Skill vs. Luck – What Drives Investment Returns?
In stock market a good decision can lead to a bad outcome and a bad decision can lead to a good outcome. Luck plays a big role in investment outcomes but is often overlooked—sometimes intentionally. If you tell yourself, you just got unlucky, you are making excuses. If you tell yourself, you got lucky, you…
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Vivek Sharma
The Evolution of Factor-Based Investing
Imagine you’re a student preparing for an important exam. What are the factors you think will determine your score? You can be the smartest person in the whole world, but if you don’t handle the exam pressure well, your performance would suffer. Your score, as you might have correctly guessed, depends not just on your…
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Vivek Sharma
How Investors Lost Money in Peter Lynch’s Magellan Fund
The Magellan Fund, managed by Peter Lynch from 1977 to 1990, is legendary in the world of investing. Under Lynch’s rein, the fund delivered an average annual return of 29%, making it one of the most successful mutual funds of all time. But here’s the paradox – despite this stellar performance, most investors in the…
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Vivek Sharma
Time In The Market > Timing The Market
Imagine if taking a few days off your work cost you your entire salary. Sounds extreme, right? Who would want to work in a place like that? Yet, in the world of investing, where your money is working for you, this happens all the time – missing out on a few of the market’s best…
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Vivek Sharma
Identifying Overvalued Stocks: A Proof by Contradiction Approach
Proof by contradiction is a logical method used in mathematics to prove a statement by assuming the opposite of what you want to prove. If this assumption leads to a logical contradiction or an absurd conclusion, then the original statement must be true. In this blog, I will show how this method can be…
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Vivek Sharma
Debt Funds Deep Dive
Debt Funds are funds that invest primarily in fixed income securities of government and corporates. As of May 2024, it has over Rs. 15 lakh crore in assets under management (AUM) – about 26% of the total AUM in the industry. In this blog, we are going to take a deep dive into debt mutual…
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Vivek Sharma
Equity Mutual Fund Deep Dive
Equity Mutual Fund Deep Dive SEBI classifies mutual funds into five broad categories: Debt, Equity, Hybrid, Solution-oriented, and Others. In terms of Asset Under Management (AUM), Equity leads the pack by a mile as the most popular option among investors. As of May 2024, the total AUM of the Mutual Fund industry in India stands…
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Vivek Sharma
Why Investors Are Hard-Wired for Short-Term Thinking
Why Investors Are Hard-Wired for Short-Term Thinking An analysis done by Reuters revealed that an average investor holds shares for a mere 5.5 months before selling them for an uncountable number of reasons. The analysis also revealed that the average holding period has been trending shorter and shorter. In the 1950s for instance a typical…
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Vivek Sharma
Factor Investing Performance Analysis
Factor Investing Performance Analysis FY23-24 was a great year for equity markets. Nifty 500 itself delivered more than a 40% total return. In this blog, we are going to take a deep dive into how various factors indices performed during the last year’s bull run. But first, let’s get down to the basics. What is…
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Vivek Sharma
Financial Planning for People in 20s
Your 20s are the decade where you lay the foundation upon which you build your future life. If you wish to build a castle, you must start laying a solid foundation early on. But it’s easier said than done. Your 20s are the most exciting time in anyone’s life – new job, new city, new…
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