In all my financial interactions – be it planning for clients, training, teaching or writing, people have come to me with some problem which they think is unique. In all the financial problems, I am able to find a pattern. Believe it or nor, people more often than not choose the problem by their behavior. […]
There is one person who is rarely quoted in Financial Circles. He is George Bernard Shaw. He said “Whenever I go to my tailor, he measures me up”. I wish all of us would do it! Once we decide on a particular thing we do not let new facts change our minds. We carry prejudices […]
Suzie Orman says: Keep enough money in ultra safe accounts to cover life’s emergencies, – say 8 months expenses – but no more. Financial planners talk only of an income emergency. They do not talk about an asset emergency. When your assets crash and you are reluctant to sell at the current prices it is […]
Most financial planners and personal portfolio managers are questioning their basic assumption of asset allocation. In the year 2008 asset allocation failed. This of course is their conclusion based on a set of data. Data is accurate but the conclusion seems to be a little flawed. In the years from 2002 to 2007 (when Mr. […]
While doing a risk review of a portfolio, I stumbled on a portfolio with 55 mutual fund schemes and 52 direct equity investments. When the investor asked me what was the risk, I said there was ‘concentration’ risk. I also told him he was running the risk of ‘over-diversification’ . He asked me to speak […]
I have a nephew in high school and he had to say a few things about money: 1. I carry money to school, but never lend it to my friends: I am not sure whether I will get it back from them or not, so I do not lend it…..NINJA anyone? 2. I buy things […]
The key to quality insurance is in choosing a good quality Agent. The word agent comes from the Indian Contract Act, 1872 and it is the Christian name for the guy who brings insurance / mutual fund product to your door step. Nowadays they have various names like Consultant, advisor, and the like, but I […]