Threshold Rebalancing is one of the most effective techniques to hedge risk. In layman terms, it is portfolio rebalancing. The key reason retail investors don't make money in India is that they don't rebalance the portfolio. There are two ways to rebalance the portfolio i.e. calendar rebalancing and threshold rebalancing. The concept of calendar rebalancing is similar to value investing. On the other hand, threshold rebalancing is linked to deviation from fixed target. Let me share a simple example. For simplicity purpose, i assume that my asset allocation is divided only between Equity and ... Read More
Value Investing – Best Alternative to SIP
Value Investing is the most commonly used word in personal finance space. If anyone tell you about Value Investing, then you think this person is quite a knowledgeable :). In layman terms, Value Investing is nothing but BUY at LOW Value and SELL at HIGH Value. At every critical level of the market, experts suggest it's time for Value Investing. I heard this when the market was at 8500, at 8000 and recently near 7500. Whenever an investor invest, he invested with an assumption that it is the lowest point. In short, the market will not go down further. Unfortunately, it is not TRUE. As i always ... Read More
Uber Cabs – How it cheats passenger?
Uber Cabs is now a household name in the cities where it operates. I have a lot of respect for MNC's including Uber Cabs because of professionalism and transparent approach. Usually, i don't share negative reviews but sometimes it becomes imperative when i am being cheated. The objective of my blog is to caution the readers against tactics to avoid being cheated. Though Uber Cabs is an MNC brand let's not forget that drivers employed are Indian Drivers :). From the day of launch, Uber Cabs is in NEWS for all the wrong reasons. Trust me, nothing wrong with the brand, company or employees but ... Read More
Asset Allocation – What to do now?
Asset Allocation is the biggest headache for any investor. The financial planners suggest a model asset allocation. There is a famous saying that one size does not fit all. The concept of model asset allocation is vague and farce. It does not take into account all the factors that influence investment risk. A bad mix of asset allocation may destroy your wealth at a faster rate. An asset allocation mix of the investors of the same age and income level can be entirely different. In past, i have observed extreme portfolio allocations. The risk-free investors are heavily invested in traditional ... Read More
Financial Distress – 5 Early Signs
Financial Distress, In layman terms, is the situation in which an individual may find it difficult to manage his/her personal finances. Financial Distress is not necessary linked only to borrowers. Even a debt free person can be in a Financial Distress. Another way to explain is when your expenses exceed your income then it implies that you are in a Financial Distress. Here expenses mean monthly outflow. It is an undesirable situation for any individual or a family. In my opinion, Financial Distress is not sudden phenomena. It gives timely and necessary warning in advance to fix the financial ... Read More
Job Loss Insurance Cover – Should i opt for it?
Job Loss Insurance Cover is the new buzzword in Insurance industry. In India, it is not available on a stand-alone basis from a personal finance perspective. Job Loss Insurance Cover is an add-on with Home Loan Protection Plan or Critical Illness Cover. There is a famous saying that necessity is the mother of all of invention. In literal terms, the changing job scenario is forcing the insurance providers to launch such innovative covers. Job Loss Insurance Cover is finding a traction due to fear of job loss. As a layman, an insured person's understanding is that Job Loss Insurance Cover will ... Read More
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