Do Mutual Funds Make Money? Find Out!

             
So this is one question everybody will have on their mind? 

Do Mutual Funds actually make money? After all, they are related to stock markets. So they are ideally risky and so much risky that people lose 100% of the money, Right? 

Warren Buffet Says - "Risk comes from not knowing what you're doing" 

Next time somebody says stock markets are risky tell them what Buffet says. More importantly, share with them this blog. That is, of course, after once you have read it yourself.

Alright, Equities or their proxy, that is Mutual Funds are risky but one can negate the risk by staying longer in the game. Please go to google and search the return any equity mutual funds for more than any 8 year period, you will yourself know. Repeat the exercise for any 3 year period, You will yourself know. 

We have been researching about Mutual funds for almost 18 months now and we thought it will be useful for our readers if we can write about 2 of the Oldest mutual funds and let the readers themselves decide - "Do Mutual Funds ACTUALLY make money? "

Mutual Fund 01

As one can see, Rs 10 invested in '93 would be worth Rs 897, that is 89 times in 25 Years meaning your money grew almost 4 times each year! Is it not amazing? 

The Price Chart of this fund - 

Please Click Here for the historical Price data of this fund so that you can believe. 

Remind yourself - Risk comes from not knowing what you are doing! 

Mutual Fund 02

As one can see, Rs 2 invested in '94 would be worth Rs 178, Again that is 89 times in 25 Years meaning your money grew almost 4 times each year! Is it not amazing? 

WOW ! ! ! Indeed Mutual funds seem to be making money after all. 

The Price Chart of this fund - 

As we write this blog, we know a lot of people who already own real estate, Gold & Fixed deposit instruments but they don't own any Equity related instruments. Still, they want to invest more in Real estate or gold. Ignorance is a sin, so much true in financial planning. 

The prime reason for this is the perceived risk. Let us tell you that if you can hold on to your equity investment as like you hold others above. Below is what happens -

For those of you who don't understand charts, below table shows the value of Rs 100 invested in Various assets in 1994. 

 While your Gold & Real estate have grown 7.6 & 8.6 times, Look at what Equity funds have done. 

Next time you add real estate/gold for your retirement or kids, know to choose better. Well, what did Buffet Say?  "Risk comes from not knowing what you do"

Seems he is talking about a different risk altogether! Wake up folks :)