The Jamā Blog


DHFL Default – Are Your Debt Fund Investments Impacted?

One of the Non-Banking Finance Companies, Dewan Housing Finance Limited (DHFL) recently defaulted on its interest payments. This has caused an uproar because many Mutual Fund houses have invested in DHFL's bonds. Naturally many MF investors are worried about what happens to their investments. I am enclosing three information items that might help you navigate this. 1. Fund houses that ...
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What Should Investors Expect with Modi 2.0

We now have a stable government in place at the Center after a gruelling two month long election schedule. The NDA 2.0 or Modi Sarkar 2 as some put it, is in place now. This is something we had anticipated and wrote a couple of months ago in our email newsletter. What does this portend? India will experience a period ...
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Best Mutual Funds to Buy in 2019 Based Your Investment Goals

Best Mutual Funds 2019 Best Mutual Funds 2019- With the incumbent government retaining power at the center, India is poised to see strong developmental and economic reforms which will guide India on a higher growth path. Now that the election results are declared, it’s time for us to think about where to invest that capital parked. But the choice of ...
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6 Investment Advice Tips for a Doctor

Doctors being high-income earners are the target of the financial service industry. They are sold ‘investment products’ with huge hidden costs. What is worse is that because of the commissions, bad products are pushed. Doctors can significantly increase their wealth by investing in zero commission (ie indirect fees) investments and go for a performance fee model. Investment Planning For Doctors ...
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Are Free Direct Mutual Fund Platforms For Real?

If you are in the know of things, you might have switched your mutual fund portfolios from regular plans to direct plans by now. If not, you must do an internet search or check this article “direct plans vs regular Plans” to understand how you have been a victim of so-called “Free” platforms providing regular plans. As the Indian consumer ...
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What Must The India Investor Do, As Of February 2019

The Indian political economy is undergoing turbulent times. Two major events in the last month are significant. How does an India investor measure the impact of recent events (budget, Kashmir) on one’s investment strategy? Is it a good time to wait out and see how the developments evolve, or should one invest aggressively? Budget 2019 The first major event is the annual ...
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5 Reasons Why A Good Financial Advisor Is A Great Investment

Conventional thinking is that only the rich can afford a financial advisor. After all, a financial advisor helps accelerate wealth creation and protect the wealth that has been created.  However, every person in every wealth category will benefit from a financial advisor. After all, what is the objective of wealth? Isn’t it to fund your life goals and make you contented? Who ...
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12 Point Checklist To Change or Appoint An Investment Advisor

Choosing a right investment advisor could get stressful, more so if you already have an 'advisor' and you need to change for any reason. This applies to most people and hence they prefer to be in the 'default' mode. Beginners, are somewhat lost on whom to approach for advice. So naturally, whoever has access to the person, which happens to be ...
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Direct Plan Mutual Funds For Just Rs 100 per month

Here is a handy list of funds that are available for an SIP of just Rs 100. Fund Class 3 Yrs 5 Yrs 10 Yrs Returns Since Launch Link Reliance Hybrid Bond Fund - Direct Plan Growth Plan - Growth Option Hybrid-Conservative 7.8 11.0 11.0 9.8 http://jama.co.in/app/push/85/payment Reliance Equity Hybrid Fund - Direct Plan Growth Plan Hybrid-Aggressive 10.5 17.2 14.2 ...
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What To Do When Markets Fall and Mutual Fund NAVs are Down

We are living in interesting times. I wrote last week about the recent mutual fund market correction. Turns out that more action happened last week. Some of the readers wanted more specific action as the observations may have appeared vague. Hence I am penning down some crisp thoughts, which would take you a minute to read and think through this ...
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September 2018 Correction in Equity Mutual Funds & Markets

This being an eventful week of an eventful month, I would like to share some more thoughts. The equity markets have corrected this week, Sensex by 5% and Nifty by 3%. Over the month both have corrected by about 7%. There is turbulence and some people are worried. What do we do now? I will not preach about staying invested, ...
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Two Important Takeaways for Liquid Funds

We had quite a few happenings in September with respect to reputed firms running up defaults on their bonds. Some banks also ran deep into a similar mess, so much so that the RBI refused to allow extensions to their CEOs. It is a good time to reflect on the takeaways. Liquid Funds Are Meant to be Liquid We all use ...
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When “FREE” Backfires! Busting TWO Common Myths on Mutual Fund Platforms

Let me come straight to the point. Investors of Mutual Fund are being increasingly misled on FREE offerings that leads to a massive rip off on their wealth. In Hindi they say "Lene ke Dene" (ie instead of taking, you end up giving away much more!). Here are two myths about FREE that we need to bust right away! Myth1: ...
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The Complete Guide to Expense Ratios in Mutual Funds

Mutual Funds in India have grown by leaps and bounds over the past few years. Investors have enjoyed good returns in what is one of the longer bull runs in the market since the 2008 crash. Most Mutual Fund houses have made record profits and the big ones have grown bigger. Some have even gone IPO, and listed in the ...
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7 Reasons Why Annuities Are Not Your Best Friend

It is often presented that for creating an income stream, annuities are a great option. They are supposed to work well especially during the retirement years when 'active' income dries up. We find out if this is indeed the case, or if there are more efficient ways to get things done. We also compare annuity vs mutual funds to conclude ...
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Stock Market vs Mutual funds : Returns And Risk Of Equity Investment

Many investors shun equity completely to avoid risk. All who do so run the risk of having their returns eaten up almost entirely by inflation. Equity investment does come with risk, with high short-term volatility, but no one should invest in the stock market for the short-term and no one have good knowledge on stock market risk & returns ...
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3 Reasons Why Investing In Direct Mutual Funds Is Smarter than ULIPs

I am often asked this question, isn't investing in ULIPs smarter there are lower taxes and there is also life insurance cover? The short answer is that a Unit Linked Insurance Plan is not a great option when it comes to building wealth. Here are 3 Reasons, read on for more to see the "proof":
  1. Commissions that are deducted upfront are ...
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Evaluating NPS as an Investment option

In this post, we will evaluate whether the National Pension Scheme (NPS) is a good investment option and if it can help us meet our various investment goals. What is the National Pension Scheme (NPS)? NPS stands for National Pension Scheme. Thus, at the core, it is a pension scheme. In other words, it attempts to provide the investor with ...
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14 Ways To Make Money Even In Retirement Without A Job

Most people think that retirement is the end of the income stream. You hang your boots and count your days. While that may largely be true, the flow of money need not stop. Here are fourteen ways to make money after retirement and to keep the bank account buzzing with inflows even while you take time to enjoy the finer ...
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6 Tips For a Free Lunch In Investing – Asset Allocation

We often hear experts talk about Asset allocation and Rebalancing of Portfolio. We will now find out why this is almost like a free lunch in investing! And it is time to do so as we are beginning a new financial year and the markets are taking a sharp turn. If you are switching from regular or indirect mutual funds ...
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3 Tips For Investing In ELSS Mutual Funds

The month of March is the month of tax saving! Come March, and then we see a scramble to save tax with ELSS ( Equity Linked Savings Scheme ). Almost every other person who has just completed an investment becomes a tax expert and starts advising others on how to save tax. Brokers, particularly agents selling Insurance policies, go all ...
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3 Things Common To Roller Coasters & Equity Funds

We do not have many theme parks in India. Thus, many of us have not really experienced a “roller coaster ride”. Well, the stock market more than compensates for it! As the indices have grown, the psychological impact of the dips and highs has become larger. Today, a fall of 230 points in the BSE Sensex does not make so ...
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3 Implications Of The Correction – But Are You Ready To Take Advantage?

Today the equity markets are in apparent free fall. Many stocks have fallen by more than 20% and the Nifty index itself has fallen by about 7% in just 3 days. Technically a correction is one, wherein the markets fall by at least 10%. Whether your investment in regular plans of mutual funds or mutual fund direct plans, the correction ...
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3 Takeaways out of the LTCG & 2018 Budget Announcements

The government in today's budget introduced the much talked about long term capital gains tax (LTCG) on the selling of listed securities on gains of over Rs 1 lakh. This has implications on your mutual fund holdings, more so if you wish to switch to direct plan mutual fund. We will explore this more here. 1.Long Term Capital Gains (LTCG) Won't ...
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3 Reasons Why Debt Funds Are Better Than FDs, Never Mind FRDI

Let's Start learning why debt funds are better then Fds. The government’s new  FRDI law seems to be the biggest news after demonetization! People are very sensitive about money, and there is a lot of interest in saving the commission by investing in direct plans of mutual funds.  Various mutual funds apps and calculators are also in use to compare ...
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6 Simple Steps To Make Goal Based Investing Work For You

Why Invest At All? This sound almost like an inane question. Most people will say, to make more money or to get higher returns. But most likely, you will not get a clear answer about meeting specific goals. Goal based investing anchors your investing efforts and takes off stress to a large extent. It is important to keep tracking these goals ...
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4 Tips to Help Women Take Charge Of Their Financial Matters

There is a great paradox that impacts the lives of women more than anything else. Yes, it has to do with money. Women are very good at working hard, both in their careers and at home. They are wonderful multi-taskers and ensure that everyone – from the office boss to the children, family and even the servant maid - is taken ...
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5 Reasons Why SEBI’s Mutual Fund Categorization Helps Investors

The Securities and Exchange Board of India (SEBI) announced a bold move in October 2017. In a circular, it did Mutual Fund Categorization and Rationalization into five broad categories (equity, debt, hybrid, solution-oriented and others) and a few sub-categories under them (such as large-cap, mid-cap, small-cap under equity). Mutual fund houses would then only be able to have one scheme ...
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3 Reasons Why ULIPs & Endowment Insurance Plans Suck

Insurance and investment simply don’t mix. Life insurance has absolutely nothing to do with investment. Its only objective is to compensate the loss of income arising out of the death of the breadwinner of a family. If he/she survives the term of the policy, the life insurance policy offers no benefit. They claim they will return the premium after 10 ...
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Mutual Fund Fees : Expense Ratios & Exit Loads

Mutual fund charges are invisible to all but savvy investors. This is, in fact, true not just for mutual funds, but nearly all investment products, even your savings account. Now, what do we mean by invisible? We mean that the cost is not explicit or fixed; so it’s not as if you pay an asset management company (AMC) a mutual ...
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4 Reasons To Avoid Sector Specific Mutual Funds

Sectoral funds are mutual funds that invest in a particular industry sector or a theme. Examples are “Pharma” fund, “FMCG” fund, “Banking Fund”. A sectoral theme could be “GST” which invests in stocks that might benefit from the Goods & Service Tax implementation. Sectoral funds are a good way to take exposure in a particular industry without worrying about which ...
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The Billion Dollar Secret Of Indian Mutual Funds Is Backdoor Fees

In Mutual Funds, More and more people are investing their hard earned money. This is about 7.5 lakh crores of funds from people like you and me. Of this, the equity Mutual Funds are along about 4.5 lakh crores.Here we are giving an open secret for mutual fund back door fees. Here is the not so open secret behind these ...
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3 Reasons to Switch to Mutual Fund Direct Plans

Mutual Funds come in two variants - a regular plan and a direct plan. There are 3 reasons why you must consider direct plans. These are lower cost, good support and most importantly zero conflict of interest. #1  Upto 40% More Long-term Savings There is one major difference between direct plans vs regular plans - the expense ratio. Typically, a ...
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Should Gold Be Part Of Your Investment (Gold Investment) ?

Gold is often viewed by different people in different ways. The enthusiasts will always vouch for the purchase of gold saying that its value will never fall, promptly buying physical gold (read ‘Jewellery”). Gold Investment is the one that the lady of the house will invariably support! However, Gold prices have seen far too many fluctuations in the last few ...
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Trader vs Investor : Are You A Trader Or An Investor

Trader vs Investor : “The markets have been falling for five sessions in a row. I think it is a good time to buy”. “My stock is up by 25% in 2 months. I would rather book profits than regret later” . “The stock price is near its support level. I am planning to buy”. Nothing wrong with any of ...
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ULIPs vs Mutual Funds – Where Should I Invest?

Unit Linked Insurance Policies (ULIPs) are aggressively promoted as a great combination of investment and insurance by salesmen who make hefty commissions. This is the only reason why they are pushed so hard and also find so many buyers. While they may appear similar to Mutual Funds - they also have Units that have daily Net Asset Values (NAVs), scratch ...
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7 Mistakes To Avoid While Investing

Investing well requires a mix of discipline and endurance. It may appear boring but in the long run you become wealthy and financially independent. Being Financially Independent in turn means that you control your time and as well like to say time is more valuable than money. So how do you succeed in this boring yet exciting journey (yes it ...
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How To Exit ULIP And Switch To Direct Mutual Funds

Often many investors realize that they bought a Unit Linked Insurance Policy (ULIP) without knowing the various costs that go into the investment every year. They may have liked the insurance cover and the prospect of investment returns that the product promises to generate. An agent might have painted a rosy picture and shown tax savings that might accrue. As ...
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Getting Value or Crores Collected By Banks?

A Bank is a great place to make or receive payments. But if you are using the bank as a channel for your investments, then think about this in the short post here.Are You getting Value for crores collected Banks? Banks Mutual Fund Commissions are growing Banks that have sponsored Mutual Fund companies (or AMCs) have collected Rs 800 crores ...
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Should One Invest In Equities Or Equity Mutual Funds?

Invest in equities or Equity Mutual Funds : “I am a conservative investor”. “I do not like to take risks”. “Equities are not for everyone, definitely not for me”. “Invest your money wisely. Don’t invest in equity”. Do any of these sentences ring a bell? Do you also belong to the same school of thought that shuns equities  in the ...
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How To Make Compounding Work For You, Why Invest Early In Mutual Funds

Compounding growth is a fantastic thing when it comes to mutual funds and investments; but it can be found everywhere! You and I started as embryos but we are finally here because those embryonic cell grew at rapid pace! Behind all life forms there is a simple math. This math has compounding at its core. Remember the story where a ...
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7 Tips For An Effective Mutual Fund Portfolio Performance Review

Mutual fund is where many of us have invested our hard earned money. For this mutual fund investment portfolio, we frequently think for quality not quantity and Naturally, we would like to see that we are not robbed of our hard-earned money. Particularly, when every advertisement or message pertaining to mutual fund investments comes up with the statutory warning that ...
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How Much Money Do You Really Need? Here’s A Financial Plan For Mutual Funds Investment

This may sound like a stupid question. Don’t we all need a lot of money? And since we need a lot of money, shouldn’t we continue doing what we have been doing all our life. You know, do more of the same, do the same routine, go do the same job, do the same commute etc. Spend those countless hours ...
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Why ETFs May Not Be The Right Choice

ETFs, or Exchange Traded Funds, are an effective vehicle for investing in a basket of securities, particularly Equity. Financial advisors often recommend investing in an ETF such as Nifty ETF. This is particularly true in the US and the developed world. However,  ETFs may not be the best way to invest in India, at least as of now. To understand ...
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7 Questions To Ask When Selecting An Investment Advisor

Why is it easier to choose a doctor than an Investment Advisor? Why are people shy, when it comes to asking the right questions when selecting an Investment Advisor? It is obvious that a visit to a doctor cannot be avoided when one is not well. At the same time, people do not proactively seek out appointments with fitness instructors ...
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How to Invest in Direct Mutual Funds

Direct mutual funds are no-commission versions of regular mutual fund plans. With them, you can save up to 1-1.5% per year. Aside from the commissions, the schemes are exactly the same in all other aspects. The only reason they are zero-commission is that you need to buy it from the mutual fund directly or through certain aggregators (such as Jama) ...
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Types Of Mutual Funds : Which Suits You The Best?

Ever wondered why there are so many  types of mutual funds. But you need to choose a type of mutual fund to invest, And which one suits you best? Read on! Investment in a mutual fund scheme is into a pool that in turn invests in various asset classes. Every mutual fund scheme has a set objective. You must invest ...
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How to Select the Best Mutual Fund

How to select the best mutual fund In my seminars and workshops, I am often asked this very innocuous question: “So, which is the best mutual fund to invest in? How to select the best mutual fund?” Well, the simple answer to that question is that there is no such thing as the best mutual fund. If such “best” mutual ...
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8 Secrets Of Long Term Investing

Almost everybody agrees with long term investing. It is a no brainer. What do you think? If it is so obvious, how many of us are really long-term investors? How many "long term" investors have actually made decent money by being long-term investors? 1. What is long term investing Thanks to our tax laws, a vast majority thinks long term means ...
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3 Reasons Why You May Be Getting Deprived On Mutual Fund Investment

You may be thinking that you are making good returns on your investments. You are possibly getting robbed too! While robbery may sound like an exaggeration, how about "losing or deprived on gains that you are otherwise entitled to?". Who exactly is taking away your gains? It is  your broker who is selling regular plan mutual fund investment. There are many these ...
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Six Tips for Investing in Tax Saving ELSS Mutual Funds

We all love to save tax. Don’t we? There are many tax saving products that help us save tax. PPF, NSC, Bank Fixed Deposits, Life Insurance policies are some examples of such tax saving products. ELSS, or Equity linked Savings scheme, or simply Tax Saving Mutual Funds, are an excellent avenue, not just for saving tax, but also for earning ...
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How to Invest Directly in Mutual Funds & The Leaky Buckets Syndrome

This is a frequently asked question. Before dismissing it as a trivial thing, it is important to understand why this question comes up. The question is often asked by people who are familiar with investing, mutual funds but somehow have been lulled into complacence by the 'financial industry'. By the time they ask, it is a bit late as they ...
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Beware of the Advisor ‘Alpha’

Investment advisor Investment advisor often claim that they are an Alpha, a fancy word that simply means the extra returns they can give you buy making you invest in various mutual funds and other financial products. But often the alpha might stand for that alpha wolf waiting to pounce on the next gullible investor. As we know most of the ...
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Mutual Fund Commissions Will Drain Your Expected Returns

It is time to get real about mutual fund commissions. At 1% or more, add the upfront trail commissions, the cost is too high and needlessly gives away most of your expected  gains. You must consider your gains in real, after-inflation returns. If your investment doesn't grow more than inflation then you are losing money! Fees should be a consideration ...
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Savings Bank Accounts are like Working Desks, not Piggy Banks

Most people think that banks are where you should keep your money. And where else, other than a savings accounts. But they are wrong! A savings account is like a working desk where papers and files come, get handled and moved out. You do not keep storing files and papers on a working desk! When it comes to handling your money, ...
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Direct Mutual Funds Give An Extra Edge To Grow Your Money

The Hindu Business Line recently had an interesting article on Direct Mutual Funds that you can read here. They studied over 632 mutual fund schemes across classes (equity, debt, hybrid), for their returns since January 2013 and found this! Summary of the article on Direct Mutual Funds 1. Direct plans are outperforming regular plans in all schemes. Long-term investors in ...
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Story Of A Boat Wala

A man was once asked to paint a boat. He brought with him paint and brushes and began to paint the boat a bright red, as the owner asked him. While painting, he noticed that there was a small hole in the hull, and quietly repaired it. When finished painting, he received his money and left. The next day, the ...
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Ten Key Points Of Retirement Planning In The Mutual Fund Way

Retirement Planning is my favorite personal finance topic. Why not? It is the mother of all financial goals. If you have sorted out your retirement goal by investing in a well diversified portfolio of direct mutual funds, then technically speaking you do not have to 'work' for the rest of your life. Not that you will not work - there ...
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Straight Fees Vs Crooked Mutual Fund Commission. Why Is It So Baffling?

It is a strange world! Not everything is subject to reason. People usually are quite savvy and materialistic when it comes to money. However, the preference to pay crooked mutual fund commission on their mutual fund investments over fees baffles me! Perhaps, there is some deep underlying psychology to it! (We consider fees as a simple straight charge; commissions are ...
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