Vipin Khandelwal

Do you have a written investment strategy?

January 26, 2016 by Vipin Khandelwal

It is not news that most ‘investors’ do not have a thought through investment strategy. Asking for a written one is a far cry.

In good time, you would agree that your investments continue to be random acts driven by popularity, hearsay and need to just get the best returns.

The same randomness is equally visible in the not so good times. Stop systematic investments, sell current investment due to panic or take a vow to altogether avoid any market linked investments are some examples of these random acts.

If you were to ask me the difference between having a strategy and not having one, it would be that an investment strategy helps you stay the course. You know why you are doing what you are doing.

An investment strategy holds your investments together and hopefully, you too. It keeps you sane. It is difficult to waver a mind that understands the ‘purpose’.

Call it a set of road rules in your journey of financial independence.

What is an investment strategy like?

The investment strategy is a set of guidelines that direct your savings towards investments in a way that help you meet your financial goals.

I am sharing with you the investment strategy for one of my client’s – let’s call him Bruce Lee.

Understanding Risk and Volatility – a primer

January 20, 2016 by Vipin Khandelwal

“The markets are so volatile. Isn’t it risky to invest now?”

If you are an investor in stocks or mutual funds, this is a likely thought that must have crossed your mind recently.

Let me ask you, “What’s actually worrying you – the volatility or the risk?”

If this has got you to wonder as to which of the two, risk and volatility, is your real concern, then this post is for you. Let’s understand them better.

Reintroducing Risk and Volatility

With respect to investments, risk is the chance that you may lose some or all of your investment amount permanently.

Small Savings Schemes – Rates get further smaller

January 15, 2016 by Vipin Khandelwal

Why does bad news get more attention than good news? Not just that, it also triggers us into action.

I realised it yet again when my friend Vijay told me anxiously about a news he just heard.

“Did you read that the government is planning to reduce interest rates on small saving schemes?”

Small savings schemes include National Savings Certificates, Senior Citizen Savings Scheme, Post Office Monthly Income Scheme, PPF, etc.

“Yes, I heard that. But why are you bothered?” I said with my tongue-in-cheek.

“You know everything, yet you ask me that. Almost all my money is in these schemes, in fact most of it in Bank Fixed Deposits. Aren’t my returns going to suffer because of the reduction in interest rates?”

Investment decisions – How to get them right?

January 8, 2016 by Vipin Khandelwal

Investment Decisions Case 1 – Insurance Premium

A few weeks ago Rahul, a friend of mine, called up an insurance company to buy a term plan. He wanted a cover of Rs. 3 crores for 40 years.

The agent heard him and said that for a cover of this amount Rahul would have to pay Rs. 36,068 every year as premium.

The agent then told him that he wanted to make another suggestion.

“Yes, tell me.” Rahul was keen to know.

“Sir, I will give you an option where you pay premium for only 10 years but you will get a cover for full 40 years.”

Rahul was excited. This seemed like a bargain.

Life Insurance Term Plan: 5 practical buying tips

January 4, 2016 by Vipin Khandelwal

Over the last couple of weeks, I have had several queries on life insurance. Thankfully, the readers were aware that term plan is the right insurance product to buy.

Yet, when it comes to actually buying the term plan product and decide which policy to go for, some questions do remain. This post is going to deal with those questions and attempt to give perspectives, which you can use to find your own answers.

The questions around buying life insurance term plan

The most common questions are

Should one buy term plan online or offline?
Should one buy it from the insurer with the best claim settlement ratio?
Should one break the required insurance cover into multiple policies or buy just one policy?
Should one select regular premium or lower premium payment period option?
Should one buy it from LIC or a private insurer?

I will try and use the learnings from the interactions with my clients, readers as well as my own experience, to offer various perspectives. I would be happy to read your thoughts and feedback in the comments too.

Let’s go.

What is the Common Account Number of Mutual Funds?

March 14, 2016December 31, 2015 by Vipin Khandelwal

[This post originally appeared on the Unovest Blog. Click here to read it there.]

Life without a Common Account Number (CAN)

Rohit wrote to me recently asking for advice on his mutual fund portfolio. He shared with me an excel sheet that he used to track his investments. It had the names of the funds, the folio numbers, in whose name the holding was, the broker who had facilitated the transaction, amount invested and units.

I suggested to Rohit that we verify all the investment holdings from the AMC or Registrar statements. I shared with him the link to download a consolidated statement across all mutual funds.

However, the pre-condition for this to work is that you have a common email id registered for all your investments. The consolidated statement will reflect only those investment of yours which have the same email id.

If you have multiple email ids then you have to generate multiple statements using one email id at a time.

Rohit did some work only to realise that he was NOT able to get statements of all his holdings. First he realised that he had used 2 email ids. So he generated two statements. But that still didn’t sum up for all his investments.

He then realised that probably some of his investments don’t even have a email id registered.