The market movements over the year 2018 have left many an investor in dilemma. The portfolio shows lower or slightly positive returns. Some are facing loss of capital too. The question is – did I make the right decisions?
Samar started investing via SIP in Jan 2017. Of course, he picked the best performing funds, eagerly sold by media, the MF salesmen as well as friends.
He is now staring at a negative return in the portfolio. The question he is asking around is whether he should change his fund schemes?
Shankar, another retired investor chose the dividend option of the largest hybrid fund along with other “Monthly Income Plans”, which sadly are no more called so. The performance has dwindled, the monthly income, it turns out, is not really monthly. It is dependent on the whims of the fund house. What should he do now?
The Dividend Chase has claimed many investors.
Then there is Himesh, who is not shy of accepting that several of his direct stock investments were a result of tips received In a rising market, throwing caution to the winds is not an anomaly. He did so too.
His question now is how to set the portfolio right?
Well, one thing has been proven time and again. Old habits die hard. Everyone needs a shortcut. Fear and greed will continue to rule our decisions.
But I am not a pessimist. I hold hope and I work to help investors to become better with their money decisions.
So, here’s one more. If you find yourself questioning your investment decisions, you need to sit back and think, what would you have done different and why?
Go back to the fundamentals of financial planning and investing and think what drove your past decisions. Do the reasons still hold?
What additionally would you make consideration for or what would you let go?
After this deliberation, will you still have the same portfolio?
Do not miss out on this learning opportunity. It will help you strengthen your investing framework and add conviction your decisions.
This can also make a difference of a few percentage points in your returns on the investment and a lot more difference to the quality of your life. I call it sleeping better.
And now the most important part. Share your learnings and findings in the comments to this post. Let us how have you become wiser. Just writing it down and sharing it with fellow investors will take you to level 2 of your thinking process.
If you find it difficult to do that, I suggest you start again with Investing 101 course. It’s costs no money, just some of your time.
I moved some of my investments from midcap fund to the largest smallcap fund in jan, this investment is still in red. Wanted to become little more aggressive investor at wrong time, I mean when mid/small cap valuations are at peak. I could have avoided this. With this I learnt concept of reversion to mean in a hard way. I will stay invested for 7 years or more, I am sure returns won’t be so great, neither largecap is cheap today. It may be smallcap index hugging returns. No additional investment in this fund
That’s quite a confession and I am sure the learning is in place. Thanks Girish for sharing.
I also learned it hard way by investing most of my ELSS portion for last 2 financial years in Reliance Tax Saver which is down by more than 20 percent since January 15 2018 though indices are up. This is undoubtedly best performing fund for 10 years and given maximum return within category and beyond but i learned that personally i can’t allow that much of variation from the broader market. So apart from risk categorization, portfolio variance is also important.
Well, this market vs my portfolio evaluation is going too far with investors. The specific structure and style of the fund matters. IN your case, the fund has more of midcaps in the portfolio and hence the result.
Evaluate if this is the kind of fund you want to have in your portfolio.
Thanks for reading.