Should you trust your mutual fund manager?: Finance Trading Times

Should you trust your mutual fund manager?


A request for people who are reading my articles for the first time: Please start reading the articles in chronological order – First article First. This will ensure that the concepts presented here are easy to grasp and the continuity is maintained.

A number of people have contacted me asking whether they should invest in mutual funds and what are the risks associated with a mutual fund. Well, most of the people are well educated about mutual funds so I’m not going to list the advantages (diversification, professional management, etc.) and disadvantages (market dependency, historical return do not guarantee future returns, etc.) of the mutual fund investment. You can find a lot of articles that talk about them, majority of them available on finance websites, primarily talking only about the benefits of Mutual Funds, as most of the articles are written by financial experts who work for finance companies and want to earn handsome commission for selling more units of their fund. Majority of them can be found on sites like rediff.com, moneycontrol.com, personalfn.com with jazzy titles like “Invest 10,000 now to retire Crorepati” or “Save big on tax by investing only 10K”. These articles carry some data tables, showing how an investment in so and so scheme could make you a crorepati by the time you retire, or how much tax can you save if you get into a Insurance plan for 25 years. The website at the end of the article, puts up a disclaimer saying that views expressed here are of the author and website does not take any guarantee for investment based upon the suggestions. Same thing goes with the advisors who come on Business News channels. Such articles with these flashy titles but highly inaccurate data serve multiple purposes:
• Jazzy titles make a person click on the link. This adds to the website revenue, by showing ads – More profit as more people visit the pages
• The Author or the so called “Investment Expert” or “Certified Financial Planner” gets to promote his concept (basically his product- Insurance scheme, mutual fund) to millions of people
• The website adds a message board at the end of each article – Visitors start publishing their “intelligent comments” and fight with each other over what is better or worse, what is wrong or right with the article, what is the best investment strategy and so on. All this results in millions of webpage hits: Net result – pretty good profit for the website, which is also shared with the author.
• Now a days, the authors also provide their email address, so that people can contact them directly. The psychology that works here is as follows: People believe the author is a real expert – that’s why he is able to publish his articles on reputed websites, so they contact him for his expert advice and the response that comes in is for an advice to invest in that particular scheme. I tried contacting a few of such authors pointing out mistakes in their calculations in their articles. The response I got was not answering my questions, but “XYZ scheme is very good and reliable, please invest in that, you will definitely make good money”.

You may be wondering what is the reason I’m quoting all these things here, and how do they relate to the title of this article? Well, I’m attempting to establish the link on how an investor’s decision is influenced, given the free and easy access to information/advices on internet and television.
Why is the Mutual Fund Manager interested in managing your money? If he’s such an expert, why doesn’t he keep the money making secrets with himself and keep trading for himself making great profits. Obviously he’s not doing it for charity. You have to pay him a commission- that either comes in the form of “Entry Load” and “Exit Load”. This is the commission that also pays for the advertisement of Mutual fund and payment to various agents who are willing to come to your office/home to fill up the forms for you and take the Cheques for investment money –all services appear to be free with home delivery.
Usually, when a fund comes into the market, it comes through NFO or New Fund Offer (equivalent to IPO for stocks). People subscribe to it by investing their money. For any mediocre fund, it is not difficult to collect around 800 crore rupees from the market. Established fund house like HSBC managed to gather as high as 1700 Crore Rs. for their single fund in 2003. The mutual fund manager takes a percentage of this collected money as his commission to manage the fund. It usually lies in the range of 1.5% to 3%. Now, for a very mediocre fund that collects 800 Crores from the market, the fund manager at a rate of 2% takes home a whooping 800 *2% = 16 Crore Rs every year! The remaining amount of commission collected in the form of “Entry/Exit Loads” is used to pay to the agents and for advertisement and promotion of the fund. In essence, everything comes from your pocket. If you see a full page ad in newspaper for a Mutual fund you’ve invested in, it is you who has paid for it.
Each of these ads, either on TV or in newspaper, carries the famous tagline: “Mutual Fund investment are subject to market risks, please read the offer documents carefully before investing.”

So now, when the fund manager is pocketing such a huge amount of money (16 crores each year) even for a mediocre size fund (800 crores), why is it that he CANNOT guarantee even a 1% profit? Forget about the profit, he cannot even guarantee the protection of your principle amount that you give for investment in MF.
The reason – Having decades of experience in the market, the fund managers (and all the mutual fund companies) know the dangers of stock markets. They are well versed with the risks, downturns and the panic periods that may come anytime. They know that markets work randomly, their direction is unpredictable. The regulatory authorities like SEBI, also know the risk in stock market investments, so they have implemented this legal requirement for mutual fund companies. Recently, you may have heard a lot of controversy over investment of Provident Fund money into stock market, which is opposed by many politicians and economic experts. Its due to the same reason, the government has the liability of Provident Fund money, it does not want to suffer losses if the PF money invested in the stock market going for a toss. That’s why there are proposals for only a small percentage of PF money to be allocated to investment in stocks.

Now I want to ask the same question to people who claim to make 15-20% profit on their individual investments in Stocks. If the Fund Managers and Companies with decades of experience cannot guarantee even the protection of your principle amount, where do you stand when you say that you can make 15-20% profits year-on-year? What is the basis of your justification and calculations?
Then, some of you claim that a minimum 15-20% annual profit is guaranteed if you invest in the so-called BlueChip companies. I’ve already attempted to prove that we cannot differentiate between good and bad companies in a previous article. However, if you as an individual are so sure of making even atleast 10% profits by investing in so-called bluechip companies, then even the fund managers can invest in the same bluechip companies – still why they do not guarantee anything? The reason is same – highly uncertain and unexpected market behaviour at unexpected times even for the so-called blue-chip companies.

This also takes us to question for another commonly heard term – diversification and asset allocation. One of the major benefits of mutual funds is diversification which eliminates the risk of putting all the eggs in one basket. Asset Allocation is also linked to the same concept of diversification, additionally it takes into consideration the percentage money allocated to different stocks in the portfolio. Even a small size mutual fund will have a MINIMUM of 60 stocks in its portfolio at any given point of time. Now, when the mutual funds have this diversification and asset allocation as one of the major plus points with them, why still they cannot guarantee any profits?

Mutual Funds also give the advantage of PROFESSIONAL money management – which implies that educated and experienced professionals take care of your money. However, still the question remains the same – why no guarantee of profits?

I usually do not present anything without facts: So let’s have a look at the performance of fund managers (Stock-Equity Funds) over the period 1986 to 1995, as compared to the rise in the market. (Graph at the begining of this article – You may open the graph in a new window for better viewing).

The graph shows how much the returns generated by the fund were LAGGING behind the returns generated by Market Index during each year. For e.g. in 1989, if the Market Index (S&P 500) made 100% profits, then the equity funds for the same period were lagging behind the market by 82%, i.e. the equity funds made only 18% returns as compared to 100% returns from the market. If the market went up by only 10%, then the equity funds produced only a 1.8% profit. Even in the best case, in year 1993, the graph is showing only 40%, which means if the market went up by 100%, the equity fund went up only 100%-40% = 60%.This was the best case scenario with respect to the equities fund. The most IMPORTANT of all: The last bar graph shows a summary of entire duration 1986 to 1995 – indicating that during the overall 10 year period, on an average the equity fund could manage only 100%-80% = 20% returns as compared to a 100% market returns.
Obviously, if in any year the market went down, the mutual fund was down further with much bigger losses.
One thing to note here is that the performance calculated above was not for any particular fund, but the average return generated by all the available equity funds was taken into consideration. As of today, there are more than 3600 funds available in India alone (Source Association of Mutual Funds of India - http://www.amfiindia.com/). Which MF can you choose, how will it perform, how will the fund manager act with your money, NOTHING is certain. In Holland, where I did my Masters Studies, there are more mutual funds available, than the no. of stocks listed on the Amsterdam stock exchange. If it was so easy to make money in the market, everyone would make money just by investing in these funds or by going for diversification at individual levels.

The fact is that there is no individual – educated or experienced, uneducated or naïve, businessmen or layman, trader or fund manager – absolutely no one can guarantee anything in the markets. Hundreds of factors play role in the valuation of the stocks. Predicting them is a dangerous and highly inaccurate error-prone task. If you believe that you are doing the right selection of stocks at your level, the fund managers atleast have some advantage over your inexperience and ignorance. They have much more money than you to play around with. If you “Invest for LONG TERM”, then every single fund also advises individuals to invest for long term, & the mutual funds carry on for long term. And still the fund managers fail, without guaranteeing anything. How can we, INDIVIDUALS, be so sure of making sure shot profits?
Once again, let me reiterate - Things work RANDOMLY. It’s a risky business; make sure you understand the risk for your hard earned money before jumping in.
Have Comments or Questions? Please post them as comments using "Post our Comments" link below. Your queries will be responded for free in 24 hrs!

30 Comments: Post your Comments

Vishal said...(on 1 June 2007 at 06:45 )  

Amazing!
Every single article I read on this blog, forces me to think again and again. What exactly we are doing in the market, making a fool of ourselves. We end up paying pretty hefty commisions to Brokers and MF managers, and they keep the real profits as comissions.
What we are left with is "Subject to market risks"

Somehow, after 7 years of experience, I am forced to rethink what I've been doing with stock adn MFs.

Kudos to Mr. Shobhit - Hats off, atleast someone is there who despite his high level of educational qualification is putting in efforts to educate the common Indians. Much better than those who draw salary worth 1 crore from IIMs.

Please keep up the good work sir, ignore comments from people who do not agree with you.

Regards,
Vishal Raina

yash said...(on 1 June 2007 at 10:31 )  

really an eye opening topic
such kind of topic r to b written for those , who cannotunderstand the ABC's of the market

so i wod like to advice u , plz conti. wirtten, and make the ppl of india ignorance free abt stocks

shashi said...(on 3 June 2007 at 08:59 )  

We are still waiting for your main article on advise upon making efficient investment strategy for maximising gains and minimising risks.
please comply.
Thanx

nickp2 said...(on 3 June 2007 at 16:10 )  

Hi Shobit,

Thanks for this information.I agree with you that the market is full of risk.But I have two points.

1) I think and i might be wrong, but you have compared the returns always with a particular index.
So if the index rose 373% the mutual fund rose 60% this is how u have compared.So do u mean to say that investing in an index fund is better.Since it mirrors the index whatever loss or gain the index makes the MF must make a similar loss or gain.

2) Also you mention about investing in bonds can you give specific examples as to how we common people can invest in bonds or safe and secure investments??

Investment n Trading Advisor said...(on 3 June 2007 at 23:35 )  

Nick and Shashi,

I was planning to approach this is a sequential manner. It will be too early to introduce the efficient investment strategies - please wait for sometime.
Nick, you are absolutely right that Index funds are the best bet in the market. I'll explore the benefits of those and the risks involved quite soon.

Thanks,

Investment n Trading Advisor said...(on 4 June 2007 at 00:09 )  

Nick,

Bonds are available for online purchase (IT depends upon your broker whether he has the trading facility in bonds) - please check with your broker.
Secondly, The tax-saving bonds keep coming at regular timings in the market. majority of them come in Feb-March, as that is the time for financial year ending. They are either available for online application, i.e. through your broker, or you can even buy them by visiting the site of that particular organization offering the bonds. Otherwise, there are these paper forms that can be used. Just visit any of the bank branches and the officer will do all the paperwork for you.

Bond investment also need proper planning. It is a long term investment so make sure you know what is the lockin period and how much u wanna invest.
I'll publish another article on bond in some time

Pravin said...(on 5 June 2007 at 01:09 )  

Hi Shobhit,
Thanks for writing such wonderful articles. I request you to write articles on stock picking skills. As there are thousands of stocks available in the market and selecting potential multibagger or which can give you decent return is really an art. so I wanted to know what factors one should consider while purchasing / selling stocks to minimize the losses or maximize gains. At present I am following value investing principals laid by Warren Buffet and his guru. Your views on this is highly appreciated.

Thanks again
Pravin

Vishal said...(on 5 June 2007 at 02:03 )  

I think you are not able to understand the concepts that are being presented by Shobhit. He's trying to stress that no one can pick up stocks to get exceptional returns - while you are asking him the same questions.
Please read the article from the very begining.

anand said...(on 5 June 2007 at 02:20 )  

Hi Shobhit,
Really, it is worth reading. Pl. send your articles on my email id : anand.blnr@gmail.com

ihkris said...(on 5 June 2007 at 04:57 )  

Hi Shobith,
I am really getting excited and thinking deeply after reading ur articles.In our country though we are professionals higly educated we suffer from lack of personal finance knowledge.Govts want vote banks not people empowerment hence they introduce sick schemes that screw our economy in the name of welfare.Instead Govt should start educating us from the school days itself. Having good financial knowledge right from the schooldays will surely help us to achieve more in life and to grow further.I dont know how reading about the history,and sick poems is adding value to our career than financial stuff. You are really doing a great job dude. But i want this message to reach many people and please think of the best way to spread this message to indian.

Anonymous said...(on 5 June 2007 at 23:30 )  

Hi,

Thx for u r articles.

U mentioned that u have in UK pension industry so I have a question related to UK Indian investments.

Currently I am based in UK from last few yrs but want to invest in Indian Mutual Funds.
I have British Citizenship + OCI(Overseas Citizenship of India like PIO card), which means I can invest in Indian markets like any other NRI.

So my question is if I invest in Indian Mutual Funds then will it attract any tax in UK.

To give u more clarity,
1.I want to come back to India for good after 2-3 yrs.
2.I want to invest in Indian MF/Bonds say in next 1-2 months.
3.I don't want to redeem my investments say for next 5-6 or even 10 yrs.
This means I will redeem my investments in Indian MF many years after I come to India for good.

Whats u r opinon about UK taxes on my Indian investments while I am still in UK.

My email id is rguptaday@rediffmail.com

Anonymous said...(on 6 June 2007 at 00:13 )  

Hi Shobhit,

I feel really lucky to get an opportunity to read your blog. I don't belong to this industry but have interest in wealth creation. I keep reading the articles on rediff and tutorials in investopedia and keep forwarding them to all my friends. But sometimes i did thought is it so simple to be a millionare by investing regularly in moderate risk equity funds for 15 years

I knew some of the things you have mentioned in the article but i got the clarity only after reading this article.

This is the first year where i started earning enought to make some considerable investments and i was looking for the best channels and all the reading directed me to MFs. So i decided to start off with few of them.

Yesterday, i started 5 SIPs for a duration of 1 year in 2.5k in Magnum tax gain, 2.5k in Reliance tax saver, 2k in Magnum contra, 1.5k in ICICI infra, 1.5k in hdfc prudence balanced fund, 1.5k in sbi balanced fund.

Now, that i am reading your blog, i am just getting a feeling that i have invested too much in equity which involves a high risk. Rather than investing in this fashion, i think i should have kept 25% of what i have invested in equity in flexi FDs of say ICICI.

I will go through other articles now. Thanks a lot for all the knowledge sharing in the most apt way. Keep writing and please mail me your articles on parimaljoshi@gmail.com

- Parimal

Anonymous said...(on 6 June 2007 at 01:03 )  

Hello,

I have invested this year - jan07 in ICICI pension plan. During the start itself they deducted 20% as there starting fees. Then from jan the market is not going well and the left amount that was deposited in pension plan also got reduced.

I want to know are such equity related plans good for pension planning or we should conventional plans (like sbi) where at least the principal and amount made during a year is safe.

Secondly the plans has option to save in equity or debt in the percentage we want. So how much % we should keep in equity or debt?

Pls advice us and also you can mail me advice at sanjeetkhanuja@yahoo.com

Thanks, Sanjeet.

neeraj said...(on 6 June 2007 at 02:28 )  

Hi,

It means we sholud never invest into stock markets.
Please reply me
neerajkrec_1980@yahoo.co.in

Nagesh Pai said...(on 6 June 2007 at 03:31 )  

Its true that distributor-pushed mutual funds are prone to mis-selling and of course the entry load which is used for advertising and distribution costs.

However there is a welcome trend of direct selling and zero entry load mutual funds like Quantum AMC (www.quantumamc.com). They dont have any distributors and dont heavily invest in large ads. This passes on to the customer as zero entry load and all his money gets invested in the chosen fund.

Investment n Trading Advisor said...(on 6 June 2007 at 05:11 )  

Nagesh,
It's only a marketing gimmick - just to disguise the expenses.
Have a look at http://www.quantumamc.com/cost.html on the same website. On this page there is a table (titled table 1). It is mentioned EXPLICITLY that the distribution cost is 5% - The reality: No fund in the market has such a high distribution cost. No fund ever takes commision in the name of distribution cost. If you can find one such fund which charges you the distribution cost, please send the details to me. Distribution cost is there, but it is included in Entry/Exit Load, and is not as high as 5%.

In Summary: They are only trying to make a fool of investors by trying to tell that they are cutting on expenses, which really doesn't exist.

At the end of the article, they have included the following disclaimer :-)
"Please note that the above example provides a basic idea of the benefits of investing in a low-cost fund and is based on the various assumptions specified above. It is given only for the purpose of illustration. Investments in mutual funds are subject to market risks. The dividend distribution policy and NAV of the scheme may vary depending on the forces affecting the securities markets. Please read the offer document of the scheme(s) before making any investments"

Then, they do NOT have Entry Load, but they do have EXIT load...this is what is mentioned on the website:
"Entry Load: Nil. Exit Load: On redemption/switchout within 6 months of allotment-4%, after 6 months but within 12 months -3%, after 12 months but within 18 months - 2%, after 18 months but within 24 months - 1%, after 24 months -Nil"
In essence, even if you invest for 2 years or more, with nil exit load, can you be sure that the fund will actually make money?

If this fund is so low on charges, it will mean that other fund houses should either reduce the charges to the level of charges of this fund, or they will be out of business. However, nothing like this is happening in the market....so there will be the costs, in one form or the other, hidden or open, and individual investors will be made to pay that.

Vishal said...(on 6 June 2007 at 06:41 )  

In response to IHKRIS comments, I think finance is NOT for everyone. If everyone starts to trade, there will be no one to providfe food, milk and other basic necessities of life.
However, I do agree that such articles should be shared with everyone, to educate everyone.
I'm already asking my friends and relatives to subscribe to this blog. I'm also posting the links on message board of rediff website,
Probably we all can do the same.

ihkris said...(on 6 June 2007 at 07:54 )  

Hi Vishal,
financial knowledge doesnt mean inesting in equities.Knowing the value of money having the desire to earn more and grow up in life for the same.In Indis especially in rural villages many people doesnt even know how to save and why to save money?Many spend money without knowing its value.

Trust me if u are really interested in growing rich your productivity,thoughts,behaviour everything gets improved.

I am basically from a rural village with farmers background and i have seen many potential guys not growing further inlife only because of lacking good knowledge about many things like money,risk taking etc

Even i came to know abt this fabulous site frm Rediff and i am forwarding to all my software buddies

I strongly say that reservations in India really didnt give the expected fruits and lots of in equalities rised in backword classes itself. Just check how many reservation guys are there in Private sector like Software companies..

India needs more empowerment and enlightenment not reservation alone.

Regards
HARIKRISHNA

Nagesh Pai said...(on 6 June 2007 at 22:50 )  

The distribution costs etc that is passed on to the customer may or may not be 5%.. But the entry load of most funds which is about 2.5% itself amounts to a lot when you compound it over years.

The exit load, which is applicable only for their long term equity fund, may look exorbitant, but their site mentions that their scheme is only for longterm investment.

Ideally exit loads in longterm funds are meant to compensate other investors who have pooled in. To check the integrity of the fund you may want to check, whether the exit load is reinvested in the corpus or is usurped for marketing and distribution costs.

The comment that you mentioned, in the fund is an expanded and more detailed version of the statutory warning that you see most ads gibbering "Mutual funds are subject to market risks...."

The fund is very small at the moment and owing to no advertising, the other funds are not pressurized to follow suite. Rather they are going on increasing their marketing spends from the pockets of the investors. Its only when alert and informed consumers like Shobhit take sight of such new initiatives
would there be a change across the market.

Disclaimer: I am not an investor in quantum mutual funds. I am considering investing with them soon. My comments above are purely based on my evaluations from their website and other reviews by their existing investors.

Mahen said...(on 7 June 2007 at 05:16 )  

Brilliant article man... really appreciate the effort you are making in informing various people about the nity gritty details. How i wish more and more number of people would read these articles. I am forwarding the link of this blog to all my friends. Its a sad thing that in india we seriously do not have education related to finances and money. This is one course which must be made mandatory in all colleges, irrespective of specialization.

Anonymous said...(on 13 June 2007 at 03:07 )  

Well researched article, Would like to read something more from you.

Ashwin Sopori, My e-mail id is
tryash@rediffmail.com

Pawan said...(on 13 June 2007 at 04:05 )  

Hi,
It was a really good written article BUT as it is said in hindi "doodh ka jala chaaj bhi fuk fuk ke peta hai" WHy r u so interested in educating people, isnt ur site being so often hit and making money. AND as an investor im not concerned what the fund manager is getting, IF im able to make some profit at the end of the day.
AND if not MFs where do i/we invest our hard earned money to earn good enough profit.
We all know LIFE in itself is a risk and i/u dont expect that we lay down in our homes and somebody knocks our door to say "hey man! come let me multiply ur money".
Its very easy to find faults and criticise but can u also give ideas for gaurantted returns. IM 100% sure "NO".
I know my comments do not match with the others in the list and it may or may not be included and responded. BUT if even u manage to read it its good enough for mr.

pawansac@gmail.com

Investment n Trading Advisor said...(on 13 June 2007 at 21:04 )  

Hi Pawan,

Thanks for your comments. I'm a critic and so I like like-minded responses :-)

Let me answer your questions one by one:
1) I'm NOT here to educate people - probably you're getting this idea from some of the comments left by other readers. Blogs give opportunity to express our views - I'm only attempting to publish my views about the riskiness of any job/investment/finances. Take it or leave it is left upto the reader.
2) In all my articles, I've always stressed about the HUGE size of the market. What can I, as an individual do, if I criticize anything or try to go against the stream. There are 3 things attached to any investment - Returns, Risk and Trasaction costs. It's easy to look at only the survivors with good returns and jump in. My attempt is to create awareness about the other two factors -Risk and Transaction Costs. After taking so much Risk and paying transaction costs - are you really making money? That was the question I've asked in my very first article (http://invest-n-trade.blogspot.com/2007/05/are-you-really-making-money-in-stock.html).
3) I'm NOT against the equity market - that is another misinterpretation of my articles. In fact, I too work in a financial services company, I earn my living from this market. I'm all for knowledgable and effective investment planning. But what every Tom, Dick and Harry does is make uncalculated bets in the markets in the name of trading and investments. I just wanna expose the dangers of such faulty and risky ventures. Majority of the investing population in India is young, most of them started working after 2002. They have NOT seen the downturns of the market -which if comes, wipes out the wealth in no time.
4) You are right - it's easy to criticise a system. But isn't it also useful to know about the problems with that and be careful. That too when you have hundreds of people only talking about goodies of stock market, while hardly 1 or 2 talk about its drawbacks.
5) Repeatedly, in all my articles, I've stressed the fact of RANDOMNESS. Definitely no one would come to me and offer me money-multiplier, but if I've to do it for myself, then I should know what exactly I'm doing, and what all can happen with it. Guaranteed returns are possible, principle protection is possible - but does your Fund Manger offer it? NO. So what's the point in giving money to him. What will you do if he looses your money, along with the transaction cost? NOTHING. Then it's better to be educated and make some careful planned investments on your own. If it had been so easy to create wealth, there would have been hundreds of Warren Buffets in the world.
6) Offcourse, we can create wealth. But are we aware about what all instrumetns can be used in the market to create wealth? Can I start talking about Options, Futures, Commodities, etc. straightaway, and make readers scratch their heads about what I wanna tell them. Some comments left on the blog are asking for immediate money making, efficient investmetn starategies or stock picking skills. It's all the greed for money that makes us take faulty positions. I'm attempting to avoid that. I published my first article on 28th May. It has been around 2 weeks and the hit count on this site has increased substantially. That shows how eager we are to jump in - wait for sometime. Let us approach it in a planned and informed manner. I will definitely inform about efficient investments.

Anonymous said...(on 13 June 2007 at 23:31 )  

Hi Shobhit,

Thanks for taking out time to answer my query.

One correction: I am not investing 1.5 k every month for one year. Rather, I am investing a total of 8500 per month in 4 different MFs for a period of one year, couple of them are ELSS and rest of them are again equity funds. And SIP of 3000 per month in two balanced MFs.

So, the total amounts to 1,02,000 per annum in equity and 36,000 in balanced MFs

You are right, i have started the investments when the markets are at peak and major chunk of my investments are in equity. My total investment per month is approx. 40% of my in hand salary.

Now, my investment is based of following assumption :

Since i would like to stay invested for 3-4 years, that will average out the losses and provide me decent gains in equity is what my idea was since its a SIP

My query now is:

1. What is the best time to invest in equities?
2. If the market is already high, as in my case, what would have been a wiser way of investing the same amount of money that i have invested as mentioned above?

Thanks a lot for your time once again.

- Parimal

Chetan said...(on 27 June 2007 at 04:30 )  

Just Amazing....

I like ur style of presenting the facts and bringing the truth.

Keep it up,

Regards,
Chetan

Thomas said...(on 4 July 2007 at 07:30 )  

Dear Sir,
I do like the Value Approach you are advocating to all investors. Most of the worlds famous investors who had a common guru B. Graham like Warren Buffet, Peter Lynch etc advocate the same.
How the essense to good returns is to buy low and sell high and how an individual should go about it.
Please do send me your mails @ thomasmathewsa@gmail.com

radha,ankamaly said...(on 5 July 2007 at 23:08 )  

dear sir,
why r u afraid of taking risks.those who do not take risk will not win in life.mutual fund is for brave,positive people.people like me clearly know that our principal amount itself is not safe.but we will do it,because we know that this is a good way to become rich though dangerous.

Bhupesh said...(on 13 July 2007 at 04:09 )  

1) SEBI does not allow commission sharing by MF brokers. But many of us do our own study to select best Mutual fund for us and allow broker to pocket handsome 1-2% of investment just for his name. Directly investing with fund hose also does not save any money to us. This monopolistic behavior from MF houses and supported by SEBI.

2)Seems MF are better then ULIP. Insurance companies are milking money from customer, a) hefty initial year commission, b) good early maintenance charge, on over that come along with assured repeated business (annual premium for long years).

one_eyed_bandit said...(on 11 August 2007 at 21:13 )  

I think you are a proponent of the Efficient Market Hypotesis but at the same time the most important thing people miss in the larger scheme of things is its not abt a specific stock or fund that makes up for successful investment strategy while it is infact all about the PORTFOLIO.

K Tandon said...(on 16 July 2008 at 02:38 )  

MoneyLIFE, a fortnightly personal finance magazine is the first publication in India to introduce fund & stock screens with stock identifications through a well-tested & transparent method (& not through hunch, impression or gut-feel).

MoneyLIFE has set the highest standards of incisive analysis in discussing fund performance which are taken very seriously by the fund industry & the regulators.

It empowers the individual to invest & spend wisely by offering hard facts, insightful opinions, wider options, useful tips from the world of money.

Investment for the ‘MoneyLIFE’ personal finance magazine is not subject to market risks.

www.moneylife.in

Wish you all happy and fruitful trading and investing activities with safety! = = = Post a Comment

Copyright Information:
© Finance-Trading-Times.com
Please see Our Copy Right Policy. All the articles, posts and other materials on this website/blog are copyrighted to the author of this site. The content should NOT to be reproduced on any other website or through other medium, without the author's permission. Contact: contactus(AT)finance-trading-times.com

DISCLAIMER: Before using this site, you agree to the Disclaimer. For Any questions or comments, please mail contactus(AT)finance-trading-times.com.

About UsAdvertise with UsCopyRight Policy & Fair Use GuidePrivacy PolicyDisclaimer