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How To Calculate The Returns From Your Mutual Fund Holdings?

December 12, 2012 2 Comments

wealthymatters.com If you have made a one time lump sum investment and opted for the growth/dividend reinvestment options here is the formula: CAGR = [(final amount/amount invested)^(1/tenure)] – 1

In case you have a SIP and have opted for the growth option,then use the IRR feature in excel to calculate your returns.

In every other case use the XIRR feature in excel.

Remember that money out of your pocket is marked”-” and money into your pocket is “+” while calculating IRR and XIRR. For worked samples see this link.

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Planning Your Emergency Fund

December 12, 2012 2 Comments

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The graph above shows the value of an individual’s emergency fund expressed in the number of weeks worth of expenses vs. the percentage likelihood of having an emergency that would wipe it out. It starts at 100% with no emergency fund and works down to about 3% at 52 weeks worth of expenses in reserve. Read more of this post

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What To Expect From Penny Stocks

December 11, 2012 Leave a comment

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Muhurat Trading

November 14, 2012 6 Comments

The festival of Diwali is associated with Laxmi, the goddess of wealth; it is considered an auspicious time for spending and earning money. The customary trading tradition on the day of Diwali is unique to India where markets open for a short duration in the evening to pay obeisance to Lakshmi, the Hindu goddess of wealth and prosperity. This Muhurat Trading is a centuries old tradition. The day holds significance as it marks the beginning of the New Year, as per the Marwari tradition.Also the Gujarati new year begins a day after Diwali.

More often than not, the benchmark indices have ended higher, albeit by a small margin. The time for trading is specified by the exchanges and usually takes place for about an hour.This year,the Muhurat trading happened on 13 November between 3:30pm and 5:15pm.

Muhurat trading happens not only in stock markets but also commodity exchanges. Major commodity exchanges like MCX, NCDEX and others were open for trade from 5:30 pm to 8pm. Read more of this post

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India’s Shrinking Business Cycle

October 19, 2012 2 Comments

If y wealthymatters.com ou have a ladder of fixed income instruments or are looking to take on debt,it helps to be able to have a feel for the interest rate cycle.I came across come interesting inputs to help in this effort in yesterday’s newspaper.

The chief takeaways of this article are:

1.By watching the long-term investments in infrastructure,maybe 10-15 years into the future,we can call the GDP growth rate.At present it is likely to be 5-7 %.

2.The current RBI governor has commented that the potential growth output frontier has shrunk to about 7.5%.

3.During the growth phase of the business cycle,when the growth reaches,85% of the capacity,which is about 6.5% growth,RBI will likely apply the brakes.

4..The business cycle time period has reduced from a previous 7-8 years to 1.5-2 years.