Absolute & Annualised returns ?

 When it comes to investments, one should definitely understand the difference between these two.

 An absolute return measures an investment’s performance without accounting for the amount of time committed.

 On the other hand, annualised returns are annual gains that an investment earns over a specific time period.

For instance, when an investment of Rs 1,000 grows to Rs 1,300 over five years, then Rs 300 is an absolute gain with 30 per cent growth. This 30 per cent return is absolute return. But when annualised, the same gain is 5.38 per cent, which means each year, over a period of five years, Rs 1,000 incrementally grows by 5.38 per cent to become Rs 1,300.

Interpreting P/B & P/E ratio

The PE ratio of mutual fund is price by earnings ratio. It simply tells you how much you are paying to earn Rs 1. If the PE ratio is 25, you are paying Rs 25 to earn Rs 1, a 4% return. 

This is certainly making things too simplistic as the earnings will keep growing for the companies which are part of the mutual fund.

There is no hard and fast rule but a PE ratio of 20 and less is preferable. The other side is that a high PE atio indicates that people are ready to pay higher price for the fund because the market believes that the fund value can grow faster.

https://economictimes.indiatimes.com/wealth/invest/what-does-the-pe-ratio-tell-you-about-a-mutual-fund/articleshow/52161166.cms?from=mdr

While the P/E Ratio is based on the company’s earnings, the P/B ratio takes its book value instead.

Book Value of a company is the net value of all its assets after deducting all liabilities. In other words,

Book Value = Total Assets-Total Liabilities

It indicates the amount of money an investor has to invest for the net assets of the company. Since the market value of a share is usually higher than its book value, the P/B is typically greater than 1. 

A high P/B Ratio is an indicator that investors expect the management of the company to generate more value from the given assets

https://economictimes.indiatimes.com/interpreting-p/b-ratio/articleshow/813397.cms?from=mdr

Sticking to old ones could be disastrous

Rules of financial planning have changed: Sticking to old ones could be disastrous

Never take a loan to invest. Don’t borrow more than you can repay. Spend less than you earn. It is often said that if you stick to these simple rules, you won’t ever go wrong in money matters. In financial planning too, there are several thumb rules that serve as broad guidelines for formulating strategies.

Financial planners believe that significant changes in the past few years have rendered some time-tested tenets obsolete. While these canons of financial planning are still very use ..

1. Rule to junk: Save 10% of your salary for retirement

   Rule to follow: Increase the savings rate to 20%

2. Rule to junk: Equity exposure should follow the 100 minus age formula

   Rule to follow: Equity exposure should be 110-120 minus age

3. Rule to junk: The 50-20-30 budgeting rule for necessities, savings and wants  

   Rule to follow: Save at least 30% of your income every month

4. Rule to junk: Contingency fund should be equal to 3-6 months’ expenses 

   Rule to follow: Corpus should cover nine months’ expenses

5. Rule to junk: Life insurance cover should be 10 times your annual income

   Rule to follow: Hike cover to 15-20 times your annual income if you are under 40

6. Rule to junk: A health cover of Rs 3-5-lakh is adequate for metro dwellers 

   Rule to follow: Look at a total health cover of at least Rs 10 lakh

Read more at:

https://economictimes.indiatimes.com/wealth/plan/rules-of-financial-planning-have-changed-sticking-to-old-ones-could-be-disastrous/articleshow/68435833.cms

Safeguard against demat account fraud

It would appear that 'temporary' use of clients' holdings is quite common. Obviously, being able to use other people's money is a great temptation and quite hard to resist! Investors need to remain vigilant as unscrupulous brokers intent on cheating with the recent ones.

A lot of investors, like me, are just interested in buying stocks against full payment and holding them for months and years. I can't understand why such investors have to sign over power of attorney rights to their investments to brokers.


I could set up things in such a way that I might be able to trade in equities without giving the broker the power of attorney. What should be the default offered to new investors is actually secret knowledge that is carefully obscured and is only discoverable with some effort!


If you do not give PoA to anyone, you are the sole operator of your demat account.
This is the safest way i.e. by transferring the shares manually to the broker's personal demat account:

Buy this option  is not practical in online trading. If you sell the share today, you have to transfer the share to the broker's demat account by next working day so that he can deliver them to the buyer. If you fail to do that, it is broker's obligation to provide the shares to the buyer. If can the share doesn't reach to the broker in-time, he has to buy them from the market and settle the transaction. This may result in penalties to you. You also have to pay the difference in the prices.

With this crirsis hopeful SEBI will come up with polices that will help to overcome the above hurdle.

Don't Just Stand There

Got overweight during secondary section part of  school life.

Finally during college days ( 20 yr ) I went to fitness centre at hometown to move out of the sedentary lifestyle , after having high uric acid level and pain in knees 

Simple stretching and exercise on coming months with a healthy food choice I lost 13 kg ( from 66 - 53). For the next 2 year I kept balancing with the final year study and exercise. Even it gave me the confidence to compete for SSC exam . Lethargy is no excuse.

Years passed as I moved to city life for job , tried to be regular going to gym and got roommates who inspired not to give up of fitness. 

I registered for 10k run on Dec'2012 but did not turn up for the race.

Subsequntly again I registered for 10k runs on 2015 & 2016  but did not turn up.

Transformation isn't just about losing weight. Transformation can be about so much more. 

It took 30 years to complete my first 5k run cum walk. Sometimes it's the internal transformation that is its own best reward.

The desire to explore yourself is one of the most basic instincts of the human nature. It is therapeutic and the ultimate source to find your zen.

2017 onwards, gratitude for the small successes kept pushing me to particpate more 5k , 10k races.

The more you can focus on what you're doing right, the more confident and energised you'll be to keep on going.You can't beat yourself over the finish line folks. You've got to learn to truly love yourself unconditionally and keep on encouraging yourselves to grow in the right direction.

It works like an antithesis where you compete with yourself and success leaves you in want of more.

As we progress in life, creating milestones and achieving them, we should not forget our gratitude to everyone who has been instrumental in making our lives easier, even if in a small way.

My first fitness instructor Rishi Da will keep inspring me always. 

In this journey I keep meeting  and always keen on learning from the various trainers.

Fitness is the ability to keep going on when others have surrendered a long time back.

We also need to remember that our existence on this planet is finite.

Do whatever makes your body flexible and lighter .Be selfish and take out time every day for yourself.

Certainly this has been my long, slow journey.

Train, eat, recover and repeat! Do that repeatedly — day after day — and that's how you'll be able to imbibe real fitness in your life , Don't Just Stand There !!