Tag Archive: Mutual Funds

My Mutual Fund is Losing Money

loosing money in mutual funds

I’m investing in the best performing mutual fund schemes, but after I invest, the fund’s performance starts degrading. What do I do?

This is the story with each one of us. When NAV is low, FEAR factor surrounds us (what to do now?) & when NAV is high, we have GREED (to hold on or to buy more?).

It’s like planting a tree, once the seed is planted, we virtually see it every day, to check on the growth. First few days/ weeks are very exciting, when we see a small bud, leaves sprouting; but after few weeks or a month, it becomes frustrating, as growth is small & we want to see a big tree right away. Whereas it will take years, before the tree is fully formed, will bear flowers & fruits, and above all it must withstand harsh weather& other factors.

Your returns or growth in a Mutual Fund, is an outcome of multiple years of holding period. And in this period, market will behave in both directions, i.e. market may come down resulting in lower NAV or go-up in one swing, with a higher NAV.

Prudent advice; is to just ignore the market swings & stay-put, and only bother about the holding period. No one can control markets, but one can control to STAY PUT 😉.

You are not investing to time the market, but investing for an objective, which has a duration (time-line); for instance, your kid’s education, which is 10 years from now. Therefore, just STAY PUT.

SIP – Stop, Switch, or Increase, what do I do?

SIP--Switch

With market at an all-time high, we been getting queries in all possible formats from our customers, on what do I do with my SIP (systematic investment plans) in Mutual Funds?

My suggestion; find your own reason on what you want to do with your SIP. But strictly, do-not get swayed by the market jump or the recent surge, or even a dip in the future(which can also happen). As per studies conducted on the human behaviour, most of the time we react or make panic decisions based on the external factors,and miss out on the larger picture, or the long-term benefits.

My understanding on all SIP’s is that, they are started with some purpose(goal) in mind, therefore one should follow the simple rule of Start-and-Forget for your SIP… i.e. irrespective of the market movement, High-or-Low, you are not to be bothered, till the time the purpose (goal) date is approached 😉

Even though market is all time high now, but looking at the internal & external factors governing our economy, India is poised towards a great growth, not just for now (2018), but for many years to come, at least 10 to 15 years from now. India is the next China.

INCREASE SIP: if your cash-flow is permitting you to commit more per month, definitely it’s The Best Idea. Do not wait further, and right away take the decision to either top-up (increase) your existing SIP, or choose the next best fund to start another SIP.

SWITCH SIP; based on your study (and I mean proper study)or after consulting a qualified advisor, ONLY, one can look at a switch, i.e. to close the existing SIP and start with a new SIP fund(same or higher amount). Overall, just by looking at newspaper/ TV info & ads, one should strictly avoid such decisions/ switch.

STOP SIP; strictly a big NO. As suggested earlier, you are starting an SIP for a purpose (goal) & not to time the stock market, therefore one should not look at stopping SIP. Even if you want to stop, ask this simple question, where would you invest that money now?

Therefore, STAY PUT & JUST INCREASE!!!

Mutual Funds Disclaimer: Investment in mutual funds, is subject to market risks, including the potential loss of principle and fluctuation in value. Past performance does not guarantee future results. You should consider the Investment objectives, risks, charges and expenses of investment securities carefully before investing. Read the prospectus carefully before investing.

Don’t just invest in Mutual Funds… Invest in customized Mutual Funds Plan!

How to choose correct Mutual Funds

I’ll be the odd one out here, where I’m asking not to invest in Mutual Funds.

Whereas, the entire country is abuzz with Mutual Funds growth story & one can see smart campaigns, on why they are the best?

To start with, I have this usual question, do you understand Mutual Funds?

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My dream – How to become Rich?

My dream - How to become Rich?

I thought of writing something differently this time. I asked this question, what is one common dream, most of us look forward to. I didn’t have to scratch my head, “how to become rich” is everyone’s dream, but very few live to live this dream.

It’s not about the dreaming, but it’s all about the efforts put to live this dream.

My best analogy is old DD comedy show of “Mungerilal ke haseen sapne”, where Raghubir Yadav used to dream big and while dreaming, will elaborately get into details & hard work, but only in his dream, and towards the end when he wakes-up, he is back with nothing in hand 😉

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Direct Plan Vs Regular Plan in Mutual Funds Investment

should-you-go-for-mutual-fund-direct-plans

I am confused?
There is a big hoo-ha in the market & media now a days related to “direct plans”.
What is a direct plan? How does one benefit from a direct plan? And compared to regular plan, which is better?

Let’s first understand Mutual Fund charges.
Mutual fund (MF) investments come with an inbuilt fee structure or charges, which is certain percentage of the amount invested. This charge, which is usually between 1.75% to 2.5% for equity schemes annually, is debited on the total investment made or the AUM (Asset under management) every year. In simple terms, if one wants to invest 1lac in some equity MF scheme, where annual charges is 2.5%, Rs.2500/- will be debited by the AMC (Asset management company) towards

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Why Mutual Funds are better option for beginners?

mutual funds better option for beginner

When considering investment opportunities, the first challenge that almost every investor faces is a plethora of options. From stocks, bonds, shares, money market securities, to the right combination of two or more of these, however, every option presents its own set of challenges and benefits.

So why should investors consider mutual funds over others to achieve their investment goals?

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Investing 101

If there’s one thing that all wealthy people have in common it’s this: They invest.

That’s because investing money is the smartest and most reliable way to grow it over the long term, after you have first built up your emergency savings (which never gets invested).

Investing in a Nutshell

Investing is putting your money in a financial vehicle that might enable it to grow more quickly than it would in a savings account.

While most of us think of “earning” as putting in hours of work and getting paid for that, investing essentially puts our money into a marketplace where companies and governments and other entities can use it to create a profit that will be returned to us. (At least that’s the hope—some investments do go bust, taking our money with them.)

Most commonly, people invest by buying financial assets like stocks, bonds, mutual funds and ETFs (and if you don’t know exactly what these are, don’t worry, we’ll describe them later). When we sell them, we hopefully make a profit by selling at a price higher than what we bought them for.

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Financial Planning – another investment selling pitch ;)

Financial Planning is not just Selling products

Yes, very true, this is exactly what everyone thinks in India, whenever we hear the term “Financial Planning”.

Since the day I have started my venture in similar field and my interactions with my near & dear ones to promote same, reactions have been quite similar, i.e. they perceive my pitch as another advisor in town, who wants to sell investments (i.e. Insurance or Mutual Fund). And all most all of them have replied back (though without hurting my feelings), that they will call back once they have funds in hand… 😉

As a matter of fact, my own experience of last 15 years in capital market & my recent venture, where we have registered more than 1500 customers for Financial Planning, most of them or rather 99% of them, relate the term “Financial Planning” to “selling new investments”.

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