The distributor and his fate….

The most maligned person in the financial service space is the distributor. It is he/ she who provides the last link between the financial product manufacturers and the end investor. Let us describe the typical distributor: He earns about Rs. 2-3 lakhs a year (a decent MBA would not EVEN consider looking at such a […]

Understanding Bond Funds..series…

I have been receiving queries about investing in fixed income  securities. Not sure whether it is an indication that Indians are pulling out of equity markets (read the article on Bloomberg about this) or banks are giving real poor interest rates. So let me run a series of questions. 1. Should I invest in a […]

Choose your advisor carefully

I have done this post many times in the past…here is one more attempt. When you require a PERSONAL FINANCIAL ADVISOR, you are looking for a fee only personal finance advisor. Let us see who are NOT  pfas: 1. Your bank relationship manager: He is a paid employee who has sales target. Remember, I have […]

Rags to Riches in 18 minutes…

  As a financial planner I do spend a lot of time with 16 year olds working in call centers, media companies, banks and so on. When I am with them and discussing their problems, the one question that often comes to my mind is, “If these guys cannot make their monthly salary stretch one […]

Colour coding in mutual fund investing: Risk colours blue, yellow, brown!

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 […]

Debt fund vs Fixed deposits

  What are the options that a person has when he/ she chooses to invest in a debt instrument? Well the choices are: 1. Bank fixed deposits:  requires very little explanation. 2. Company fixed deposits  not a big range of companies available, but a good option. 3. Company Bonds: Right from Tata to Sriram and […]

Conflict of interest

If you do not know who is paying your financial planner, take heart, you are paying a much higher price than you want to. Frankly it does not matter what a person calls himself / herself. If a person says ‘I will spend time with you and make a financial plan, and I will charge […]