MoneyVedam

What is Mutual Funds? Mutual funds are collective investment schemes that pools money from different investors to buy capital & money market instruments such as stocks, bonds, government securities etc. The money so collected under each scheme follows specific investment theme(s) so as to cater to the risk-return profile of the investors. A fund manager is typically entrusted to manage such pooled funds and is responsible for investing the money in the said securities. The Jargons.. NAV (Net Asset Value): Price of one unit of the fund, it is calculated at the end of each day by computing the total value of all securities held by the fund less expenses incurred and divided by the total units of the mutual fund Plan type - Grown, Dividend, Dividend re-investment: These are various options available to investors depending on their financial goals and needs. Those who save for long term needs go for growth option while those that need cash at regular intervals would go for div...

The setup of toxic product trap is more perverse now than ever. Take for example the US mortgage sub-prime crisis leading to the financial crisis in 2009 - greedy banks mis-sold poor quality mortgage loans packaged as MBS (mortgage backed securities) to investors all over the world right under the nose of the US banking & insurance regulators. It is the primary responsibility and function of banks to assess the risk profile of its borrowers and extend credit. If a bank issues sub-prime loans, it needs to suffer the consequence of not getting its loan paid back and no one else. This way only those banks that extended poor quality loans would have failed & busted. Instead, the banks decided to pass over their losses to a larger market by manipulating the product and  selling them under the disguise of AAA-ratings with rating agencies as their accomplice . By doing this, the banks have maliciously passed over the underlying (institutional) risk to retail investors - all und...