The New Case For FDs

wealthymattersYou can’t run a shop without cash in the till. And in the same way you can’t get through life smoothly without a certain cushion of readily accessible cash that you can dip into as per your need. For quite a while now, readily accessible money meant various types of bank accounts, stocks and mutual funds that you could cash in fast whenever needed even as they continued to grow quietly in the background.

However, this year’s budget has changed the situation a bit on account of the 2 quotes below:

The return on investment in equity is already quite attractive even without tax exemption. There is therefore a strong case for bringing long term capital gains from listed equities in the tax net. However, recognising the fact that vibrant equity market is essential for economic growth, I propose only a modest change in the present regime. I propose to tax such long term capital gains exceeding Rs1 lakh at the rate of 10% without allowing the benefit of any indexation. Read more of this post


Dynamic Asset Allocation Funds – For When You Need To Sit On Your Hands


I’ve had my financial habits called “inertia”. So for most of the time I must be doing somethings right. There is nothing like hyperactivity and  thrill-seeking to destroy your wealth or the capacity for wealth. Read more of this post

Strategy For The Rest

Warren Buffett

On Index Funds

wealthymattersIndex funds are based on  the random walk theory. The proponents hold that it’s impossible to outperform the market without assuming additional risk.

Critics of the theory, however, contend that stocks do maintain price trends over time – in other words, that it is possible to outperform the market by carefully selecting entry and exit points for equity investments.

Four hundred seventy-three million to one. Those are the odds against George Soros compiling the investment record he did as manager of the Quantum Fund from 1968 through 1993. His investment record is the most unimpeachable refutation of the random walk hypothesis ever!

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