Balanced Funds are the new lifeline for Mutual Fund Industry. These funds are also known as hybrid funds. Balanced Funds are of two types i.e. equity oriented and debt oriented. Equity oriented balanced funds invest 65% to 80% in equities and balance in debt instruments. On the other hand, debt oriented balanced funds follow the reverse strategy and invest around 70% to 80% in Debt Instruments and balance in equity. They are also referred as capital protection funds. I explained the same in my post, Should i invest in Capital Protection Funds? For practical purpose, Balanced Funds means ... Read More
Risk Free Equity Investment – Whether it is Possible or Not
Risk Free Equity Investment must be sounding bizarre statement. You must be thinking Risk Free Equity Investment is not possible at all. After recent turmoil in the stock market, i was wondering whether it is possible to invest in equity with ZERO risk. The answer is YES. Next thought in your mind is what's the big deal; i can invest in Capital Protection Funds. I agree, but here we are discussing direct equity exposure. As i shared in my post on capital protection funds that approach of a fund manager is bit conservative. Secondly, after recent developments debt mutual funds can deliver ... 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
Debt Mutual Funds – 7 Hidden Risks
Till few years back i was quite bullish on Debt Mutual Funds. The Great Crash of Debt Mutual Funds in July 2013 shattered my faith in Debt Mutual Funds. The most impacted funds were Liquid Mutual Funds that are considered to be safest among all. Liquid funds invest in money market instruments. The lower maturity period makes them best investment option for short term. I regained my faith in Debt Mutual Funds and invested in Long Term Debt Mutual Funds. The last one year is also not good, especially for long-term/gilt debt mutual funds. We will discuss this later in detail. The 1 month return ... Read More
Harsh Reality of Negative Mutual Fund Returns
Negative Mutual Fund Returns is today's harsh reality. In past, i always cautioned my readers that it's a myth that Mutual Fund Returns cannot be negative. A market meltdown does not spare even the best managed mutual funds. I was quite disheartened to see some of the best names delivering negative returns on a y-o-y basis. The three months and six months Mutual Fund Returns are negative for almost all the mutual fund schemes. When i wrote a post, Why you should not invest in SIP? i received some sharp reactions in my mailbox. Mutual Funds are projected as safest bet to invest in equity market ... Read More
7 Steps to Select Right Mutual Fund
Selecting Right Mutual Fund is like selecting Right Life Partner. Any wrong decision can wipe out your personal wealth. What makes it more difficult is volatility in performance of mutual fund. Some people select Mutual Fund only on the basis on their rankings. In my post on Misleading Mutual Fund Ranking i highlighted disadvantages of same. I would like to ask my readers, if mutual fund rankings are 100% correct then all portals or financial advisers should suggest same set of mutual funds to their clients or readers. You will find large variation in the rankings of Mutual Funds. Second ... Read More