days when one is eager to reach office in time. It’s the day of declaration of performance appraisal or bonus. Both mean increase in take home income that could be used for various things. One will find that in almost all cases the money to be used for, is decided quite in advance and mostly for some holidays or buying some new things. Very few follow the principle of using the increased income to reduce liability like loan or invest for long term benefits. A random survey would indicate that a very small number have a financial plan in place and allocate their money according to the plan.

Let me give you another perspective of looking at bonus. It’s in way deferred salary paid at the end of year so that one gives better work performance. The lump sum amount received in bonus can be used in two ways- to clear loans and thereby reduce EMI burden or invest in asset creation by parking the money in mutual funds or other investment options.

In case of pay hike, which is certain percentage increase in monthly salary, one of the most important aspect to remember is that, part of it will be offset by rise in monthly expenses on account of inflation, education expenses etc which are basic expenses. The net surplus after adjusting these expenses is the net increase in income. A part of these could be saved in form of SIP of mutual funds. One important aspect that needs to be remembered is balance between spending for today and investing for future. If the above principle is followed any income flow will be get used judiciously.

Show Buttons
Hide Buttons