7 sinister secrets Mutual Funds don’t share - MoneyControlIndians trust mutual funds, for the most part. We question our brokers, financial advisors and insurance agents, but mutual funds rank higher in the trust pecking order. Unfortunately, while mutual funds are called the “safest form of equity investment” and the “ideal choice for small and new investors”, their interests are not always your interests. Popular press has made basic realities – such as entry loads and commission structures – public knowledge, but AMCs have many more tricks up their sleeves, many of which are globally acknowledged, but unknown to Indian investors. Presenting seven rarely discussed money management problems and what we can do to alleviate them:
For complete article click: http://www.moneycontrol.com/news/mf-experts/7-sinister-secrets-mutual-funds-don’t-share-_430622.html
70% closed-end equity funds lag benchmarks - Financial Cronicle
Closed-end mutual funds (MFs), which have the inherent advantage of not having to spend money for creating and redeeming shares like open-end funds, tend to keep less cash in their portfolios than their open-ended cousins. Naturally, they need not worry about market fluctuations to maintain their performance record.
So if a stock drops irrationally, the closed-end fund may snap up a bargain, while open-end funds might sell too early. That said, an analysis by Financial Chronicle shows in the past 12 months, nearly 70 per cent of closed-end equity schemes have underperformed their benchmarks (or target indices).
For complete article click: http://www.mydigitalfc.com/print/52857
The weaker side of a mutual fund SIP that you may not know - Financial Cronicle
A couple of days ago, I received a question from an investor who was puzzled as to how the returns on an SIP over a period could be less than the non-SIP (lumpsum) returns. He went to an online investing website and saw that for a particular fund, the return on a non-SIP over the last one year was about a 100 per cent while the return on the SIP was much lower. The investors seemed to think that there was some sort of a problem in this.
Actually, the problem lies entirely in the public perception of how an SIP works and what exactly is its purpose.
For complete article click: http://www.mydigitalfc.com/print/52754
Is it worth switching to a teaser rate home loan? - DNA Money
Teaser rate home loans, which come with a fixed rate of interest for the first few years, have been the talk of the town lately. Unfortunately, banks and housing finance companies are offering these only to new customers and not existing ones. So, does it make sense for an individual to move from a normal floating rate home loan to a teaser home loan? DNA Money does the math.
For complete article click: http://epaper.dnaindia.com/newsview.aspx?eddate=12/15/2009&pageno=5&edition=3&prntid=106479&bxid=30690286&pgno=5
Lest you leave ’em with a loan to worry about - Economic Times
A home mortgage insurance is the next best gift that you can give to your dependents after you have bought them a home with a loan. Preeti Kulkarni tells you why
A MARKETING document of a mortgage cover plan sums up the importance of the cover — ‘ensure that your family inherits your home — not your home loan.’
Most home buyers, by the time they have received possession would have exhausted all their short-term savings and liquidity investments in interiors, brokerage payments, and down payments and other charges not covered in the home loan. While they do have a real estate asset, they also have a huge long-term liability. Few realise that in the event of their demise, their family will be faced with the tough choice of surrendering the house or discharging the liability.
For complete article click: http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=ETNEW&BaseHref=ETD/2009/12/15&PageLabel=10&EntityId=Ar01001&ViewMode=HTML&GZ=T
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