When Interest rates go down, bond prices go up. Almost all MBA students will tell you this. However many of them will be parrotting this without understanding what this means. Let us see what actually happens. When Interest rates go up, ASSET prices go down. This is the originally correct statement. Why and how does […]
The most misused and least understood ratio is the Price Earning ratio or the P E Ratio….Almost everybody who ‘invests’ talks about P/E ratio. I am sure there are many people who do not understand the full form but use it nevertheless. Well when a company earns Rs. 20 as its annual earnings, and is […]
a variant of this appeared in www.moneycontrol.com DATE OF ORIGINAL ARTICLE: 2007….NOW we are in 2013….please adjust all dates accordingly… Normally people invest to get returns. No doubt, everyone invests for returns. That magic figure governs the fate of all investment products. The logic in people’s minds is simple: The better the returns, the more […]
I have never been able to say what is a fee that a planner should charge? there are people who should be charged Rs. 10,000 a year and some people who should be charged Rs. 10,00,000. This should NOT depend on the time spent, it should be based on: a. have i been able to […]
There are many people who come to sell equity schemes…and here is the language they use: 1. Sir ‘Equities have given 20% CAGR in India from 1979 till today including dividends’ – so if you invest in equities for 5 years you will get the same kind of returns. Explanation: Equity returns have […]
So when you are worried about the ‘growth’ shares you should invest in dividend oriented shares or in dividend yield funds. Right? Wrong, well at least partially wrong. If you think you will get rid of your bank fixed deposit yielding 9%p.a. and invest in an equity share that yields 6% p.a. (and hoping […]
The Quarter ended – Oct, Nov and Dec 2011 will perhaps see the worst results. This is because this is the Q that will see the full impact of high interest rates, the worst economic data (cause and effect are very difficult to know), bad mood, …etc. When these results are announced, people’s worst expectation […]