Who Stops You From Best Returns?
Investing in Equity Mutual Funds is known to many, everyone wants to generate the best returns out of it. But ask yourself and the people around you, have they got the best returns?
Say, Best Fund gave 23% returns in 5 years, did you have all your investments in that fund? Obviously No! You don’t!
Why? Why You Didn’t Get Best Returns? Who Stops You From Best Returns?
YOU! Yes, You Stop Yourself from Best Returns, How?
- You Time the Market.
- You Try To Enter into the next performing Sector or Fund.
- You Make Frequent Entry / Exits Based on Market Levels.
- You Can’t Control Your Emotions
- You Want to Diversify More.
These are the reasons why You Stop yourself from Best Returns.
In your struggle to be in the best performing fund you end up having many underperforming funds too which dragged your overall portfolio performance to below average rather than being in the best performing fund.
On the first hand, You don’t need to time the market because 1 or 2 years returns don’t matter if your goal is 12 years down the line.
If you need money in 2032 then why bother how the market is performing right now? Either don’t time the market or follow a proper asset allocation strategy with the help of a distributor or advisor.
Secondly, If you are looking for or in search of the next performing sector or fund then you are a victim of FOMO – Fear of Missing Out!
Yes, it’s better to follow a proper diversified allocation strategy that will give you better than average returns if not the best – Because in search of the best returns you end up getting worst than average returns.
Compounding at 10% for the next 10 years is far better than compounding at 20% for only 3 years and then not able to find such an opportunity again.
This hustle of not missing the best returns and in satisfaction of booking profits would lead you nowhere if your goals are still 5 or 10 years away. These frequent exits and entries will go in vain.
So, in nutshell to overcome all these reasons you have to follow a proper diversification and asset allocation strategy that can take care of all these things.
Because compounding your money at 10-12% for the next 10-15 years is more important for achieving your financial goals, not short term extraordinary gains.
So, Stay Focused Stay Invested – Avoid Emotional Traps!
If you are interested to invest in Mutual Funds with a proper asset allocation strategy through a professional distributor then you can Click here to schedule your One-on-One Meeting with ME!
Hi, I’m Managing Director at Gurpreet Saluja Financial Services where I help my investors to invest in mutual funds and achieve their financial goals. I’m also a Value Investor and here I write about Personal Finance & Investing.