Investments

Index funds are fast gaining popularity in India. These funds track a stock market index like the NSE Nifty 50, BSE Sensex, etc. For e.g., a nifty 50 index fund will have all the stocks of Nifty 50 and in the same proportion. Thus, if the market moves up by 10 per cent, the index fund value also goes up in the same proportion and vice versa. The investors hence do not have to worry about the performance of the fund manager and whether the fund will underperform or outperform the market. Since the fund manager doesn’t take any active […]

Imagine a farmer growing only one crop a year, say wheat. This implies that his agricultural income is dependant on only one crop. Now suppose if something wheat-related went wrong like inconducive weather, or pest nuisance or unfavourable wheat market. The farmer is in real trouble. Overreliance on just one crop exposed him to a lot of risk. Had he diversified his crop-base to some millets, some rice plantations, etc, his income would have been protected to an extent. In the world of investments, portfolio diversification is similar to farming. It helps to effectively protect the downside in investments. Let […]

Remember the 2004-2006 period, where not just DIYers but also amateurs, first-timers made money in the stock market IPOs. Well, those signs of temptation and overconfidence have not faded since. IPOs have been commonly perceived as get-quick rich options by retail investors. Even last year post the March crash, as the stock markets soared, a lot of IPOs fared well. Retail investors need to stay cautious though. Let us understand certain hard facts about an IPO first. An IPO is an opportunity for a company to raise capital from the stock markets. Investment bankers help the company promoters in this […]

Heard of the famous FAANG stocks? The acronym stands for the famous 5 companies – Facebook, Apple, Amazon, Netflix and Google. With technology driving the global growth, more so amidst Covid times, every investor wants to have a piece of them in their portfolio. The FAANG stocks have outperformed the broader S&P 500 index for this year. But should you invest in them, or for that matter in the global markets to chase high returns?  Before you jump the gun, you should know that international equity markets are as risky or even more compared to our Indian markets. Firstly, every […]

Today, parents are bombarded with many investment options to plan for their children’s future. In insurance, you will find specific child insurance schemes. They are similar to traditional insurance policies which provide life cover and time frame for maturity.  In banking, you will find savings account options for kids. Likewise, there are also dedicated mutual fund schemes to plan for a child’s future. They aren’t difficult to identify as the scheme is likely to have the term – child or children or young – in the name itself. Do these dedicated solution-oriented mutual fund schemes fulfil the important objective of […]

When a crisis occurs and something as enduring as the current Pandemic, stock markets can be really cruel. The scale and speed of the fall could be severely harsh wiping off even 10-year average returns in a brief period. It is natural to feel anxiety, confusion and fear about our investments. I am sure there would be many investors who have vowed never to invest in the stock markets again. There would be majority who have sold in this falling market. But there has been crisis earlier and it’s the same story which unfolds every time. While the triggers are […]