GFactor , Decision making tool for Financial Products
This Post will talk about a concept developed by me called GFactor , which is a score system for any Financial Product . You can input 4 factors and get a score for a product .
I am writing a lot for stock markets and trading from so many days , lets get back to personal finance now for sometime . I came up with an idea of measurement of a goodness/badness of a product.
I will call it GFactor , ie : Good ness factor .
What is good nessfactor , Its a rating on a scale of 0-1 . 1 means excellent , 0 means worse . What all factors do we consider when we design this formula for calculating GFactor .
- Trap Factor (Liquidity)
- RR Factor (Risk/return Factor)
- Complexity Factor
- Need Factor
btw , I have posted some charts on my analysis blog and did some very basic Technical Analysis . have a look .
Trap Factor
This will be a score based on number of years you are stuck in the product before you can freely get out , Like in ULIP you are stuck for at least 3-5 yrs , only after the 5th year , you can get out without any penalties . For term insurance there is no trap factor , you can stop the policy any time .
Trap factor score will be like this
years of Trap and Trap Factor
No Trap : 0
1 yrs - 3 yrs : .2
4-10 years : .5
10-15 years : .75
15+ years : 1
Read full article at : http://www.jagoinvestor.com/2009/04/gfactor-your-decision-maker-for.html
I am writing a lot for stock markets and trading from so many days , lets get back to personal finance now for sometime . I came up with an idea of measurement of a goodness/badness of a product.
I will call it GFactor , ie : Good ness factor .
What is good nessfactor , Its a rating on a scale of 0-1 . 1 means excellent , 0 means worse . What all factors do we consider when we design this formula for calculating GFactor .
- Trap Factor (Liquidity)
- RR Factor (Risk/return Factor)
- Complexity Factor
- Need Factor
btw , I have posted some charts on my analysis blog and did some very basic Technical Analysis . have a look .
Trap Factor
This will be a score based on number of years you are stuck in the product before you can freely get out , Like in ULIP you are stuck for at least 3-5 yrs , only after the 5th year , you can get out without any penalties . For term insurance there is no trap factor , you can stop the policy any time .
Trap factor score will be like this
years of Trap and Trap Factor
No Trap : 0
1 yrs - 3 yrs : .2
4-10 years : .5
10-15 years : .75
15+ years : 1
Read full article at : http://www.jagoinvestor.com/2009/04/gfactor-your-decision-maker-for.html
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