Mutual Funds: How Risky Are They

ISHAN TOPRE

ISHAN TOPRE

@ishan-nohePN • Oct 11, 2024
We hear a lot of things about share trading. People sometimes always complain they lost a lot of money. Nothing is logical in share market. Of course there are people who claim to make profit.

My question is about Mutual funds. I have heard people saying that the easiest way to invest in mutual fund is to buy SIP and stay invested for long run (~30 years). It yields better results than traditional bank deposits, gold investments etc.

But what is the guarantee that mutual funds will definitely perform better? In fact, as far as I have studied, they are mostly loss making.

Then the defenders of mutual funds say that ok- while you are young, and have high risk appetite, invest more in equity and also take the help of debt assets. As you grow old keep on increasing investment in debt asset class.

My question to them is, I am investing in equity to grow my money, If I wanted to invest in debt, Why would I come to you? I will go to a nationalised bank and open Fixed Deposit.

In my opinion, the concept of share market for *common* investors is highly flawed and susceptible to fraud. (You see, even after watch dogs like SEBI, Enforcement Directorate, there are scams like NSEL, Sahara, Satyam )

What do you feel about it?
Like 0 Replies 6

Replies

Welcome, guest

Join CrazyEngineers to reply, ask questions, and participate in conversations.

Sign up Log in

CrazyEngineers powered by Jatra Community Platform

  • Kaustubh Katdare

    Kaustubh Katdare

    @thebigk • Jul 2, 2014

    Surprising to see there aren't any takers for this discussion. I've seen MFs being one of the most popular instruments for the engineers at least in India. #-Link-Snipped-# - thank you for starting this discussion. Let's hope to have independent views from fellow CEans. I'll try to get an expert to answer the question for us.
    0
  • Rajni Jain

    Rajni Jain

    @rajni-E46Rlm • Jul 2, 2014

    Investing in a mutual fund is as good as investing in market for shares. The only difference is Your money will be managed by a fund manager who uses money contributed by investors to assemble a portfolio of assets based on the specified investment strategy.So element of risk will always be there in the MF's as well, though it will be lesser then Equity market and more then savings and FD's instruments.

    As the fund managers are smart chaps, there are high chances that the investment would be done through keen strategies ad would earn you some profit. Hence, per my limited knowledge I would say MF's are comparatively less riskier; At the same time, I must say that if something will go horridly wrong, theoretically your account balance (invested in MF's) can touch the zero mark as well, though the chances are less!

    Again it depends you are dealing with which type of MF's, Equity Oriented Mutual Funds are as risky as Equity shares but at the same time, they provide nice returns too. However, for the newbies who are just learning the art of investment, I would suggest that SIP based MF's are good to start. In those, chances of getting the benefit of Market is more, as when market moves up Fund's NAV will increase and when market will go down you will be getting more units.
    0
  • Bashiruddin Naik

    Bashiruddin Naik

    @bashiruddin-N9oNBe • Jul 3, 2014

    My father lost money, my uncle did, as my Father-in-Law also lost. Not much but about 20-30% of what they are invested. They are little bit risky. You may not loose your whole ***.

    Mutual Funds are diversified investment. We need to be very picky about it.
    Selecting by hype or Ads will definitely lead to unnecessary misery(Say Problem).

    Before buying please check the past performance as i always do in Horse Racing. Do not expect a parlay. If you are in needy & greedy maneuver!.

    Everything you invest is systematic gambling. If you invest in safer mode your return will be peanuts, or Have balls you will be rewarded. Only if your have deep pockets and willing to loose and ready to beg.

    That's it folks, I can write 100 Pages about investing. Right now I'm going to sleep.

    P.S: Sorry for Bad English!.
    0
  • Kaustubh Katdare

    Kaustubh Katdare

    @thebigk • Jul 3, 2014

    The only wise form of investment in my opinion is investing in a flat or plot which you can rent out. If you are living in it then its a liability. I have been away from MFs and don't regret it. I am okay with earning lesser interest on money I saved and having access to it at my will than locking it for specific period of time to get a few more % as interest. But that's me. If not real estate, I think FDs are way better than other forms of investment.

    Of course for tax benefits you may consider other forms of investments.
    0
  • Bashiruddin Naik

    Bashiruddin Naik

    @bashiruddin-N9oNBe • Jul 3, 2014

    #-Link-Snipped-#

    Good morning all!

    Certainly FDs are way better than Mutual Funds. Its all matter of risk appetite you got. Also FD & MF are not for all.! Only prudent can make his chart YoY sexy.
    Real Estate😒 in Bangalore😲 You can't afford it. Even if you are earning in 100K/Month. My uncle bought a house on around 2011 he still paying EMIs that is around 40L. Who want this misery!

    I generally love to gamble on Day Trading rather than stashing my money in MFs.
    0
  • Ankita Katdare

    Ankita Katdare

    @abrakadabra • Jul 3, 2014

    This discussion has become very informative for me. 😀 Thanks for the replies everyone. Will keep an eye on this one, keep educating us.
    0