Confused with Mutual Funds & the Markets?! Read This...
Read this whenever you are confused about Stock Market (Mutual Funds) and u will get answers:
1) 80% of Gains come in 20% of time. So one needs enormous patience & conviction to hold Mutual funds for 10+ years.
2) Why not all investors get rich? They like to get rich without going through many years of Discipline & Patience. They want quick money / returns – not compounded wealth!
3) A worst fund you can
stick with is likely to produce better results than a best fund you cannot
stick with & continue.
4) Understand Compounding; After 10+ years, money makes more money. So stick with investing without withdrawing for at 10+ years.
5) 99% of the time, doing nothing is the best thing to do in the market. Activity hurts.
6) You cannot predict or control markets & returns. What you can control is how much you invest, investment process and behavior. Focus only on that.
7) Don’t chase high returns – Don't look for 5-star rated funds; they keep changing from time-to-time. Invest in a portfolio of funds with various styles & market caps for long-term.
8) Markets usually run ahead or fall behind any news. Don’t time the market – it is impossible.
9) Buying and selling is easy. It is holding on through ups and downs is difficult but ultimately most rewarding.
10) Tiny drops of water make the mighty ocean. Invest regularly. Invest for long term. You can create huge wealth.
11) If someone keeps Reviewing value of his house every day, we may suspect his mental health. But that’s what we keep doing with our mutual funds.
12) Invest when you have money & withdraw when you need it - but make sure there is at least 10 years gap in between.
13) Withdraw from Mutual Funds when you are close to your goals (1-2 years) - otherwise stay invested without worrying about market falls & without getting excited about market rises.
14) In short-term (less than 5 years), expect negative returns & volatility. Don't invest in mutual funds if your goal is less than 5 years.
