The year 2021 has seen over 100 New Fund Offers or NFOs we still have about a month to finish the calendar.
Active, Smart Beta, Index, Global, REITs, Balance Advantage, Bonds, Metals – you name it and there has been a few funds from each category coming out to ask for your money.
The marketing presentations convey that this is the best and the only opportunity. Until the next one.
Now, several of these NFOs do seem to present a unique opportunity and I wonder what if I invested in some of them.
Say, I was to give them space in the portfolio, I would land up with at least 20 schemes (assuming not more than 5% allocation to each).
The thought itself scares me.
I cannot manage and track so many ‘already diversified’ investments in one portfolio.
In fact, I am afraid I might just end up no different than the overall market.
So, why bother?
To answer the question on “How did I deal with the NFO rush?” Well, I ignored them.
And that brings me to the simple hack I use to deal with new investment options.
“When it comes to investing money, learn to say NO more than YES.”
My portfolio does not have a single NFO. I don’t go looking for fancy new strategies. The case for a YES to any new investment will have to be very strong.
This might not be a surprise to you but past returns play a limited role in the decision.
Read more: How not to select mutual funds?
The focus is on investing consistently and let compounding play a bigger role than chasing investment fads.
Hopefully, I stay that way.
What about you? How many NFOs made their way into your portfolio?
Question: Let’s kickstart the year 2022 with something useful. Would you be interested in an online interactive session in Dec 2021 on “How to build your own comprehensive financial plan for 2022“? Hit reply and let me know.
“When it comes to investing money, learn to say NO more than YES” this was something I was looking for on the internet for a long time. Like it is explained in your blog that escaping or ignoring the NFO rush is one of the most difficult things for investors but at the end of the day, most of them fall prey to these NFOs. They try to convince the investors that this is the best and the only opportunity to earn high returns. Just like yours, even my portfolio does not include any NFOs. I usually prefer to take time to think before investing and adding an asset to my portfolio as mentioned in your blog.