Diversification is the strategy to reduce risk by investing in different types of assets with different risk / return characteristics. If you split your investments among multiple asset classes, the overall impact on your portfolio, if one investment gives lower than expected returns, is significantly lesser. The old idiom, “don’t put all your eggs in one basket”...Read More

ESG stands for environmental, social and governance. In investment parlance, companies’ performance on environmental, social and governance parameters is an essential consideration in ESG investments. The fundamental premise in ESG investments is that companies which adopt ESG principles have the potential of...Read More

Volatility is the statistical measure of fluctuations in price of an asset. In 1953, Nobel Prize winning economist Henry Markowitz introduced the concept of volatility as a measure of investment risk. Volatility is of great significance to traders in the stock market, especially those who trade in derivatives (futures and options)...Read More

Goal based financial planning is a method which can help you achieve multiple goals across different stages of life. There are some common life-stage goals of most investors e.g. buying a house, children’s higher education and marriage, retirement planning and leaving an estate for your loved ones. In addition to these goals, some...Read More

Financial advisor is a person who help investors in undertaking investmentdecisions to achieve a desired goal. There are generally 2 types of financial advisors – mutual fund distributors and registered investment advisors (RIAs). Mutual fund distributors are registered with AMFI and sell mutual fund products to investors. They get a...Read More

Debt mutual funds invest in a variety of fixed income securities like treasury bills, commercial papers, certificates of deposit, corporate bonds and government bonds, primarily with the objective of generating income for investors. Almost all fixed income securities have a specified maturity period. They pay periodic (e.g. quarterly, yearly...Read More

Asset allocation is a strategy to balance risk and returns by investing in different asset classes. The major asset classes are equity, fixed income or debt and in some cases, also gold. Financial planners suggest that right asset allocation is critical in achieving your financial goals, since it is the most important attribute of portfolio performance...Read More

Volatility is the fluctuation in the price of an asset. Asset prices are rarely unidirectional in the short term. Some asset classes are much more volatile than others e.g. equity is much more volatile than fixed income or gold. Volatility is the measure of risk in an investment. The chart below shows the price movement of Nifty 50 over the past one...Read More

The lockdown imposed by the Government to arrest the spread of COVID-19 pandemic has resulted in significant economic slowdown and equity markets to turn volatile. Though the Government has gradually started re-opening the economy, the economic outlook is uncertain since large parts of the country including the major economic...Read More

The Sensex has fallen nearly 26% in the last 1 month (3rd March 2020 to 3rd April 2020) and 33% on a year to date (Calendar Year 2020) basis (as on 3rd April 2020). The January to March quarter(of Calendar Year 2020) saw the worst performance by Sensex and Nifty in the last 28 years. The Coronavirus pandemic has shaken markets...Read More