INR has depreciated by 7.3% against the USD over the last year. Domestic currency depreciation is never good news for countries with trade deficits. A trade deficit indicates that a country is importing more than it is exporting.India’s merchandise exports in June 2022 jumped 23.52% YoY to $40.13 billion, while imports increased 57.55% YoY to $66.31 billion. Thus, the country’s trade deficit ballooned to a record of $26.18 billion resulting in higher demand for the USD. Since…
It seems very exciting to get some investment advice for free that can help one make quick bucks. But do you know, what one perceives as free advice could be very expensive? The case in point is the so-called “free” advice on crypto investments from financial influencers. A few key problems with “free” advice are: – Not customized to you: People who advise for “free” are either giving a generic gyaan, pushing some products or…
Elon Musk is a brilliant engineer and a businessman but his followers also take his advice on cryptos. Sports and film celebrities who are masters of their respective skills endorse insurance, investment products, and yes cryptocurrencies as well to their followers who lap them up. Many financial influencers who may have done well in their earlier stints as entrepreneurs or business consultants are encouraging their followers to invest in different products. If you notice in all these…
One of the major causes of financial troubles is not being able to prioritize goals. We all have some financial goals. Common critical goals which are unavoidable – are retirement corpus, children’s education, and housing; and non-critical goals – world tour, luxury car, house in the mountains, etc. Many families focus on funding goals that are sooner in time without realizing the impact on their ability to meet critical goals that are many years away. In…
What returns should you expect from your investments? Historically, equity returns have been in the range of 15-20% annualized over the last 20 years. Many people think it is their right to get 15-20% returns on equity investments in the future as well. This may be the wrong way to set your returns expectation.Returns on investments (equity/debt/gold) are influenced by various factors – economic growth, inflation, interest rates, and prices at which you invest. These…
Hybrid mutual funds have industry-wide assets under management (AUM) of INR 4.70 Lakh Crore. Hybrid funds (HF) invest in a mix of equity & debt (& gold in a few funds). In conservative HF, equity allocation is between 20-40% whereas, in an aggressive HF, equity allocation is between 65-85% and the rest is in debt. Many consider HF a safer way of investing in mutual funds, especially when equity markets are quite expensive. Despite its popularity, we think…
After many years of lying low, inflation has raised its ugly head to the utter dismay of policymakers around the world. The average Global inflation is multi-decades high. The commodity index is up by 60% over the year.Many investors of today do not have much idea about how persistently high inflation can be ruinous to the economic health and their own wealth. The big question is how to position yourself for the onslaught of high…
One of the biggest enemies of success in life and investing is short-termism. Short-termism or myopic thinking refers to making decisions based on what is happening at present instead of taking a longer-term view of future prospects.It’s a highly common phenomenon and that is why there are more failures than successes. A person who makes decisions looking at the long term would always have an advantage over those with short-term thinking. Some of the most common examples of financial…