Answers to the Top 20 Money-Related Dilemmas

Confused about your finances? Here are answers to the top 20 money-related dilemmas. In the age of economic ambiguity, investors seek solace in the certainty of opinion. For, when the markets tumble and returns fumble, numbers tend to lose their sanctity. It was at such a juncture in December 2010 that ET Wealth was launched, in time to dispense with the much-solicited advice. In resolving your financial quandaries, we helped you come to terms with numbers. Mutual Funds: Which is more important - fund manager or fund house? Both have an impact on the returns earned by investors. Fund management is not a one-man job. Experience matters: in many cases, the fund manager plays a crucial role in the performance of the scheme. What should you do? Give precedence to the fund house pedigree over the individual running the scheme; he is rarely the sole driver of the fund's performance. Mutual Funds: Should I invest in an actively managed fund or a passive one? Diversified equity funds take higher risks, but have given higher returns. Actively managed funds are more popular among investors, but carry a higher risk than passive index funds. No underperformance risk: Index investing takes away this risk of underperforming the market as well as volatility in returns. If you buy an index-linked product, your returns will be in line with the broader market, and fund management charges are lower at 1-1.5% compared to 2.25% charged by actively managed funds.