smaller the MF, higher will be such % but bigger MFs have different problem
Managing long term portfolio
With very little efforts you can beat any mutual fund while being buy only long term investors,
First, why many mutual funds underperform the index on a long term average
1. they have to keep cash for redemptions, which gives little returns
+
smaller the MF, higher will be such % but bigger MFs have different problem
So literally they are forced to sell their long term holdings because of short term market shake outs
so many fund managers indulge into things like front running, stakes are so so high, its tempting without stringent punishment
So any mutual fund beating the index in India inspite of all the above is a miracle
1. MFs are well diversified into 30-50 stocks, on an average holding 1-2% of fund value in a single stock,
2. stick to theme, early on decide, if u want to follow momentum or value or coffee can and stick to that
for example i am greatly influenced by Saurabh Mukherjea's books and style of investment and i follow that so never bought any adani or momentum stock, so at the onset i signed up for lower less risky
3. In the word of finance, no matter how busy u are, u cant trust anyone blindly, for that matter in life, u cant trust anyone blindly
so try to be DIY investor, it just requires 1-2 years , 4-5 hrs each weekend to be reasonably good at stock picking,
Without fucking u, he will not have his baby, so he has to keep trying that
its easy to get confused between in trading, investing and gambling,
unless we write down rules for each, its all bound to get messed up
remember that will be just your shortlist, these are the stocks which have passed sanity test
even if 20% of your picks become multi-bagger in next 10 years., u will beat best mutual fund
Operationally keep long term PF in separate demat, dont pledge it, dont leverage it, as its long term, for your retirement may be,
this might lower your returns a bit, but greatest threat to your networth is YOU,
if its in separate demat and you are not logging in everyday, u will be less tempted to churn it, try it once
Also, I believe, from risk point of view, you should never plege family silver, money u cant afford to lose
who knows what the new never heard of scam will
let me know if you liked my thoughts, i will do a spaces on it to clear any doubts if u have
I want to thank @Traderknight007 who encourages me to write more and i wish i am able to write threads like him
but "I try"
