Aaditya Chhajed, CA, CFA

It's only when the tide goes out that you learn who's been swimming naked.  In an unprecedented move, due to dramatic illiquidity in certain segments of the corporate bonds, on 23rd April 2020, Franklin Templeton Mutual Fund announced winding up of six debt fund schemes as follows: Scheme Assets as on 31 Mar 2020 (in Crore) Franklin India Low Duration Fund 2,737 Franklin India Ultra Short Duration Fund 13,158 Franklin India Short Term Fund 7,093 Franklin India Credit Risk Fund 4,434 Franklin India Dynamic Accrual Fund 3,119 Franklin India Income Opportunities Fund 2,506 Total 33,048 Above debt mutual fund schemes are short and medium-term schemes. These schemes are a good substitute for funds lying idle in current and savings bank account of corporates and individuals.  Sub-categories of debt schemes:  Overnight Fund Liquid Fund Money Market Fund ...

Success exists in every field of investing. Right from real estate to equities. In India and across the globe. There are two categories of investors (both in equities and real estate): who have made a lot of money who are stuck with a lot of money One thing which is common in everyone who has made a lot of money is that they stick to their circle of competence (i.e. what you really know). Warren Buffet's take on the circle of competence: Every year Warren Buffet writes a letter to the shareholders of Berkshire Hathaway. In 1996, in his letter, he wrote: Intelligent investing is not complex, though that is far from saying that it is easy. What an investor need is the ability to correctly evaluate selected businesses. Note that word "selected": You don't have to be an expert on every company or even many. You only have to be able to evaluate companies within your circle of competence. The size of that circle is not very important; knowing its boundarie...

“If you’re not staying on top of your money, you are putting your financial well-being at risk.” – Suze Orman, American financial advisor, author and podcast host. Getting more education, pursuing a career, combining employment with family life – these are just some factors that have enabled women to enjoy greater financial independence, earn more, and save more as a result. In my list of family, friends, and clients, women investors comprise not more than ten percent. However, on average, due to some positive traits, the results of their investments beat that of men. Below mentioned are some of the traits. Let's reinforce them!  1. Stick to the comprehensive financial plan In my experience, once you set the right return expectations, educate women on risks involved, explicitly mention them in the investment policy statement, they stick to the same financial plan unless the goals change. Traditionally, women have cult towards physical gold and real estate as preferred ...

How many of you would have thought of the lockdown due to COVID 19? The importance of emergency funds has never been apparent. Recently I read,  65% of home buyers expected to default on their installments . Well, events like COVID 19 are extremely tail events.  Nassim Nicolas Taleb in his book "The Black Swan: The Impact of Highly Improbable" defines a Black Swan is a highly improbable event with three principal characteristics: It is unpredictable It carries a massive impact We explain it in such a way making it less random Why we do not acknowledge the phenomenon of black swans until they occur? By nature, humans are not hardwired to learn specifics when they should be focused on generalities.  We focus on things we already know and time and time again fail to take into account what we don't know.  Just imagine - what if lockdown is extended to a total period of three months? There arises the need for an emergency fund. In this blog - let's ...

With all the uncertainty around COVID 19 and fear, nobody really knows what next is going to happen. There is pessimism all across the board. However, we'll overcome the virus, through a combination of: Medicines Vaccines Social distancing Masks Testing Isolation Herd immunity, etc.   Patience is the hardest virtue to master. Given the virus being contained, businesses coming back to normalcy will not happen overnight. Do not buy currently if you do not have the patience to see this through. Maybe this is the time to relook at your financial plan and asset allocation. History teaches us many things.  The only consistency is just how inconsistent it is from one decade to the next. World economies have seen it all and come back from the brink every time.  Just for your  reference below are the Wikipedia links on the list of stock market crashes and bear markets: Global Stock Market Crash India Stock Market Crash    Amidst all these bu...

The below post is the last article on lessons from the book: The Most Important Thing by Howard Marks - Uncommon Sense for the Thoughtful Investor.  Reading time: 5 minutes You can read the previous posts here -  Part 1 ,  Part 2 ,  Part 3 . I hope all of you have enjoyed the timeless lessons as much as I have enjoyed. Here goes the final post: 1. Parameters to assess the market I have listed below market characteristics. Circle of the once which you think are most descriptive of today. If you find most of the circles on the left-hand side, be cautious. Economy: Vibrant Sluggish Outlook: Positive Negative Lenders:  Eager Reticent Capital markets: Loose Tight Capital: Plentiful Scarce Terms: Easy Restrictive Interest rates: Low High Spreads: Narrow Wide Investors: Optimistic Pessimistic Sanguine Distressed Eager ...