I have referred to investment risk very many times in the past. This is a really scary risk in the Indian context NOW, as the inflation rates are sky rocketing. What exactly is Inflation risk? Inflation risk is the danger that an increase in price levels (normally for a sustained period of time)  will […]

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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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Many people tell me they want to build a risk free portfolio. I tell them I hope you understand what is risk. They say yes. Here, these are the words that they need to know: Currency risk, inflation risk, systematic risk, principal risk, country risk, economic risk, mortgage risk, liquidity risk, volatility as risk, risk […]

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A few days back I had done a story about risky financial behaviour.  I had said 1-6, so here are the another 6 – from 7 to 12. I did not want to say here are 6 in a set of 22…’cause I wanted to leave it open ended.. 7. Time diversification: You cannot pay […]

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Like a holistic approach to personal health, the process of providing financial fitness involves four basic steps. If you have the time, objectivity and expertise in investments, taxation, insurance, and estate planning, you can complete this four-step process on your own. However, most people find it helpful to seek the aid of various professionals to […]

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How safe are government securities? Is this a question bothering you? Welcome. Many people have asked me this question, and I have struggled to explain the answer. Central Government securities are 100% safe. These are what are called ‘Soverign Paper’ and is guaranteed by Pratibha Patil – the Government of India! Interest rate payments, principal, […]

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