Risk in mutual fund investing comes from: a) not knowing what you are buying b) not understanding standard deviation of the instrument c) not understanding that the past performance is completely useless for knowing what will happen in the future. Let us take just one ‘type’ of fund: The Gilt Fund. All asset management companies […]

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If you ever wanted to know how lobbying works, or how any government loots…read on: The government makes a lot of money by introducing a Security Transaction Tax – paid by all buyers and sellers of equities. This is a fantastic tax – it collects a lot of money and the government has to collect […]

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I hope Dr. Khan finds this article useful…Arjuna seek your answers here: Many people have been screaming about real estate as an investment. Well I have nothing against it, except that I do not understand it. Given limited brain power, I would rather not do it, instead of making a mess of the same 🙂 […]

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Mostly people look for capital gains. Not sure why …maybe it is the media effect or friends effect.. Sadly not enough data is available in India about the returns – even company websites do not have the details. For e.g. I cannot know how my shares have fared if I bought Wipro in 1980 for […]

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There is mis-selling in mutual funds. True or False? Frankly I do not know what is mis-selling so I cannot comment. This is what a rational person is supposed to say. But our powerful mandarins say yes, yes…we will legislate against it. Will the SEBI please stand up and come out with a white paper […]

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Leveraging (like derivatives) is neither good nor bad. Huge wealth has been created by leveraging (Reliance, Tata, Uday Kotak (net worth Rs. 30 lakhs to market cap Rs. 26,000 crores in 25 years) – and also ALL bankruptcies have been caused by bad management of debt. There are many advantages of gearing or borrowing: a.   […]

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