Are you constantly chasing best performing funds? It’s time for a rethink
Live MintVery often, investors choose a fund based on somebody’s recommendation but later find that it doesn’t live up to their expectations and wonder if they should exit it. Your adviser recommends you to invest approximately ₹10,000 per month in a few funds for 10 years which may help build this corpus, assuming a return of 10%. If you choose funds that have delivered double-digit returns in the recent past and invest in them, it is very likely that the very funds may give you low returns or negative returns. If you are investing in products that you like and those funds deliver negative returns in the first couple of years, you will never be able to get back to that 10% compound annual growth rate, or CAGR, for 10 years that you require to get to your goal. Sometimes, it’s human tendency to tinker with our investments just like we may want to replace our car or bike but the best approach is not to tinker with your portfolio once you have selected appropriate funds that are good enough to give you the return range you seek.
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