welcome to yet another episode of your life your money you would have seen mutual fund sahi campaign a great campaign a great information about the Mutual Fund mutual funds as such are great investment tools but a set of people shouldn't be investing into the mutual fund to invest in mutual fund you should qualify for certain criteria in this episode I'm going to talk to you about which set of people should not be investing in mutual fund stay till the end of the video I have listed about 13 category of people who shouldn't be investing into
the mutual fund check if you are the one if you are the one then either you have to correct yourself or you shouldn't be investing in the mutual fund this is NRA money clinic for you and I'm Dr Chandra B your financial guide for a happy [Music] living NRI money Clinic no hype just the right advice number one if you're a person who is wanting more than 20% of return cagr year after year for a longer period of time you shouldn't be investing into the mutual fund why I see in my mutual fund a return
of more than 20% I see mutual fund schemes which have given me 30 35 40% rate of return then how do I say that you should not be investing into the mutual fund the argument is very simple what happened post pandemic is oneof event markets went through the Pik up that's because people saved a lot of money governments in us used a lot of liquidity as a result Market went through the roof but this is not the story of every day every year there is a Formula by which you can figure out how much of
returns you can make from the Mutual Fund mutual funds generally give you a rate of return which is equal to the nominal GDP figure of any country for example in case of India India is growing at about 7% plus or minus half a%c here and there then you add the inflation that gives you the nominal growth in the GDP if the GDP GP is growing at 7% real terms add inflation which is about 5% 7 + 5 it gives you 12% so you can add another 10% uh on the upside that's because GDP includes Services
manufacturing and agriculture agriculture doesn't grow at such a rate whereas services and Manufacturing grows at a faster Pace therefore to expect something between 12 to 14% as a long-term average based on the data points what we see today is reasonable if your expectation is more than this either you should temper your expectation on the downside or be prepared for that kind of a return now don't look at the past track record and say I got it and extrapolated to Future years thinking that you will get so much of a return you will be up for
root shock in the years to come so if your expectation is more than 20% you shouldn't be investing in the mutual fund number two if you are expecting quick returns you want to make quick money out of mutual fund then you shouldn't be investing in Mutual Fund mutual funds are great investment tools they make a lot of money for for you in the long run but to expect mutual funds to perform immediately after you invest is asking too much sometimes markets do not clim up at all they may remain stagnant for years together I've seen
markets not doing anything for 10 long years not in some foreign country but even in India also 3 years 5 years of non-performance is perfectly normal in the marketplace so if you're a person who is looking to make quick returns by investing in mutual fund you shouldn't be investing in mutual funds number three you are a person who do not have a belief in the evolution system evolution is something slowly changing sustain changing over longer period of time that is evolution evolution is something which is natural which is sustainable and which will last long if
you do not believe in evolution and you are a person who believes in Revolution mutual funds are not for you what are mutual funds they invest into the stocks or bonds or anything like that how does the mutual funds grow in value it's because of the underlying growth in the economy when the companies grow when their Top Line grows when their profitability grows when the earning per share increases that is the time they gain value and their price will increase in the short term their prices will become very volatile because of the liquidity a lot
of money chasing the stock or liquidity drying up that means you have valuation but there is no liquidity they will not give you the value all these things will happen but in the long run the mutual funds make you money only because of growth which is happening in the economy and that cannot happen like a 2 minutes noodle it takes time so show me one company which grows at that terrific speed it takes time they have to recruit people they have to come up with the ideas they have to develop products in the R&D it
should be marketed so it takes time it takes decades together time so unless you have a belief in an evolution system and you give the required amount of time mutual fund may not meet your requirement so mutual fund is not for a person who does not believe the theory of evolution number four you have no goals in life if you have no goals in life then mutual funds are not for you mutual funds are excellent investment vehicles to reach your life goals your life goals are something like retirement Corpus building children's education funding wealth building
or building a corpus to buy that car vacation whatever it is which requires 10 15 20 30 years or the long term so the longer the time Horizon that you have to reach your life goal mutual fund serve you the best if you say I have no life goals I'm investing this money today I will take this money 6 months down the line one year down the line 2 years down the line I would say better do not invest in mutual funds number five I am a person who decides should I invest in mutual funds
based on what news I get to see on the television or what I read in the newspaper articles if you're a person who is investing money in mutual fund because of the news that you see you shouldn't be investing into the Mutual Fund mutual funds have nothing to do with the news news can create operations they may give you Sensational news telling that this fund has given a lot of returns over a shorter period of time that may create an emotion of greed in you and you come back and after you invest into this the
prices may fall off so if you're a person who is investing in mutual fund only based on the news that you come across then you shouldn't be investing in mutual funds number six if you're a person who is investing in mutual funds looking at the Google ranking of different funds then you shouldn't be investing in mutual funds does it mean to say the Google rankings are wrong the answer is no Google rankings will do the Excel shet about these funds and it will calculate how much of return it has given but that is a rare
view mirror that is a measurement of what happened in the past your interest is not what happened in the past what is going to happen in the future that Google will not decide it for you and many times the numbers that come on the Google or any app or any channel for that matter a lot of information for example now look at the situation now before pandemic the sensex was at about 40,000 level and it dropped to 26,000 now from 26,000 in 2020 to 86,000 which it peaked in 2024 it moved up a lot now
you calculate the return based on the four years What markets gave and extrapolate it into the future or adjust this return to the backward 10 years it completely misses the point so if you see a particular reading on the Google or any ranking app then you have to ask this question is it that the fund is giving me year on year is it that the spike which pushed up the prices has created this kind of an operation you should have a mind to introspect and check why these readings are coming if something is growing at
20% 25% ask yourself a simple question how much could be its value 10 years from now does it look practical if it looks practical all that you have to do is go back 10 years 15 years 20 years and find out where was the valuation suddenly you will realize if you calculate it backwards no it will not correctly add up then it will tell you the story could be something different therefore if you're a person who is investing looking at the Google ranking what it gave in the recent past the mutual funds are not for
you number seven I a person who wants to invest in equity only that is why I'm investing in mutual fund if you want to invest in equity only there are better ways of investing in the stock markets you can buy uh directly the stocks you can get into PMS you can get into a set of aifs you can get into ETFs there are better methods than to invest in the mutual funds itself mutual funds are great investment tools when you have to put proper asset allocation you want to control your exposure to large mid and
small cap you want to invest a portion of your money into Commodities you want to put a portion of your money into the debt instrument you want to maintain a conservative bucket you want to maintain a hybrid bucket so you want to design your portfolios in a scientific way that is where the mutual funds come very handy when we say Mutual Fund mutual fund obviously has expense ratios but if you want to do only Equity I want to do stocks I don't want to pay that 1% 1 and a half% as an expense ratio you
are better off buying the stock directly than investing into the mutual fund but for over 90% I would say more than 95% of the people mutual fund is a better medium investment than direct stocks itself so think about it what is that you want to achieve if your idea is only I want to put in equity I should get highest return I should have a multibagger then mutual funds are not for you number eight I have my life goals but I don't have time to achieve the life if you are 58 59 and your life
goal is retirement building is your life goal you left with one year or 2 years if you do not have time in such a case you shouldn't be going and investing into the mutual fund let's say your children are going to college at 17 years and they are already 16 years they are in 10th or 11th standard in a year time you need that money to pay for the education fees of these children or the expenses that come with it then you shouldn't be investing into the mutual fund you should invest in mutual funds only
when you have more than 3 to 7 years period of time longer the time the better the minimum period which is about 3 years ideally I would say a 7 years plus time Horizon is the best time that you can make money into in the stock market therefore if you don't have time to reach your life goals then mutual funds are not the best vehicles for you number nine I'm investing into the mutual fund because my friends are investing into the mutual fund why if your friends are investing in mutual fund that's not a reason
for you to invest in mutual fund your friends could be very knowledgeable your friends could have done research around it friends could have time to reach their life goals their ideas about mutual fund could be different do not invest in mutual fund because your friends are investing into it rather get inspired from your friends find out why they have invested in mutual fund what is the purpose behind it how do they do it or take the professional assistance and understand the pros and cons of investing into the mutual fund when it works when it doesn't
work how much to put the money how to build the portfolios when you form an opinion around that that is the time you should be investing into the mutual fund just because your friends have invested in mutual fund that doesn't mean that you should be investing into the mutual fund by the way I'm a mutual fund distributor I have been in this line for decades together if you have an intention to invest in mutual fund in a scientific way build the portfolios make sure that you reach your life goals without taking undue risk around it
N Money Clinic can help you our services are available for you to invest through the mutual funds in India if you have an intention to invest in Indian mutual fund all that it takes is we have given our number in the description box we have also provided a link over there click on the link send us an exploratory message our team of experts from NRI money Clinic are ever ready to help you design proper mutual fund portfolios to create those scientific well-designed portfolios which can help you reach your life goal why do you delay send
that message right now number 10 I will invest in mutual funds only if there is an nfo nfo stands for new fund offer often the manufacturers of these fund come to you at regular intervals of time and say I have this new fund this will invest in this particular theme this particular country or it does this and the it is the best opportunity for you to latch onto the scheme because it's available at a nav which is at par and you get attracted to it there is no attraction to subscribing for any nfo if you're
a person who is investing in mutual fund only because of an nfo you shouldn't be investing in the mutual funds at all I'll tell you a story or I'll tell you my own life experience I have been in this line for decades together and in my entire career period of time probably I would have told people to invest in two or three nfos till now otherwise in our practice we don't take nfo Serious at all why because nfo is old wine in new bottle The Regulators have done a commendable job to reduce the number of
schemes that are available for the invest in spite of that the manufacturers will somehow find a reason to float nfos nfos are great asset Gathering tool for these manufacturer so when the nfo comes people get attracted to it they open their Pur and they put in a lot of money into the mutual fund other than this purpose it doesn't serve any other purpose there are plenty of schemes which are proven in the marketplace which are capturing every possible uh opportunity that is there in the market and you can do it there is absolutely no need
for you to latch on to any nfo you may ask me a question the existing na are 100 200 150 whatever it is whereas I'm getting something at 10 Rupees is there a merit in it the answer is no we have done a specific video on our Channel there is no merit on subscribing to an nfo just because it's na is 10 let's say that you are going to invest 1,000 rup and if this nav is 10 rupes you will get 100 units let's on the other side look at I'm going to invest in a
scheme whose nav is 100 rupees and if you invest the 1,000 rupees there you will get 10 units of the fund with a 100 rupe Nav Now Let's imagine the market when it moves up what happens let's say that the market moves up by 10% at 10 rupe na moves up to 11 rupees 100 rup nav moves up to 110 so multiply 110 into 10 it gives 1,100 you multiply 11 into 100 units what you got at the time of investment it again gives you the same figure of 1,100 so the market moves by percentage
terms the nav of a fund has nothing to do with its attraction it is a marketing gimmi and you will fall you will fall flat to this particular marketing idea so if you are a person who is investing because there is an NF on you shouldn't be investing in mutual funds at all Point number 11 if if you're a person who equates volatility to loss then you shouldn't be investing into the mutual funds A volatility is up and down movements in the price today it is X tomorrow it is X+ after tomorrow it is going
to be x minus the prices up and down movement you equate it to loss or you equate it to profit price moving up and down is part and parcel of mutual fund investment if you are perturbed by when the prices will fall then you are not a good candid to invest your money into the mutual F volatility is not loss volatility is just normal what why do you have to see volatility as something that you have lost money the headline uh newspaper articles the televisions everybody say sensex collap by 2,000 points and the investors lost
so much of their money so many lacks of crores of rupees suddenly you sit up and check how much money did I lose in the in actually in reality because of these movements you neither make money or neither you lose money let's imagine that your spouse has purchased some gold jewelry and you have paid certain amount of money and next day the gold prices will fall are you disturbed because of this market Fall the answer is no you will never get Disturbed I haven't seen a single lady till now who said I'm worried because the
gold prices fell we get worried only when the mutual fund prices fall when the sensex Nifty fall that is the time when we get Disturbed the volatility is not lost but if you try to sell out of your fear think thinking that you will make more losses then a notional loss will get converted into real loss so remember when you are investing in mutual fund volatility is is not a true loss it is just a notional loss all that you have to do is stay wherever you are don't do anything which will convert this notional
loss into real loss so if you're a person who is worried about the volatility then you shouldn't be investing in mutual funds number 12 my risk profile is conservative Ultra conservative I have limited amount of money I have limited amount of time to reach for the utility of that money if I lose that particular money I do not have a withstanding ability to withstand that volatility or the real loss if your risk profile is conservative you don't have that much money you don't have that Elbow Room to give the extra time for the prices to
come back to its normal in such a case you shouldn't be investing in mutual fund it's just not in the mutual fund you shouldn't be investing in any risk bearing assets like gold silver mutual fund stock stocks ETFs index F anything you shouldn't be investing in rather the place where you have to go and PK your money are the bank fix and deposit dear viewers I have told you some of the set of people who shouldn't be investing in the mutual fund I presume many of you who are watching this episode have already invested into
the mutual funds I would like to hear from you have you done the mistake of investing in mutual fund because you are belonging to one of the category I would like to hear from you uh give your observations and experience in the comment section below number 13 if you're a person who does not believe in beating inflation to create wealth then you shouldn't be investing into the mutual fund the very reason why you invest into the mutual fund is with the purpose of beating the inflation wealth gets created only when you beat inflation the money
what you have today should be worth more than what it is today in some point of time in future that is called beating the inflation and creating wealth and if you don't believe in this principle then you shouldn't be investing into the mutual fund the the major reason why you invest into the mutual fund is because the wealth can get created only when you beat inflation mutual funds are probably the finest Vehicles which can beat inflation in the long run if you think beating inflation is not something which is your top priority then you have
no reason to invest into mutual fund dear viewers hope the video that I've done today helped you to sit up and Ponder for a while why you are investing in mutual fund and the video that I've done today probably would help you to invest in mutual fund in a proper way setting up your expectation in a proper way by the way if it helped you to uh Focus properly because of this video do give me a thumbs up if you are somebody who is yet to subscribe for this Channel please hit that subscribe button and
press the Bell icon do not forget to share these videos with your near and dear one friends and relatives and on all the WhatsApp groups on which you are connected with thank you very much for watching this episode on NR money Clinic I shall be back with you with yet another episode of your life your money next Friday till then stay safe J hind press the Bell icon for more details and subscribe our Channel [Music]
