Inflation, Interest Expectation and Asset Prices

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 […]

9 Investment lessons : must know these

If there are a few basic investment lessons, and you must know, these are the ones: 1. The earlier you start the better, but TODAY is surely better than Tomorrow. 2. Your total return depends on how much return you get on each portion of your portfolio. So if 10% of your money is in […]

buying assets without borrowing….

  When it comes to buying any asset – I am using the word loosely there is a tendency to borrow. Borrowing actually helps you immediately by allowing you to buy beyond your means. The problem with most things we buy is that once we buy it, it ceases to hold any attraction for us. […]

Advising friends is dangerous too!

  Sometime in 1994 a friend wanted to keep some money in a fixed interest bearing instrument. The amount was about Rs. 15000. He kept it in one company – let us call it Company A. Sometime in 1999 I was surprised to see that he still had his money there. I told him and […]

Are you better off than 5 years ago?

Well, if you were in the US and I were a Pres candidate…i would have been forced to ask you this question. Well politics aside, this is a question that you should keep asking yourself EVERY year. In case of your personal life, hobbies, work, relationships, etc. you need to frame your own questions.I do […]

Bad Financial Advice heard from planners…..

We are in the cowboy stage of financial advisers. Let us say something like the 1970s of the stock exchange or the 1940s of the banking industry! Let me list a few: 1. If you do not understand equity markets stay away: Correct advise only if you are so damn rich that you are not […]

Rational reasons for real estate prices to be high…..

If you believe that all bubbles are created by RATIONAL reasons and causes taken to IRRATIONAL HEIGHTS, welcome to the post. Is Mumbai real estate terribly high and unaffordable? Yes. Let us come to some RATIONAL reasons why people buy: 1. If we do not buy NOW we will never be able to buy in […]