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Showing posts from May, 2017

RSI: Relative Strength Index demystified

What is RSI? The relative strength index (RSI) is a momentum indicator developed by noted technical analyst Welles Wilder, that compares the magnitude of recent gains and losses over a specified time period to measure speed and change of price movements of a security. It is primarily used to attempt to identify overbought or oversold conditions in the trading of an asset.

RSI attempts to capture the following:
1. Recent gains and losses over a period of time,
2. Measure of speed and change of price movements, and
3. Overbought or oversold conditions in trading of a stock or Index.
Calculating RSI 1. Find out average gain during specified time frame. 2. Find out average loss during specified time frame.
Then calculate the RS value for each closing day. RS = Average gain of up periods during the specified time frame / Average loss of down periods during the specified time frame.
The relative strength index is calculated using the following formula:
RSI = 100 - 100 / (1 + RS)
The RSI pr…

Should you tie up your hard earned money in Real Estate???

Your House is not just Property?One should buy a house for no purpose other than to live in it. Property or Real estate makes for a poor financial investment because the ticket size is huge, and liquidity is poor. This combination is highly risky for placing a bet using a huge chunk of your money. In addition the entire investment has to be sold at one go. You cannot dream of deleveraging your investment by hiving off a part of your investment at a later date. 

Though the popular wisdom seems to indicate that you can't go wrong with property, the fact is that you may or may not be able to sell when you want to--in a slump, entire markets disappear for long periods. God Forbid, if you need money in a hurry, then you are trapped in a buyers' market. Add to this, the myriad hidden charges like Annual maintenance, Repairs, Taxes and Fees, Registration charges, Stamp Duty, Brokerage, and you begin to wonder about the "real" gains.
When you acquire your first house for stay…