Chasing Returns
People are so obsessed with returns. Generally, we look at equities as a lottery ticket to get rich overnight. Which is the precise reason why most of us fail and run away from equities and advise others that the stock market is sheer gambling! In Order to get rich overnight, people keep chase returns by jumping from one Investment to another or from One Fund to another. Alas, only to miss the bus of returns in most of the cases. Let us now look at a few examples of what happens if you chase returns. We have taken 2 funds of ICICI Prudential Mutual fund company - Large-cap Fund & Mid-Cap Fund. Assume Mr. Investor starts investing in 2010 and based on the previous returns he chooses the mid-cap fund. 3 years later he reviews his portfolio and sees that large-cap fund has given a better return than mid-cap fund - So he jumps from Mid-cap fund to Large-cap fund and continues to invest for 3 years. Look what happens now - Oh wow! he made