Everyone’s time is precious. I will also give you the reason why we have not answered those questions. Why didn’t some questions come like this? My age is 30 years. I have ₹ 1000000 per month to invest, tell me the fund. tell this to someone specifically to that person that you should invest in this fund,
- Blog of FAQs of Mutual Funds 2024 is now available, so today I will try to answer some of your common queries. A lot of them were being asked. Some queries which we cater to. If you are not able to do that then I will first tell you what kind of questions will not be found so that if you are looking for the answer then I do not want to waste your time.
- Personally give such personal advice, all these Registered investment advisors can do that we are Finology, but before giving advice, we have to do KYC. we have to do risk profiling and there are many legal processes, A signature on an agreement is required. So giving such personalized advice is against compliance. Therefore, such specific fund recommendations as to which fund is best for you as per your earning goals are not something we can do without you being on board with us and hence we are not able to answer those queries.
Secondly, many times such queries have come up. When it is asked about a specific fund. how is this fund, how is that fund, now analyzing each fund and collecting all those questions and reviewing each fund was not possible in the Article, so one fund I have avoided reviewing in this article. I have tried to take most of the questions in such a way that many people can get the solution from one answer, so let's start now. Do you bring the list of mutual funds every year?
The first question is do you bring the list of mutual funds every year? If we had invested in a mutual fund 3 years ago after looking at it from your list and this year that fund is not on that list then we have to exit that fund and shift to a new fund or we can continue with that fund now.
Look, for the last two or three years, we have kept in mind that we should be as consistent as possible and we have avoided too much churning. This year we have kept almost the same list, not only because we have to be consistent but also based on merit. Even those funds used to stand till 3 years ago, there were a lot of changes coming in this industry, regulations were changing, and reclassification was happening. so it became a compulsion to make changes. There has been no such special need in the last 2 years, but still. If you have earlier funds, then do not sell them just because they are not on the list this year. Look, every year when the list comes, we try to balance between old investors and also new investors. We have to maintain the balance for many years.
What is the best starting point for those who are starting to invest this year?
What should we tell those who are investing with us and what is the best starting point for those who are starting to invest this year?
We have to maintain a balance. While bringing the list of every year. if we find any particular fund very bad then I will come. There is no on YouTube if we do not like that category, then if we do not like any fund of that category, then you have to make the decision accordingly. But this year I have said many times in the blogs that it matches our choice perfectly – A similar fund was also a second-numbered third fund but for the sake of consistency. we continued to go with the same funds. Look at Lam Sum and SIPin such a rising market. when the market is at an all-time high, it is not bringing new heights every day. Now this is about today’s time, right now, I am making this blog around 20th January, so I am talking about today, the market ruffling is around its all-time high, in such a situation, I will put a lot of money in it, I will feel scared, I am like this If I don’t do it, then in the current scenario, I stick to SI Peas Market, we don’t have to time the money, so we have to withdraw the money, itis not like that, but in one scenario, if you are near retirement or are a retired person and your money will be cash flow in future. If you are not going to get new money, then you are not going to have new money to average, you have invested your earnings, and in such a case, you can get a little out of it in this high market, but if you are young, you will spend your entire life. If you want to earn money now then do not go out of the market. Even if the market has fallen, you will get fresh cash. Investing it at lower levels will average it out. If you are a senior citizen, you can withdraw.
Why funds is charging more fees?
Another question was how we eliminate funds with a high expense ratio. Why are they doing this the returns are adjusted for the fees and returns are obtained minus the fees, so if a fund is charging more fees but is giving even higher returns than that, then what is the problem?
The problem is that this During the year he justified his high fee but if the fee of any fundis at 2 then that fund starts at -2 every year as compared to an index fund because if you had invested money in an index fund then he would have charged 10 paise or 20 paise. Invested money in an active fund which charges a fee of Rs. 2, your ₹1 became 98 today, it became 98today, now from 998 that fund has to outperform the index fund in which you have invested your ₹1, and it becomes difficult for many. Sometimes it may not happen, but high-fee funds are always at a disadvantage, hence we eliminate it. Another question is that by changing the fund, there will be a compounding effect, so we will never change the fund. See the compounding effect of changing the fund. There is no compounding effect of withdrawing money from the market. You invested ₹ 1in one fund and next year it becomes ₹ 10. Now you keep ₹ 10 in that fund or you withdraw that ₹ 10 and invest it in some other fund. Compounding will continue. Compounding happens on money. Otherwise, your fund. Your money should remain invested in a good fund and compounding will continue. We see the difference because if you withdraw 120% of 100% from the first fund and put it in the second fund. When you invested ₹ 1 in the first fund, you saw a profit of ₹ 20. Withdraw it and put it in the second fund, now your capital becomes ₹ 120, then profit and loss will be seen at ₹ 10, hence we think that our returns have become zero but it is so. Otherwise, compounding is done by keeping the money invested in the market in a compounding fund. Compounding will happen from the same fund. If you shift it, the compounding will stop. This was wrong. It was an interesting question. If we need money after 5 years, the market is doing well today. But then what will I do if the market falls, I am stuck, how will the market be at that time and if I need it then see, whatever money I need in 2 years or 3 years, slowly start shifting it towards FD. The money you need after 5 years or 10 years, leave it in the market because, after 5 years or 10 years, the market level will also be very high, from there will be a correction of 10-20, even then your compounding will not make much difference from today’s level. You will not have to see, friend, that you invested a fund with a NAV of 100, let’s say after 20 years it is at a NAV of 500, now from NAV of 500 if there is a correction at 10 and it also becomes 450, your overall returns which were five times. Your capital has increased by 4 times, there has been a huge difference in your profit, this is not going to happen, so you don’t have to worry too much about distant returns.
Why is there no focus on higher returns?
Another interesting question was why safety is the focus when we invest in large-cap funds. Let’s take it, why is there no focus on higher returns? Large-cap investors also want high returns, so why are we not giving value to that good performance?
Look, this may be so, but generally, the large-cap category has been created so that For the one who is looking for some safety in equity, because for the one who is looking for performance and the highest returns, there are many categories, there are small cap, mid cap, flexi cap, multi-cap, sector funds, we do not say but there are categories. Neither do I think so or our team believe that whoever is investing money in large caps is giving more value to the safety of that money. There is no value in performance. It is not so at all but because it is 100% These are the same companies, every fund takes 30-40 companies, so it is very difficult to bring performance in them. Firstly, safety is the priority and it is very difficult to improve performance, that is why we prefer to leave this race. If you want average market returns in low-index funds. Invest money. A request is coming that how much money has to be invested in which fund, tell the percentage and its allocation. Again, this is a problem that without doing your risk profiling, it is different for every user, so it is difficult to do this without risk profiling, but How this is done how can you decide for yourself DIY asset allocation how much money should I invest in which fund I will publish a blog on this how many funds should there be A minimum of two maximum five in between An ideal portfolio is three-four funds which you feel comfortable with. So three funds or four funds are enough. It is a lot of complexity. You can take two funds or even two but three-four funds are fine. I have also seen such portfolios. Where there were 50-60 mutual funds, they had bought the entire market two or four times, so it was like I have bought the entire market, I have bought all the shares in the market and I am also paying a fee of Rs 2, so my Returns are going to be on market -2, so don’t do that. The above five funds are going to be needed in most of the cases.
If the market crashes by 10, then what will be the lump sum?
No, there is a question if the market crashes by 10, then what will be the lump sum? Then it will be better to invest.
Now see, it is better from today. The cheaper the market, the better it is, it is not very important and you can spread it out, then in most cases, you should do SIP only, but even if you are getting a small amount of money, then do not invest it in a month, get it made in FD, keep it in a liquid fund and Every month, divide it into six months, divide it into eight months and put it through SIP. This is more sensible in most of the cases. So, I hope most of your common queries have been answered and now the release date of Phenology 30 is getting closer.
Where our team is working hard day and night to shortlist the list of 30 stocks for you. Finology 30 is going to be launched next month. To get the offer of the discounted price, you can pre-register for it. The link to the form is in the description of the blog.Is Arpit Sachan Signing Off ByeBye