Components of a Financial Plan
February 12, 2025
Formula Price to Book Value = Current Market Price / Total Assets – Intangible Assets The value of assets is taken from the most recently published balance sheet. Meaning The price to book value ratio looks at an immediate liquidation scenario. Investors therefore compare the price that they are paying for the company against what […]
Deposits can be divided into two types. The first type is time deposits in which an account holder gives the bank money for a fixed period of time and therefore does not have any right to ask for money before the maturity date has been reached. On the other hand, there are certain types of […]
The valuation of sports franchises is often quoted widely in the public domain. This is generally done based on the valuation provided by the sports franchise itself. The media just published the number that was quoted by the sports franchise. This is because the media is in no position to validate these numbers. Also, since […]
Now, since we are aware that there are actually multiple models that can be used to value any given company or asset, the next question that arises is which one should we use? How do we know whether a given valuation model is more appropriate for a given company than the others? The answer is […]
There is more than one entry route if one wants to gain an exposure in the commodities market. Positions can be built via many alternate routes. In this article we will look at some of these routes as well as their pros and cons. Physical Purchase Physically purchasing the commodities is the most direct and […]
In the previous article, we learned about what dollar-cost averaging is. We also learned about some of the benefits that this strategy has to offer. Many successful retail investors have hailed this strategy to be the most important factor that has contributed to their success. However, that does not mean that the dollar cost averaging is without its flaws. In this article, we will have a closer look at some of the criticisms that have been leveled against dollar-cost averaging in all these years.
The bottom line is that dollar-cost averaging can cause investment performance to be suboptimal in certain cases. However, suboptimal here means that the return on investment may be a few percentage points less. However, the chances of losing the principal due to wrongly timing the market are reduced significantly when the dollar-cost averaging method is used.
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