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Private Equity lessons for Personal Investing
Published in Business Standard on 6th April 2019; This article evaluates 'Credit Risk Funds' and the revised title of the article is 'Seven questions that private equity investors ask when making investments' ; Cached copy of the article
The mature approach to personal finance
Published on FreeFinCal's YouTube channel in March 2019; This link takes you to the same content in the form of an article
How even DIY investors can benefit from a registered Investment Adviser
Published on FreeFinCal.com in February 2019; The second-half of the article also covers 'Why you should avoid Structured Products'
The two-headed Goliath—Mutual Funds and their distributors
Published on The Ken on 10th January 2019; In this article, I am recommending zero-commission plans / Direct Plans and index funds / ETFs; The article is behind a paywall, but free registration at The Ken provides access to a 200-word summary of all their articles; This is an excerpt from the summary:
'Investors have been pushed to take too much risk because equity funds have the highest fees/commissions; Indian mutual funds, as a whole, do not beat the index; distributors use ambiguity in the regulations to push schemes with the highest fees/commissions and mutual funds like this arrangement; no one can predict which mutual fund schemes will have the best performance even over a 10 year period. In addition, Indian MF fees and commissions are some of the highest in the world.'
These are two excerpts from the article:
'Unnecessarily high fees of [Mutual Fund] AMCs and unnecessarily high commissions of distributors force investors to pay fees of an estimated 2% per annum as opposed to a more reasonable 1%. This 1% of excess fees eats up 1% of an investor’s investment each year. While the exact amount is debatable, the long-term impact is clear from simple arithmetic. If an investor surrenders 1% of her investment each year, then cumulated over 30 years, she has lost 26% of her investment.'
'Sanjiv Shah [former CEO of Goldman Sachs’ Indian MF and co-founder of Benchmark MF] offers a damning verdict of this arrangement [between Mutual Funds and their Distributors]. “Due to a distributor’s skewed incentives, in many cases, a distributor’s value to an investor may not just be zero, but may actually be negative—the distributor may be subtracting value from an investor.” Shah gives the example of equity funds versus debt funds. Since the former pay higher commissions, he says, distributors push investors to invest more in equity funds, even if this could be harmful to the investor. A visible sign of this is that two-thirds of MF investments by individuals are in equity schemes, despite the vulnerability of these schemes to stock market crashes.'
Are you taking too much equity risk?
You can mitigate domestic risks by investing abroad, here's how
Published in Business Standard in September 2018; Cached copy of the article which will download in PDF format; Note: The correct date of publication of the academic paper referred to in this article is June 1999; Update: After this article was written, a feasible option that came up is Motilal Oswal Nasdaq 100 Fund of Funds - Direct Plan, with total fees of in the ballpark of 60 bps p.a. (including the fees of the underlying Motilal Oswal Nasdaq 100 ETF) plus some bearable invisible costs at the time of entry and exit
Three Financial Risks to Plan for Before Retiring
Turn no-free-lunch from an opponent to an ally
Published on FreeFinCal.com in September 2018;
Update: After this article was written, I was able to get verbal clarification from Parag Parikh MF about the redemption timeline for their Liquid Fund. Hence the Parag Parikh Liquid Fund is somewhat similar to the Quantum Liquid Fund.
Living with Zero Real Returns
Note: Brief quotes may not cover various nuances or the language may not be precise so please take them with a pinch of salt
Published in Business Standard in January 2019; In this article, I am recommending against exotic index funds / ETFs; This article is behind a pay-wall
Published in Business Standard in January 2019; In this article, I am recommending index funds; This article is behind a pay-wall
Published in Business Standard in November 2018; In this article I am not recommending active funds but I am responding to a specific question about active funds; This article is behind a pay-wall
“My approach to financial planning primarily focuses on mitigating the downside instead of focusing on maximizing the upside. The reason is that maximizing the upside will require taking an irrational level of risk. And there is no predictable low-risk way to get rich through investing...”
Excerpt from 'My List of popular Fee-only Financial Planners in India (Part-2)' published on ReLakhs.com in March 2019
Published on FreeFinCal.com in January 2019; The article mentions us collaborating on learning from each other's best practices; An additional quote by the editor of the article, Professor Pattabiraman M, IIT Madras: "Avinash Luthria from Bangalore is also a super competent advisor, part of my fee-only list. You can consider working with him too. "
Professor Pattabiraman M, IIT Madras and he runs FreeFinCal.com:
Published on FreeFinCal.com in January & February 2019