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  • Category: Miscellaneous

    Can you plan the future with your past? Then why mutual fund?

    Everyone looks to the future, for themselves and their loved ones. We are all busy forgetting the past and building a new future. Many parents go crazy about the future of their children. What to do in the future? How to manage to live? Can you stand in such a competition? etc., many such questions are always on our minds.

    In these cases, no one compares the past. But I have seen that everyone with mutual funds is looking for past performance. I have heard that it has given 50% return in the last 2 years, so it will pay at least 25% next year. I don't know how everyone is investing in mutual funds based on such predictions. On the other hand, various companies are also advertising in this regard by showing past performances. Your idea, please.
  • #745403
    Yes, and remembering what has happened in the past is always important. For example, you are facing some kind of problem now and after thinking for a while you remembered that you have gone through a similar situation sometime earlier. In that case, I am sure you will think of how you dealt with that problem last time and apply it this time also with some modification if required. That's why we refer to the past. It's for our experience but that should not indicate that one has to live in the past to do well in future. Our past experiences help to solve the present problems and that's why the performance in the past is given importance. In the case of Mutual Funds, it's a prediction only and may not come true always.

    "Life is easier when you enjoy what you do"

  • #745404
    I am also new to Mutual funds and from June onwards I invested Rs.75000 in different companies that are 5 star rated. At this moment I got an increase of Rs.14,000. From the beginning I am observing a definite increase but at some time it is falling Rs.1000 and around it. Actually I got an increase of Rs.15,000 and above few days back. But at present it dipped Rs.14000. I think mutual funds are better than shares. Around 18% increase on my investment within few months and that we cannot expect from fixed deposits. Investing limited amounts is a good option than in bank fixed deposits.

  • #745408
    Many people are investing in mutual funds to get good returns or at least to hope for good returns. As the equity market is a risky proposition so many people do not want to invest in equity market and are diverted to its cousin known as mutual fund.
    Mutual funds invest their kitty in equity and bond market and if the market is doing good then mutual funds will be doing good and on the other hand if the market is sinking then mutual funds will also be going down. It is as simple as that.
    Past performance of mutual funds is only an indication and is not a thing necessarily going to happen in the future. So we have to observe and monitor the market trends before investing in the mutual funds.

    Knowledge is power.

  • #745426

    Our past performance is an indicator of our performance. If a student gets 70% in quarterly examinations, his teachers expect similar performance from him in the half-yearly examinations also. If we hear that somebody is sick, we will say. I have seen him, he is Ok. what happened all of a sudden? Like this, all the events will be compared with our earlier experience. When we are facing a problem also, we will try to recollect our earlier experiences in such situations. This is natural. The same is the case with Mutual Funds also. We will try to see how it performed earlier and how much return it has given to the investors and then decide to go for it or not.

    Past performance is an indicator for the performance of the instrument in the future also. We will expect a little this way or that way and we will never expect a big change. But nobody can give any guarantee that it will perform in the same way in the coming days also.

    always confident

  • #745433
    Good question posed by the author and it is important to answer this thread because I have also invested in the mutual fund. Firstly one must have the faith in mutual funds because it gives constant returns irrespective of market behavior provided the company in which we have invested is doing extremely well. Since four years my funds were parked with L&T mutual funds and every month without fail I am getting the interest and the NAV value is increasing every month. That proves that the past performance was good and future also holds good for the company. Without knowing the company none would invest and those companies which are having good past track can be trusted. One more thing L&T are into construction business and they are having wholesome contracts and experience for the future.
    K Mohan @ Moga
    'Idhuvum Kadandhu Pogum "
    Even this challenging situation would ease

  • #745443
    Past performance of the mutual funds is not necessarily indicator of its future performance. However we can see that promoters display the performance of a particular mutual fund aggressively to woo the investors. What I mean to say that such a trend of profit may not sustain in future. The results could be otherwise. Overall, it is a risky proposition.
    However we can see that interest rate of the banks have come down sharply which we witnessed five years back and in the prevailing situation, it is rather difficult to manage expenses for the senior citizens. They can be tempted to use the mutual fund instruments but how long they will remain benefited with such investments is questionable.

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