It is a known fact that the returns of an investment instruments (say mutual fund) and the actual return of an investor vary significantly. Why is that? Before we take it up, let’s look at this question. Is it advisable to continue SIP for ICICI Prudential Dividend Yield Equity Fund Growth Direct Plan (return of -3%) and ICICI Prudential Multi cap Fund Growth Direct Plan … [Read more...] about How to generate behavioural alpha?
Recently, I asked for your help on evaluating an investment product. An executive of a large mutual fund company pitched a mutual fund product. The investment uses a dynamic asset allocation method where they would invest in a set of equity and debt funds based on predefined allocation and also rebalance the portfolio to maintain the allocation. He claimed that this asset … [Read more...] about Does this investment make sense?
Today, we are doing a role reversal. Today, you are going help me make a decision to invest in a product. I am sure over time you have got a good understanding about evaluating financial products and hence I call for your help. Here's what happened and why I need your help? … [Read more...] about Can you question this portfolio performance and win?
The Sharpe Ratio is one of the risk adjusted returns method used in evaluating financial investments. Created by William Sharpe, the ratio tells us how much an investment instrument compensates us for the risk it takes. Put it simply, life is good without risk. You and I can safely invest in a government bond, a bank FD or a PPF and ignore all the volatility and market … [Read more...] about The problem with Sharpe Ratio and other measures
The Unovest twitter handle follows The Motley Fool. The Fool shares some really insightful notes, quotes and posts. I couldn't help but share this one with you today on what causes financial ruin. The road to financial regret is paved with: Debt. Commissioned salesmen. Shortsightedness. Ego. Poor education. Overconfidence. — The Motley Fool (@themotleyfool) July … [Read more...] about The road to financial ruin and how to avoid it