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Showing posts from January, 2015

Equity(Stock) versus Equity(Mutual) Funds

It takes less effort, less time, less experience and less specialized knowledge to get good returns from equity mutual funds than it does from directly trading in equities. There are several benefits of investing through mutual funds instead of directly investing in stocks. Mutual funds combine the savings of a large number of investors and manage it as a single pool of money . So, instead of investors worrying about which stock or bond to invest in, professional fund managers do the job. Equities are complex and stocks you can buy come in a bewildering array of sectors, industries, size, financial structure, promoter track record, competitive scenarios and a lot more. When you invest in a fund from a good fund house, there is a full-fledged research department to keep tabs on all this; and there's an experienced full-time fund manager who has years --often decades -- of track record of making equity investments . Moreover, his track record is publicly known and thoroughly ana

How to handle a Windfall/Bonus Money

It may seem like a problem you'd love to have: Getting a huge windfall and not knowing what to do with it. Frankly, it could be anything – a Diwali bonus, an inheritance, an insurance settlement, the sale of a home or business, or even winning a lottery. What you should not do is squander it all on a reckless spending spree. Here are a few ways you can handle that bonus wisely.  1) Start an emergency fund Use this money to start, or supplement, an emergency fund. In life, you should expect the unexpected – job loss, sudden medical expenses, unforeseen emergencies. Having a reserve for a rainy day is a very good idea. Without an emergency fund, you are more vulnerable to sudden life changes.  Most financial planners recommend setting aside 4 - 6 months' worth of living expenses in an emergency fund . If you take the liberal view of living expenses when deciding how much to stash away, your emergency kitty likely will last a little longer. 2) Clear expensive debt