We explain the difference between profit booking and rebalancing using mutual funds in simple language for newbies, Profit-booking is a colloquial trade name for selling stocks or mutual funds.  Let us understand profit booking with an example. Suppose you purchased 100 stocks for Rs. 10. The initial investment value is Rs. 1000. After many months,... The post Mutual Fund Profit Booking vs Rebalancing: What is the difference? appeared first on freefincal ..read more

Interactions with readers since Budget 2024 have made us realise that some investors are unaware of the difference between tax harvesting and portfolio rebalancing. One could also add “profit booking” into the mix. In this article, we explain the difference between these actions. Profit Booking: This is a fallacy. You cannot redeem only profits from... The post Tax Harvesting vs Portfolio Rebalancing: What is the difference? appeared first on freefincal ..read more

A says, “Instead of starting a mutual fund SIP, can I manually invest each month?” The answer might seem trivial to old investors, but it is worth clarifying for newbies. Ask any AMC person or mutual fund sales guy this question, and you will get an immediate no. Followed by something like, “An SIP is... The post Can I invest manually in MFs each month without setting up a SIP? appeared first on freefincal ..read more

A reader insisted that gold is a “safe ” instrument and should be considered part of a portfolio’s fixed income or debt. Nothing could be further than the truth: Gold is as risky as equity and not a debt instrument! Here is some supporting data. Let us start with the standard deviation of gold, equity*... The post Gold is as risky as equity and not a debt instrument! appeared first on freefincal ..read more

It is clear from how many readers, particularly young earners, respond to freefincal content these days that they are overconfident about their equity investments. Especially investments in small cap funds, mid cap funds, etc., that have soared in recent months. This could spell trouble for their goals and dreams. I hate to break it to... The post Do not be overconfident about equity! It could hurt your financial goals appeared first on freefincal ..read more

A reader says, “I am currently 37, married (no kids yet), based out of Bangalore and, as usual, a very late starter to equity investing. My debt portion (PPF, EPF, FDs) is much higher than equity, and all I am trying is to catch up and make debt to equity 50:50 and regularly rebalance once... The post Can I switch from Nifty, Nifty Next 50 to Nifty 100 low volatility 30 index fund? appeared first on freefincal ..read more

While recording an episode for the Let’s Get Rich With Pattu Podcast, a question that naturally emerged was, “Can I bet on the India growth story and invest in equity?” The question discussed in the podcast has been covered here: What is the probability the Indian equity market will perform well in the long term?... The post Can I bet on the India growth story and invest in equity? appeared first on freefincal ..read more

Equity savings funds are recommended as a tax-efficient alternative to debt mutual funds. This is more so with the debt fund units purchased on or after 1st April 2023 taxed as per slab regardless of the holding period. See, for example, the new debt fund tax rule: How do I change my investment strategy? What... The post What you need to know before investing in equity savings funds appeared first on freefincal ..read more

A listener to the Let’s Get Rich With Pattu podcast writes, ” What is the probability that a particular equity market (just the index) will perform well (beating inflation) in the long term? I can see all the examples taken comfortably from the US and India everywhere. But what about other equity markets? And what’s... The post What is the probability the Indian equity market will perform well in the long term? appeared first on freefincal ..read more

Should gold be part of your portfolio? We argue it need not be. But if you must invest, then we argue why a multi-asset fund is a better choice. The post Sovereign Gold Bonds or Multi-Asset Funds: Which should I use for gold diversification? appeared first on freefincal ..read more