Once upon a time in a village, a man appeared and announced to the
villagers that he would buy monkeys for Rs10. The villagers seeing that
there were many monkeys around, went out to the forest and started catching
them. The man bought thousands at Rs10 and as supply started to diminish,
the villagers stopped their effort. He further announced that he would now
buy at Rs20. This renewed the efforts of the villagers and they started
catching monkeys again. Soon the supply diminished even further and people
started going back to their farms. The offer rate increased to Rs25 and the
supply of monkeys became so little that it was an effort to even see a
monkey let alone catch it.
The man now announced that he would buy monkeys at Rs50! However, since he
had to go to the city on some business, his assistant would now buy on
behalf of him. In the absence of the man, the assistant told the villagers.
Look at all these monkeys in the big cage that the man has collected. I
will sell them to you at Rs35 and when the man returns from the city, you
can sell it to him for Rs50." The villagers squeezed up with all their
savings to buy the monkeys. Then they never saw the man nor his assistant,
only monkeys everywhere!! !! ONLY MONKEYS !!!!!
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Wednesday, September 22, 2010
Friday, September 3, 2010
5 Simple and Easy steps in selecting a good Mutual Fund Scheme
Hi,
We all spend lot of time figuring out to find good Mutual Funds which can give us good profits . In market we have Thousands of schemes floating and every Mutual Fund company says their scheme is best. How do you decide which one is Good. Read on.......
To make it simple , I will not explain the concepts used below :
1) Sharpe Ratio - Should be as higher as possible. Higher the better.Generally expressed in numbers like 1, 1.3 etc . Should be more than one .
2) Standard Deviation - Medium to low is better. Generally expressed in percentage.
3) R -Squared - Should be more than 0.75 . Generally expressed as a range from 0 to 1
4) Beta : Depends on what kind of investor you are: It is expressed in numbers like 1, 1.5 , 2 etc
a) High risk taking investor : High beta may suit you
b) Low risk taker : Low beta may suit you.
5) Alpha : Higher is better. Should be more than Beta. Expressed in numbers.
With the above data, also check how the scheme has performed in terms of returns in the past.
Data relating to above concepts is available readily for all the schemes on various websites like valueresearchonline.com , mutualfundsindia.com etc etc
Before investing just check if the scheme which you wanted to invest matches the above parameters.
Thank you
We all spend lot of time figuring out to find good Mutual Funds which can give us good profits . In market we have Thousands of schemes floating and every Mutual Fund company says their scheme is best. How do you decide which one is Good. Read on.......
To make it simple , I will not explain the concepts used below :
1) Sharpe Ratio - Should be as higher as possible. Higher the better.Generally expressed in numbers like 1, 1.3 etc . Should be more than one .
2) Standard Deviation - Medium to low is better. Generally expressed in percentage.
3) R -Squared - Should be more than 0.75 . Generally expressed as a range from 0 to 1
4) Beta : Depends on what kind of investor you are: It is expressed in numbers like 1, 1.5 , 2 etc
a) High risk taking investor : High beta may suit you
b) Low risk taker : Low beta may suit you.
5) Alpha : Higher is better. Should be more than Beta. Expressed in numbers.
With the above data, also check how the scheme has performed in terms of returns in the past.
Data relating to above concepts is available readily for all the schemes on various websites like valueresearchonline.com , mutualfundsindia.com etc etc
Before investing just check if the scheme which you wanted to invest matches the above parameters.
Thank you
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