Which option is good in mutual fund?

In India, we get three options for mutual fund: Growth (where once you buy your investment grows or drops till u decide to sell), Dividend (Regular/irregular money is paid as dividend as a percentage of the face value), Dividend reinvestment option (The dividend so released is reinvested).

Now i have done quite a lot of study on which one is better and i have picked the Dividend option. Let me argue it out in the next few paragraphs. This is valid only for equity mutual fund and not logical for the income/debt mutual fund.

Let us assume that i decide to invest Rs 5000 on a NFO or an existing mutual fund and assuming the face value or the present value is 100 i get 50 shares of mutual fund. The dividend scheme gave 50% dividend in the first year itself as the market was really good. Now i decide to sell after 2 years and take out 3500 due to some unforeseen scenario (Effectively delaying is non-negotiable) and that the market had tanked and my mutual fund return on this day went down by 25% from the face value at which i bought. So let us see how the three different scheme perform:

• Option 1 (Growth): End of two year i get 75 per share or my investment is Rs 3500/-. I sell all my shares and get back my 3500.
  
• Option 2 (Dividend): After the dividend my MF value is 50/- (as 50 was given in first year) in dividend option. I have 2500 as dividend tax free. It gets 5% interest from bank (after catering to Income Tax) and after one year it is 2500+125= 2625/-. On second year, as in growth option my value tanks by 25%. SO it is now Rs 37.5. I have already 2625 in bank. so i need the to sell 24 shares to get the remaining 900/-. So i am still left with 975 rupees (in my mutual fund even after meeting my exigencies) which again can go up.
• Option 3 (Dividend reinvestment option): The 50 i got in dividend is reinvested at 50 per share. so i get additional 48 shares (taking care of entry load of 2.25%). so in total i have 98 shares @ Rs 50 in year 1. Now in Year 2 when i sell as i mentioned earlier market tanked by 25% and share value is 37.5. so to get 3500 for my exigencies i sell 94 shares which is worth 3525/-. So now i have 4 shares with value 150. So advantage over option 1 is i made 175 (25 in cash and 150 worth stock which can go up in future)
  

Assuming the probability that your exigencies fall during the same time when market tank is a higly correlated event, you can now see why a dividend investment is best. If things were good all three options are equally good with an edge for dividend option as now you do not have any capital gain!!

So till rules of the game change, i will bet on dividend option for Equity.

Rating Airlines in India

This is as per my rating with the airlines having flown at least 5+ in each of these flights. I intend to review it as and when i get time. And strangely Indigo charts quite high with their great on time service. They have the unique way to fill up the aircraft well ahead of the boarding time. So never have any delay and are on dot with respect to their time commitments.

The overall rating of mine is highly biased towards ontime!! And sadly now i find the lack of table creation in Blogger a serious drawback.

Chicken pox and local/allopathy medicines

Recently i was down with Chicken pox. I sepnd some time going through the web on some good blog on it. But could not find any. So i thought will write one when i am cured.

Chicken pox was confirmed by my doctor on seeing dew drop shaped blister in stomach and back area. There seems to be many variations of it like Herpes.

Medicine:

I had Acyclovir-200mg 3 times a day (anti-viral has good effect if u start having it as soon as u see the first blisters), Paracetomol (in case i had fever, i never used it as i never got fever), Citrizine (For reducing itching 1 1/2 per day), Amoxicillin (To prevent secondary infection). Check with you doctor for the right medication.

Food:

• Avoid spicy food completely as higher chilli, spices and other exothermic food as it makes the body hot.This can causes more blisters to come both within and outside the body
• Have lot of fruits and vegetables
  
• Lemon is good and can be used as a replacement for salt in salads.
• Have curd. For lunch, rice + curd + salads will be a good combination.
• Take lot of tender coconut water as it is good to build your immune system.
• Take complete rest and avoid reading and any strainful exercise which heats up the body

Observations

• Cool your body under fan as the area which locally gets hot will cause the blisters to erupt. Ensure that no area gets hot even when you sleep.
• You can sleep with neem leaves spread on the cot as it allows to keep the body part facing the cot cool.
  
• Do not break the blisters as it will cause more time to cure.
  

Bath

• Avoid bathing till the blisters dries off which will take 8-12 days (with Acyclovir!!)
• When you bath avoid soap and bath in warm water with neem leaves added to it.
• For few days after the attack bath without soap and use neem leaves.