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…
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…
A contingency fund prepares you to take more risks. Sounds strange? Read ahead.A friend of mine is an aggressive risk-taker in matters of investments. He was mentally prepared to invest more in equity when there would be a correction.Came COVID-19 and shutdowns, the stock market crashed and presented an opportunity to invest at lower prices. But my friend developed cold feet because he became highly uncertain about his income given there were not much savings.…
If you are concerned about how your investment will play out, you must watch out for events happening globally besides domestic developments.Many people hold the misconception that risks associated with their investments are mostly domestic. Therefore, they think and focus on possible risks like general elections, border skirmishes, low domestic GDP growth rates, etc. Whereas in reality, our investment returns are majorly affected by what happens globally.India is strongly intertwined with Global markets financially and economically. Thus what happens in the USA and other…
Social Proof plays a very dominant role in decision making by those people who are not confident & thorough enough about a particular subject. Historically, people have felt safe and confident in following the herd instinct. The more people that display a certain behavior, the more acceptable we think that behavior is. The more people follow a certain idea, the more correct we think that idea is. Usually, most of the people have expertise in…