May 9, 2012

Test your Financial IQ (#1): Calculating Stock Returns


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Learning to managing money intelligently and improving our financial lives also involves feeling comfortable while dealing with numbers. For those who invest in stocks, try this test to judge your Financial IQ:

Questions:

Q-1: A stock has fallen 30% this year after rising 80% last year. What is the net return? Is it 50%?

Q-2: If a stock you purchased is down, say 80%, how much it should rise to bring it back to your acquisition cost i.e., how much percent returns are required to bring it to the same level? Is it 80% , 100% or 200%?

Q-3: You own a stock which has continuously risen

Mar 28, 2012

An Investor or a Gambler?

Currently the Sensex is hovering in the range of ---.After touching ---it is on a continuous decline during last few weeks. The last Sensex closing price was ---with a P/E of ---. Still the market is overvalued because the historical long term average PE (Price to Earnings Ratio) of the Sensex and Nifty is around --- whereas the current P/E is ---.

Don’t you come across such statements in the pink papers? No discussion, analysis of either an individual stock or market is complete without the mention of P/E. Now please tell me: Does it make any sense to you or simply went over your head?

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Let’s say you’re thinking of buying a stock…you’ve to choose between

Mar 4, 2012

PMS: Is it Portfolio Management or Mismanagement?

Heads we win, tails you lose!

So you think that you’ve acquired the status of a HNI (High Net worth Individual) with a few lakh to spare and are looking beyond the realm of mutual funds either because already heavily invested in them or to design a customized portfolio for yourself or just to pamper your ego.
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And here comes your wealth advisor with a exotic product called PMS (Portfolio Management Services) and tells you that it will provide you returns far better than plain-vanilla mutual funds. And you’re wondering, why not go for it?

Ok, now just try guessing

Feb 17, 2012

Best ELSS Funds 2012

Before we select the Best ELSS funds for the year 2012, let us first recall the earlier discussion:

1. Why ELSS is considered as the Best option under Section 80C?

2. How to invest in best ELSS funds

3. Best ELSS Funds for 2010

4. Which is the best option under ELSS: Dividend Vs Growth

5. 5 Guidlelines for investing in ELSS

Last time, the procedure adopted for selection of Best ELSS funds was a very detailed one…this time I’m simplifying it. Currently, there are around 37 Equity linked Saving Schemes (ELSS funds) in the market; before we choose the best ELSS, let us see the performance of

Feb 6, 2012

EPF & EPS: Facts you should know about

I’ve already covered PPF extensively, but hardly wrote anything about EPF (Employees’ Provident Fund) & EPS (Employees’ Pension Scheme) assuming people are well aware of its working…but the reality is otherwise…I’ve come across scores of people who hardly know anything about EPF working although making regular contributions through their employers.

So this post is an attempt to shed some light on the little known aspects of EPF & EPS:


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Provident Fund & Pension Contributions:

Q-1: What is EPF? What is EPS?
A: EPF (Employees’ Provident Fund Scheme 1952) and EPS (Employees’ Pension Scheme 1995) are the two different retirement saving schemes under Employees’ Provident Fund and Misc Provisions Act, 1952 meant for salaried employees. (Note: Government & Semi-Government Employees are covered under Provident Funds Act, 1925 which is not being covered in this post)

Q-2: Is it mandatory for every employee to make contribution towards EPF & EPS?
A: Yes, it is mandatory. However, employees drawing a basic pay of more than Rs. 6,500 have option to

Jan 14, 2012

Health Insurance: Becoming a Necessary Evil

Some time back I came across the news that insurance companies are planning to raise the premium of health insurance products to neutralise the rising cost of healthcare…the medical inflation was pegged at 15-20 per cent per year.
Photo by seiuhealthcare775nw


Now the moot question is whether inflationary healthcare costs are driving the demand for health insurance or increasing health insurance is driving the inflation in healthcare costs? Which is the cause and which is the effect?

If we say that

Dec 12, 2011

GOLD ETFs: FAQs #2



Since I wrote Gold ETFs FAQs around two years back, the gold prices have almost doubled ( Rs 28,960 per tola as on 9th Dec 2011)and every investor is trying to include gold in his portfolio.

While deciding about investing in paper gold, one comes across questions such as

1. Why should we invest in Gold ETFs or Gold Saving Funds (also called
Gold Funds) instead of Physical gold?

2. Is it right time to invest in Gold ETFs or Gold Funds?

3. How do we invest in Gold ETFs or Gold Saving Funds?

4. What is the difference between Gold ETFs and Gold Saving Funds?

5. Which is a better among the two: Gold ETFs or Gold Funds?

6. Which are currently available Gold ETFs & Gold Funds in the market and what is their performance track record?

7. Which is the best Gold ETF? How to choose among the so many available Gold ETFs available in the market? Similarly, which is the best Gold Fund?

See, I have already answered many questions in Gold ETFs FAQs and remaining ones are answered here:

Q-1:- Is it right time to invest in gold?
Ans: Indeed, a very difficult question to answer.