Prospect Theory
As much as investors like to consider themselves rational, the fact of the matter is that most are unable to maintain their rationality when times get tough. Prospect theory is one of the most famous behavioral finance theories that describe how investors behave in risky situations. It was developed by Amos Tversky and Daniel…
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Vivek Sharma
Tax Harvesting: How to Reduce Your Tax Burden?
FY 23-24 has been great for Gulaq. We were able to generate phenomenal returns for our investors, but with the financial year about to end, you’ll soon have to pay taxes on all those returns that you made. To help you alleviate some of that burden, in this blog, we are going to share some…
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Vivek Sharma
Don’t Miss the Forest for The Trees: Why Maxing Out the Rs. 1.5 Lakh Limit on Your PPF Before 5th of April Is Not Worth the Hype
As the financial year has ended, the buzz around investing the entire Rs. 1.5 lakh limit into your Public Provident Fund (PPF) account before April 5th intensifies. While on the surface, it seems like a prudent decision. If you ask me, it’s not worth the hype. Let me explain. The whole notion of investing the…
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Vivek Sharma
Halo Effect can be Dangerous to your Portfolio!
Charlie Munger once famously said, “It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent. Investors are human beings & thus are susceptible to making stupid decisions due to one or many psychological biases that affect our investment decisions.…
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Vivek Sharma
Anchoring Bias
I remember back in 2010 when Steve Jobs introduced the first iPad to the world. It was a truly revolutionary product worthy of residing in anyone’s memories, but one thing that stuck with me the most was how he chose to reveal the price of it. Jobs adopted a very unique way of announcing the…
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Vivek Sharma
My Prediction for 2024 (or 2044?)
A few years ago, a journalist reached out to me to get my views on the expected market returns for the next year. I wasn’t really sure what to say, so I gave him the most generic answer one could find – “I expect markets to give a 12-15% return next year.” Honestly, I had…
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Vivek Sharma
Goal Planning Done Right: The Appropriate Rate of Return to Plan the Future
Understanding Money and Goal Planning Money is an imaginary concept! In itself, it has no value. It’s just a piece of paper or a number on your computer screen. So why does everyone want it then? Well, you don’t want money just for the sake of having it. You want money because of what it…
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Vivek Sharma
5 Market Calls Made by Howard Marks
Introduction Howard Marks is a well-known name in the world of finance. He is the co-founder and chairman of Oaktree Capital Management and has made a fortune by investing in distressed companies. He has also authored the best-selling book, “Mastering the Market Cycle” and believes that superior investment result comes not from collecting more economic…
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Vivek Sharma
Herd Mentality Bias
Imagine you’re in a new city, hungry and trying to choose a place to eat. Two restaurants catch your eye—one bustling with a line of customers, and the other, nearly empty. Which one do you pick? Most people in this scenario would choose the busier restaurant. While some might be rationally concluding that more crowd…
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Vivek Sharma
How Long Does it Take to Double Your Money?
Building wealth through traditional means depends upon two factors – how much you save/ invest and the rate of return on investment. While the return on investment is something which is not always in our control, the savings rate is. And as we will show in this article, that the savings rate is a more…
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