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Niranjan Avasthi Profile picture
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28 Feb, 10 tweets, 2 min read
Compiling all my threads and articles here.

Do read and share if you fing them useful.
On SIPs
80:20 Investing approach

10 golden rules of Investing

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More from @avasthiniranjan

Niranjan Avasthi Profile picture
28 Feb
A thread on Debt mutual fund basics

Let's understand why and how debt mutual fund NAV react to changes in interest rates and how to select a right debt fund and manage interest rate risk.

Share widely if you find this useful.

1/n
Relation between bond price and interest rates.

Bond price fall when interest rates rise and vice-versa.

But why? Let's understand.

Say you invest Rs. 100 in a bond of 2 years which pays an interest of 10% per annum.

2/n
After 1 year, interest rates in the economy rise to 11% since RBI increased interest rates.

Now the bond which you hold has 1 year remaining to mature and pays 10% interest. But a new bond in the market with 1 year maturity now pays 11% interest as rates have risen.

3/n
Read 25 tweets
Niranjan Avasthi Profile picture
14 Feb
A simple thread to understand the meaning of investment cycle (Gross Fixed Capital Formation) in the economy and why it is important?
Which sectors can benefit in such cycle and why?

Do share if you find it useful.

1/n
What is Gross Fixed Capital Formation?

There are essentially 2 methods to calculate GDP of a country. Both methods ultimately tries to measure the total value of goods and services produced in the country during a particular period.

2/n
1. Income Method of GDP calculation adds up INCOME EARNED from all goods and services produced in the country.

2. Expenditure method of GDP calculation takes into account all purchases of goods and services in the country.

3/n
Read 22 tweets
Niranjan Avasthi Profile picture
2 Feb
Union budget proposed big rise in Capital Expenditure. What does does it mean?

A simple thread to understand Capital Expenditure vs Revenue Expenditure and its potential impact on the economy.

And why this may lead to rotation in sectoral winners.

1/n
The expenditure presented by the government is mainly defined in 2 ways

1. Expenditure which results in creation or acquisition of assets.
2. Expenditure on operational expenses that don't create any assets, but are routine spends.

2/n
The 1st is called capital expenditure, and the 2nd one is revenue expenditure.

3/n
Read 16 tweets
Niranjan Avasthi Profile picture
26 Jan
A simple thread to understand relationship between US Dollar and Emerging Markets.

The relationship between the performance of Emerging Market stocks and the US Dollar is one of the tightest macro relationships that exists in investing.

1/15
The weekly return correlation between US Dollar and MSCI Emerging Market Index is -0.70 over last 10 years. Which means when US Dollar weakens, Emerging Market stocks rally and vice versa.

2/15
As seen in this chart, the MSCI EM Index and the MSCI World Index ratio and the US Dollar Index are negatively-correlated.

When US Dollar weakens, EM index outperform World Index and when US Dollar strengthens EM index underperform World index.

3/15
Read 16 tweets
Niranjan Avasthi Profile picture
6 Dec 20
A thread demystifying Balanced Advantage Funds.

Facts behind their performance and different investment strategies they follow. Might help you look beyond just performance nos and deep dive into reasons behind it.

P.S. Long thread

1/n
So let's start with basics..

What are Balanced Advantage Funds?

They are funds that shift their portfolio investmets between equity and debt, depending on market conditions and aim to provide equity like returns, but with lower volatility.

1/n
How do they help you?

-Take away the need to time the markets

-Protect investments when markets are down

-Help overcome emotional bias while dealing with equity markets and their uncertainty

1/n
Read 22 tweets
Niranjan Avasthi Profile picture
22 Nov 20
A thread - Does timing your SIPs work?

They work best when you don't try to time and fiddle with them.

Example 1: Stoping SIP and restarting when markets stabilise

Stopped SIP in March
Did this work?
No: 2.93 lk vs 1.93 lk
Missed opportunity - 1 lk (Savings + Returns)
1/6
Example 2: Starting new SIP only after markets stabilise

Postponed SIP investments after March fall.
Did this work?
No: 90 k invested is worth 1.03 lk
Missed opportunity - 1.03 lk (Savings + Returns)

2/6
One would say these examples look good since markets have bounced back sharply.

Correct, in hindsight this looks good. But, if we go back in history, equity markets have always come out of crisis sharply. And SIPs continued during crisis have recovered even faster.

3/6
Read 6 tweets

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