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It is a widely-acknowledged practice to invest in a mutual fund that has yielded good returns in the past believing it will do well in future as well. Even financial advisors are prone to stick to this past performance benchmark while recommending mutual funds. Why everyone seems to be obsessed with the past mutual fund returns despite the disclaimer in the offer document of every fund saying clearly, ‘Past performance is no guarantee of future results?’ Studies abound showing that many mutual funds with good past returns have yielded poor results in the future. There is no close correlation between high performing mutual funds in one period with high performing funds in the subsequent periods. Regardless of this fact, investors harp on past mutual fund returns while investing in the fund. Old habits die hard is what we can say. However, we must caution you against this practice. The approach to judge a mutual fund on its past returns is fraught with danger. Here we list the...

Life is mainly a substance of expectation. Do we really live or are we forever in the expectation of living? It is said that “Expectation is the mother of all frustration”. What you are expecting in a financial planning report and what your financial planner offers in his report should match. If it is not matching, then it may lead to frustration. To have a long lasting relationship with your financial planner, what you expect from the financial planning report is more important. Let us discuss that in detail here. You can clarify your expectation and start having an acceptable expectation. 1) Current status: This section deals with the current financial status of the individual and his family. The information what you have given in the financial planning questionnaire / factfinder will be re-arranged in a tabular column for easy reference. This will contain the details like income, expenses, structured liabilities with EMI, unstructured liabilities, list of fixed assets and ...

I got an opportunity to watch a video of world chess champion Mr. Vishwanathan Anand playing a game against Boris Gelfand, the Israli chess champion. A particular aspect I noticed in both these champions is the amount of patience they apply with each move. Both of them didn’t rush to make a move upon their turn. More than talent, I feel the amount of patience they apply is the key for success here. Does the same theory apply in stock market investments as well. Do I need to wait patiently in the stock market? Can I make quick money with selling or buying stocks quite often? Read ahead to understand the answers and the amazing discovery in stock market investing that will make you wealthy. The Surprising Fact about Selling Stocks: I am selling the stocks when the market goes down and save myself from a heavy the loss. What is wrong with this? Say for example, You sell a particular stock just because the market crashed. Later you feel sorry for seeing the same stock going up a...