Remember: Never ask a barber if you need a hair cut. 3 views on Investment Advice View #1 – It’s worth nothing. I can invest my own time and effort to make my own investment choices. I understand what I am after. I have the plan in my mind. I have the discipline to follow it through. I might make a few mistakes now and then but better to fall and learn by oneself than burn fingers based on someone else’s advice. I don’t need investment advice. View #2 – It’s worth something. I believe an advisor by the virtue of his specialisation, possesses more understanding and know ..read more

The last year in general and the last few months, specifically, have been fantastic for the stock markets. Let the data do the talking. Below is the large cap – Bluechips – index represented by Nifty 50 and its growth over the last 1 year. It has delivered a 21.56% price return at the end of Jan 5, 2024. The broader market represented by Nifty 500 has a bigger run over the last year. Over the period, the Nifty 500 has delivered a price return of 28.28% return at the end of Jan 5, 2024. See image below. This indicates that the mid and small cap segments have gone up much more than the large c ..read more

The word ‘guaranteed’ has a strange aura to it and it can suspend all our logical senses to consider and buy whatever investment is on offer. Insurance companies have used this aspect to sell (missell) anything and everything to the unsuspecting investors.  It is not uncommon to see 10%, 12% guaranteed income numbers being thrown around. Pay premium of Rs. 1 lakh for 10 years and get Rs. 1 lakh in income per year from year 12 to year 20. Also, get the entire premium paid back at maturity. Hey, while we are at it, I will also throw a 5% maturity bonus. I mean, who wouldn’t start salivating ..read more

Real Estate just happens to be a purchase where you never, ever, stick to your budget. I have heard countless stories where people went to buy a 1 bhk but ended up booking a 3 bhk. A 1000 sq.ft. carpet soon became a 1600 sq.ft. carpet. And then you go about running calculations with your excel sheet, banker and family. Can we afford this? Do we have enough downpayment? HOw much loan will we get? Can we service the EMI? and many more. If you are out in the market for buying your first house, there will be several questions crossing your mind. I have lived this experience myself as well as with ..read more

Nifty 50, the stock market index from NSE, has crossed 20,000, the first time ever. And yet, it doesn’t inspire confidence. As if, something is about to go wrong. I speak to Amey Kulkarni, one of the finest investors and thinkers, on how he sees the current market and what approach is good for investors at this stage. VK: Amey, let me take the bull by the horns. What is your take on the market? Should I withdraw money or invest more? AK: Let me tell you a story from 2016. Donald Trump won the US elections and it was widely opined that this is not good for the stock markets. This was also the t ..read more

Are you someone who feels anxious about your financial future, if you will have enough for your financial milestones, to fund children’s education and build assets for the family inheritance. Or, maybe, after years of slogging at work, you now feel that life needs to take a different direction. You need to know if you are at a stage where you can make work optional. Well, the good news is that we can figure it out. We can play with FIRE Don’t get alarmed. FIRE here stands for Financial Independence and Retire Early. What if you can get good estimates on: When can I be financially free? W ..read more

Real world is so complex that we constantly try to create, find and use tools along with guiding rules to make sense of it and push our way forward. Finance is no different. To make better decisions, to get high risk adjusted returns, investors, too, look for sophisticated tools as well as thumb rules. But do they really work? That’s what I ask too. Is volatility good or bad? How much of it is good or bad? Do I reject or accept something because of it? Or, should I be more concerned about my “margin of safety” and “a permanent loss of capital”. We delve a bit in the latest Lighthouse August 20 ..read more

Yes, that’s the talk of the town. Stock markets and the individual stocks which constitute the markets are all hitting the highest highs. The popular view is that Nifty is going to hit 20,000 mark soon. Given the scenario, some investors are deeply worried (the bears), some are cautious (the investors) and the rest feel that the biggest bull market of all time has just started (who else but the bulls). Are the markets running up too fast? Are they overheated already? Difficult to comment. A simple heuristic that can be used if markets are overheated is  – when&nb ..read more

I know a large number of people sitting on the sidelines waiting for a correction to invest. They even pulled out the portfolio because they knew that the crash is coming. But the market doesn’t care what someone thinks. It goes the other way and delivers all time highs. Nifty 50 index has crossed 19400 as of July 5, 2023 and Sensex is above 65000 levels. If the previous time was not good for those people, this is a worse time to invest now. Except that, it may be not. Let’s find out more. We cover the following in the Lighthouse July 2023 edition: The ATH syndrome – lying and Investing ..read more

“Don’t put all your eggs in one basket” is one of the simplest ways to explain the concept of diversification. While the above statement puts across the point very beautifully, in 1950s a person by the name of Harry Markowitz went on to build a mathematical model. He even submitted a paper on his research to the Journal of Finance. Finally, he went on to share the Nobel Prize in Economics in 1990. As a result of his effort emerged the Mean-Variance Analysis, which became the bedrock of the Modern Portfolio Theory. Over the years, the majority of the investment management chaps u ..read more