The Mutual Funds Investment Thread

[TheSloth]

@rockfella Oh no! Investing 10K per month is a huge thing! Even after investing 12L the maturity amount is just 26L.
BTW what app is this?

 

[rockfella]

@rockfella Oh no! Investing 10K per month is a huge thing! Even after investing 12L the maturity amount is just 26L.
BTW what app is this?

I deleted the post because I am not sure what it means really.

 

[Zangetsu]

Losses in Mfs are very rare. I was thinking 7-8% vs 12%. Mfs still better than PPF definitely Fds. FDs hover at 5-8. Indian inflation is average 7.

Not True. MF(s) are nothing but stocks options and are subject to market risks. Only difference is you don't have to worry about managing it.
In 2008 recession many people in India lost their 10~12 years of investment in Market Crash including MF.

 

[rockfella]

Not True. MF(s) are nothing but stocks options and are subject to market risks. Only difference is you don't have to worry about managing it.
In 2008 recession many people in India lost their 10~12 years of investment in Market Crash including MF.

2008 crash was big. 60% drop that recovered in 18/20 months. Let's say you have 1 lakh in MFs (not stocks) and it dropped to 40 L and you kept on investing more all the while it recovered .. won't your portfolio be + after 2 years?

 

[Zangetsu]

2008 crash was big. 60% drop that recovered in 18/20 months. Let's say you have 1 lakh in MFs (not stocks) and it dropped to 40 L and you kept on investing more all the while it recovered .. won't your portfolio be + after 2 years?

That's correct but don't say Loses are rare. Investors are gaining and losing money everyday. That's why they say Investments (Stocks, MF) are subject to market risks please read the offer document carefully.

Today if your MF portfolio is showing 20% returns tomorrow it could be 10%. Everything is a gamble here and luck.

 

[rockfella]

That's correct but don't say Loses are rare. Investors are gaining and losing money everyday. That's why they say Investments (Stocks, MF) are subject to market risks please read the offer document carefully.

Same person (who had 1 L invested) after crash had withdrawn all his MFs would have been at a 100% loss right?

 

[rockfella]

That's correct but don't say Loses are rare. Investors are gaining and losing money everyday. That's why they say Investments (Stocks, MF) are subject to market risks please read the offer document carefully.

Yes it is. 100% subject to market risks but more risky if investors don't use their head and go by their feelings : My point.
Lot of times we have no choice. When crashes happen and many loose jobs, in order to sustain life they either run out of their savings or have no savings or have to withdraw from MFs to survive. That is one thing we have no control on maybe. So all this we discuss here is diff than what happens with families who loose jobs/have less savings.

 

[Zangetsu]

Same person (who had 1 L invested) after crash had withdrawn all his MFs would have been at a 100% loss right?

It depends also upon the investor. Some wait for the market to stabilize and sell the stocks/MF.
I have friends who invest only with Goal price in Mind. For e.g they buy a shares for 100 per share and wait for it to become at least 110~130 and then when it reaches there they simply sell it to make Money. If in case it crashes down to 90 they wait and may change their target price.

 

[rockfella]

It depends also upon the investor. Some wait for the market to stabilize and sell the stocks/MF.
I have friends who invest only with Goal price in Mind. For e.g they buy a shares for 100 per share and wait for it to become at least 110~130 and then when it reaches there they simply sell it to make Money. If in case it crashes down to 90 they wait and may change their target price.

Depends on the stocks they buy too. Some think buying penny stocks is clever, then the stock never rises (as the company is shitty) and they loose money or hold it for a decade in hope.

 

[Zangetsu]

Yes it is. 100% subject to market risks but more risky if investors don't use their head and go by their feelings : My point.
Lot of times we have no choice. When crashes happen and many loose jobs, in order to sustain life they either run out of their savings or have no savings or have to withdraw from MFs to survive. That is one thing we have no control on maybe.

It would be foolish for anyone in this world to invest all their Savings entirely in MF(s) or Stocks. Even the Market Guru(s) don't spend their entire Savings in Market just for making higher profit due to GREED.
If you plan your Finances properly you won't have to worry about your future income. That is why have a Balance portfolio with mix of everything.

My Friend lost 15 lakh rupees in Stock market long time back and there are many Horror stories about people losing more.

 

[rockfella]

We really need to know this in details. Last year my whole portfolio was negative. I invested heavily and now it is +. If I had withdrawn everything the loss would have been beyond recovery.

 

[rockfella]

It would be foolish for anyone in this world to invest all their Savings entirely in MF(s) or Stocks. Even the Market Guru(s) don't spend their entire Savings in Market just for making higher profit due to GREED. If you plan your Finances properly you won't have to worry about your future income. That is why have a Balance portfolio with mix of everything.

Point

 

[Zangetsu]

We really need to know this in details. Last year my whole portfolio was negative. I invested heavily and now it is +. If I had withdrawn everything the loss would have been beyond recovery.

Your perspective and patience that would come into play. If you set a Goal for your investment(s) then you will always be in a good shape.

If you know about local Co-operative banks in your City they give more interest than Commercial Bank(s) on FD/RD which is around 9~12% and are Risky too bcoz they can Close their Shutter anytime and can run away with all the investors Money. But still people take risk and invest in them.

Higher Risk = Higher Reward.

 

[whitestar_999]

Today if your MF portfolio is showing 20% returns tomorrow it could be 10%. Everything is a gamble here and luck.

Not correct. You think hdfc, reliance, icici, kotak, axis, tcs, infosys etc are going to close down even in next 10-15 years? A good large cap MF invests in such companies only which are basically an indicator of a country's economy. If such companies start closing down then no hope from anything in that country's economy whether it is FD or PPF or land.

 

[Zangetsu]

I never talked about HDFC/Reliance will close down. And you are talking about the 3rd category of MF which is Large Cap Fund. Every investor knows about Small/Mid-Cap/Large-Cap funds and the proportion of Risk(s) involved with each and how they work.
No company will give guarantee to its investor that it will give X% of returns in X amount of time and also it does not take time for any Company(s) to Shut down its operations. E.g.: Bankruptcy/Company Scandal/False Balance Sheet are various events which bring down the money of investor down to ZERO.

 

[rockfella]

It would be foolish for anyone in this world to invest all their Savings entirely in MF(s) or Stocks. Even the Market Guru(s) don't spend their entire Savings in Market just for making higher profit due to GREED.
If you plan your Finances properly you won't have to worry about your future income. That is why have a Balance portfolio with mix of everything.

My Friend lost 15 lakh rupees in Stock market long time back and there are many Horror stories about people losing more.

Do you know of any stories people loosing money in MFs only?

 

[rockfella]

Not correct. You think hdfc, reliance, icici, kotak, axis, tcs, infosys etc are going to close down even in next 10-15 years? A good large cap MF invests in such companies only which are basically an indicator of a country's economy. If such companies start closing down then no hope from anything in that country's economy whether it is FD or PPF or land.

True. Last march ICICI FD rates were hovering at 3-4% IIRC.

 

[rockfella]

I never talked about HDFC/Reliance will close down. And you are talking about the 3rd category of MF which is Large Cap Fund. Every investor knows about Small/Mid-Cap/Large-Cap funds and the proportion of Risk(s) involved with each and how they work.
No company will give guarantee to its investor that it will give X% of returns in X amount of time and also it does not take time for any Company(s) to Shut down its operations. E.g.: Bankruptcy/Company Scandal/False Balance Sheet are various events which bring down the money of investor down to ZERO.

To avoid this most MFs invest in large mid and small caps to balance out these situations. Zero can only happen if you invest in crappy stocks and the company shuts down.

 

[rockfella]

Your perspective and patience that would come into play. If you set a Goal for your investment(s) then you will always be in a good shape.

If you know about local Co-operative banks in your City they give more interest than Commercial Bank(s) on FD/RD which is around 9~12% and are Risky too bcoz they can Close their Shutter anytime and can run away with all the investors Money. But still people take risk and invest in them.

Higher Risk = Higher Reward.

This high risk is foolish imho. I would rather do PPF or increase my VPF instead of trusting these shutter down prone banks.

 

[Zangetsu]

Do you know of any stories people loosing money in MFs only?

Not particular one but MF(s) are not full proof. They rely of Stocks or other Bonds and show the up/down as per market. I took only 2 MF(s) last year and it was showing +growth of 32~34k profit and today its showing 28k