INTELLECTUAL TRADING

With the recent underperformance of most active mutual funds in 2018, there has been an increasing focus on passive investing & especially indexing. Exchange Traded Funds (ETFs) have suddenly become very popular, receiving a lot of media attention and interest from investors – yet most of us don’t really know what exactly are ETFs & how they function. As a result, many facts have mingled with rumours (e.g. ETFs aren’t liquid), making it challenging for even informed investors to really understand & invest in them. But while ETFs are a new concept in Indian markets,  they’ve actually been around for a long time  (since 1990s) and have even become the preferred investment choice of most retail investors across the world. A Brief History of  Exchange Traded Funds The modern day open-ended mutual fund structure is a financial innovation from the early 1920s – rather than buying single stocks, investors now had the option to invest in a diversified portfolio managed by

The basics of Inflation Inflation is the rate of increase or decrease in prices over a specific period of time. It indicates how much more expensive or cheaper a particular set of goods and services has become over a certain period, like a quarter or a year. In India, inflation is calculated on wholesale goods as well as the consumer basket of goods. Inflation is calculated on the former by tracking changes in the Wholesale Price Index (WPI). This index measures the change in price of goods that are traded in bulk, usually between businesses. For example, change in price of coal, electricity, manufacturing of textiles, motor vehicles etc are all considered while calculating the  WPI . Consumer Price Inflation For the common man, it is the  Consumer Price Index (CPI)  which is the more relevant tracker of inflation. The  CPI  measures the  change in price of goods and services that is commonly consumed by households . The CPI basket of goods and services as well as their co