Today, I will try to answer 2 questions that I’ve been asked more than a few times: How should you rebalance your portfolio to replace underperforming stocks? How frequently should you rebalance your portfolio? Naturally, the answer to both these questions will depend upon many things most importantly – risk profile of the client and…
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What Are Payment Banks And How Can They Ever Work?
What are payment banks? According to RBI guidelines: the objectives of setting up of payment banks is to further financial inclusion by providing – small savings accounts and payments/remittance services to migrant labour workforce, low income households, small businesses, other unorganised sector entities and other users. What does it mean? Nothing too complex – it…
Best Stock Valuation Method – Listed vs. Private Companies
There are 2 rules to stock valuations: First, there is nothing like a best stock valuation method. Second, The rules vary based on many factors including (but not limited to) type of company – private vs public; nature of business – cash generating business vs. business that operate with big debts; capital structure mix (i.e.…
How to Start a Systematic Investment Plan (SIP) in Mutual Funds
Systematic Investment Plan (SIP) is a regular and disciplined way of investing money in mutual funds. SIP allows you to invest a certain pre-determined amount at a regular interval (weekly, monthly, quarterly, etc). An SIP is a planned approach to investments and more than anything it helps the investor inculcate the habit of saving and…
How Can Indian Residents Buy Foreign Stocks – Direct & ETF Route
I am sure you have thought about investing in Google, Apple, Microsoft, Wal-Mart etc. Despite the fact that these companies are not listed on Indian stock exchange(s), Indian investors can still invest in them either directly or as part of mutual funds/ Exchange Traded Funds (ETFs). How Much Can Indian Investors Buy Foreign Stocks? The Reserve…
Advantages of Forming a Company Over Proprietorship
One of the most critical decisions you will face as a business owner is whether to incorporate (i.e. form a private limited company) or to operate your small business as a proprietor. You should consider three aspects before answering this question: Number of stakeholders. At what stage is your business? What are your long term…
Calculate the Correct Amount of Life Insurance
Of course you can get insured for as much as you want. Higher the insurance amount, higher will be your insurance premium. Higher the premium; better it is for the insurance company. In any event you must draw a line somewhere, right? How much annual premium would you like to pay? Read: Insurance Planning –…
10 Bad Financial Decisions to Avoid
[1] Selling an asset ‘only’ because it is doing badly – Mutual fund holders and share holders are different when it comes to the time it takes for each category to give up on investments. Typically a fund holder will compare his returns with overall stock market returns every 2-3 years. A retail investor in…
Financial research and analytics of Indian companies
What exactly should you be concerned about before diving into a business, either to buy or to operate as your own? What do you have to do to run a fund house? A brokerage firm? A small scale manufacturing unit? Or, a service oriented business? Equally important is to understand the laws, rules and regulations…
A Checklist to Conduct Basic Due Diligence in India
Even before you begin to get interested in buying a business or asset, there is a series of checks which you should perform. Often, companies engage legal and consulting firms to conduct basic due diligence on target companies and their management. Not only is this extremely expensive but in most cases not needed at the…
How Futures and Options Affect Share Prices?
Of course, the price of derivatives (including futures and options) has a major impact on the price of the underlying share (and vice versa). How can you as a trader benefit from this co-relation has been the subject of many books and much research work. While it is not important to trade on this basis,…
Can you buy / sell stocks after market hours?
Constant news flow and major corporate announcements after market hours make many wonder if they should buy/sell their stocks as soon as the market opens? For example – when a company reports really bad quarterly results or an extremely bad news surfaces post trading hours, far too often, investors wonder if they should sell their…
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