Open-ended funds mean that the AMC accepts fresh inflow of money even after the launch date. Closed-ended funds on the other hand do not allow fresh investments. Close-ended funds have a predefined target, a clear maturity date, and an exit plan. Whereas open-ended funds are perpetual and the AUM keeps growing if the scheme is…
Every asset has a value. The value depends on not the seller, but the buyer. If you wish to sell your house for 1 Crore, but the highest a buyer is willing to give you is 0.75 Crore — then the value of the house is 0.75 Crore. When everything is going well, the same house may…
There are more than 40 Asset Management Companies (AMCs) in India. Collectively they manage more than 54.54 lakh crores as of Feb 2024 (source). The total number of folios by retail investors is a whopping 13.95 crores. There are more than 2500+ Mutual Fund schemes available, which one will you choose? The answer is “Investment…
Mutual Funds were there from the start, but they became famous only after the Vanguard Group launched their passive schemes. The main reason their offerings became popular was due to lower fees & transaction costs. Earlier on people preferred to invest directly by buying stocks a.k.a. Equity. The advantage of Equity is that there are…
In the last chapter, we learned about the Assets that are available for Investment. In the current chapter, we will learn the precedence of which Asset Class to choose. You can think of this chapter as the practical class for the theory learned earlier. “Everybody has some information. The function of the markets is to…
In the last chapter, we learned about a few asset classes the Rich used to invest. As Mutual Funds became famous ordinary people like you and me were able to allocate money to these asset classes. In this chapter, we will learn about each of these asset classes in detail, few of them are:- Real…
Savings and Investments meant two separate things before Mutual Funds became famous. The main difference between them was Liquidity. Savings came with a higher liquidity and lower yield whereas Investments came with a lower liquidity and higher yield. Liquidity means how soon you can withdraw the money and use it for a financial emergency. Yield…
The equity markets are booming everywhere. Surprisingly, India is outperforming developed markets in ways never seen before. One of the reasons for this outlier event is the huge influx of retail investors post-Covid lockdown. There are 2 ways to look at an event The optimistic way The pessimistic way The optimist would say “New entrants…
Yesterday we discussed how to use SLBM to go bearish on a stock. Due to its complexity, most traders refrain from using that method. A simpler approach would be to use the option strategy called Bear Put Spread. Let us take the example of ICICI Bank again. The current price is Rs1077. We BUY a…
Bearish means we expect the prices to go down. Ideally, we should be able to sell the shares first and then buy them back at a lower price to make money. This concept is called short selling. However, it is not practical to sell something that you do not have, hence a concept of SLBM…
