Financial Planning in Slow Down/Recession

When rains forecast is bad, When economic growth forecast is for a lower number, thoughts about a slow down or recession lingers around.
Knowledge about Interinkages with IIP, Rain fall forecast, GDP forecast help us to plan ahead.
Here are some tips about how to tackle the fears.


Step 1. Separate your expenses as essential  and not so essential
Step 2. Look at expenses that can be avoided/postponed/reduced 
Step 3. Huge outlays could be checked for prudential pruning like House Construction or Buying a premium vehicle
Step 4. Keep an eye on health matters
Step 5. Consciously encourage harmonious relationship with family and business; family will save you costs attended to divorce and attended disruption in personal life; Business will improve your credit worthiness easing financial crunch- a delayed check payment may be overlooked or a prompt cash payment may attract discount in your favour-So manage your dealings with family, friends and business as well
Step 6. Plan your expenses by including allowance for increased inflation


In a nutshell Save Time, Money and Energy.

Happy Investing,

To Churn or Not To

When get stuck with a falling Portfolio Value, either in Mutual Fund or direct equity, one has a tendency to churn the portfolio. Sell off and start again.

How should one approach the portfolio in such cases?

Here I am giving Case A where Buy&Hold is followed; Then Case B where Churning is followed over the same period of 5 years with an annual 15% growth.

Obviously the churn has eaten up Rs 7846.29 in the process.

Now I relax my assumptions.

Market fluctuates and rates go further down. What will happen? every time the churn will certainly take 1% exit load irrespective of market conditions.

So churn is beneficial only when the market growth rate is more than 1% and adequate to cover the bank expenses and attendant disturbances.

Happy investing