Hello Friends,
I was listening to one of leading mutual fund managers last week and couldn't help myself laughing at his comments and worse he was on the panel to advise the investors how to invest in the stock markets, and I thought of sharing my views on this interesting scenario of falling markets and rising number of experts....
Lots of leading mutual funds raised money around December-January period this year. All of their prospectus and ads talked about how well the Indian economy is doing and there is a huge potential for growth. They claimed that all the investors should provide their money to "experts" who know it better where to invest it. And also the investors were encouraged to put this money through SIP(Sytematic Investment Plan) which means that an Investor shouldn't try to "time" the market but invest systematically to get better returns. All this was happenning when the Sensex was hovering around 21000 mark. So far so good...
Come June 2008.... Market crashed from January highs to around 15000 odd level. Mutual funds are sitting on a whopping amount of cash of approximately 20,000 crore and are not investing this money in the market. Their explanation is that market is now "Overvalued" and "Overheated". It is not safe investing the money now because share prices might further fall and then they will invest. Can you imagine the same "experts" who were singing growth stories when Sensex was at 21000 are now afraid to invest as suddenly market is overvalued at 15000!!
They advised the investors to go for SIPs because it isn't prudent to time the market and now they are refusing to invest in the good stocks at such low valuations because they think market might fall more and they will "time" it better by investing at that time.
Well one can only draw two conclusions out of the whole situation...
1. Either these so called "experts" are a bunch of fools whose judgements and statements change by the way market swings.
2. or they know the real situation(that the markets were overvalued at 21000+) and made fool of the investors by luring them with false claims.
I can only say that in either of the cases, it is the common investor whose hard earned money they are playing with. The market might have fallen but these experts have made good money for themselves. So next time you see an ad of mutual fund scheme, don't just blindly trust it because there's lot more than what meets the eyes!!
Happy Investing...
I was listening to one of leading mutual fund managers last week and couldn't help myself laughing at his comments and worse he was on the panel to advise the investors how to invest in the stock markets, and I thought of sharing my views on this interesting scenario of falling markets and rising number of experts....
Lots of leading mutual funds raised money around December-January period this year. All of their prospectus and ads talked about how well the Indian economy is doing and there is a huge potential for growth. They claimed that all the investors should provide their money to "experts" who know it better where to invest it. And also the investors were encouraged to put this money through SIP(Sytematic Investment Plan) which means that an Investor shouldn't try to "time" the market but invest systematically to get better returns. All this was happenning when the Sensex was hovering around 21000 mark. So far so good...
Come June 2008.... Market crashed from January highs to around 15000 odd level. Mutual funds are sitting on a whopping amount of cash of approximately 20,000 crore and are not investing this money in the market. Their explanation is that market is now "Overvalued" and "Overheated". It is not safe investing the money now because share prices might further fall and then they will invest. Can you imagine the same "experts" who were singing growth stories when Sensex was at 21000 are now afraid to invest as suddenly market is overvalued at 15000!!
They advised the investors to go for SIPs because it isn't prudent to time the market and now they are refusing to invest in the good stocks at such low valuations because they think market might fall more and they will "time" it better by investing at that time.
Well one can only draw two conclusions out of the whole situation...
1. Either these so called "experts" are a bunch of fools whose judgements and statements change by the way market swings.
2. or they know the real situation(that the markets were overvalued at 21000+) and made fool of the investors by luring them with false claims.
I can only say that in either of the cases, it is the common investor whose hard earned money they are playing with. The market might have fallen but these experts have made good money for themselves. So next time you see an ad of mutual fund scheme, don't just blindly trust it because there's lot more than what meets the eyes!!
Happy Investing...
1 comment:
Very nice attempt for the 1st blog dear...u have penned down ur thoughts well n shown the real picture about mutual funds to us...hope ppl will get more careful while investing now...i sure will!!!!!
All the best...keep posting!!!!!!!!:)
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