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Risk diversification in investment parlance is essentially an application of the age old idiom, “Do not put all your eggs in one basket”. Prices of different assets rise or fall depending upon market and economic conditions. If you spread your investment over different assets, your risk of making a loss reduces compared to investing in a single...

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...

The outbreak of COVID-19 pandemic has caused great turmoil in equity markets all over the world including India. The lockdown announced by the Government in late March and gradual reopening of the economy in the face of continuing rise in COVID infections is likely to have an adverse impact on economic growth and corporate earnings. As a...

Asset allocation is diversifying your investment into assets of different risk classes e.g. equity, debt, gold etc. Equity as an asset class can grow your wealth over a long investment horizon, whereas debt provides stability and generates income for you. Gold as an asset class is usually counter-cyclical to equity and a long term hedge against...

Principal Focused Multi-cap Fund is one of the best performing focused equity funds in the last 6 months to 1 year. The scheme was ranked 4^th among 22 focused equity schemes in terms of last 6 months performance and 4^th among 19 schemes in terms of last 1 year performance. The chart below shows the trailing returns of Principal...

Interest rates have been falling for the past couple of years. Since the beginning of the COVID-19 outbreak Reserve Bank of India has cut the repo rate by 115 bps, prompting banks to bring down fixed deposit interest rates even lower. General 2 to 5 year FD interest rates of major public and private sector banks are now in the range of...

SIP is a disciplined way of investing from your regular savings to accumulate corpuses for your long term goals. However, a severe market crash can erode considerable amount of wealth accumulated over several years through SIP. In this two part blog post, we are discussing how you can protect your wealth created by Mutual Fund SIPs...

Investors, who do not want to expose a portion of their wealth to vagaries of equity markets, invest in fixed income instruments like bank deposits and debt mutual funds. Debt mutual funds have become increasingly popular with retail investors and HNIs over the last 10 years. Potential of superior returns across different risk...

The equity market has suffered very badly since the outbreak of Coronavirus pandemic. The Sensex has already fallen 25% this year and more pain is expected in coming weeks and months. Almost all industry sectors are in the red with one exception, healthcare. The S&P BSE Healthcare TRI is already up 16% on a year to date...

Whatsapp is the most popular social media platform in India. India had 400 million Whatsapp users as on June 2019 (source: Niti Ayog). In contrast, Facebook users in India totalled at 241 million even though Facebook is an older app than Whatsapp. There are 450 million smartphone users in India. This means that Whatsapp is used...