Mutual Fund Investment Mistake - 5: Bye, Bye Ignorance
Posted On Wednesday, Dec 28, 2011
Oh yes! We’ve heard about how ignorance is bliss, but that doesn’t really apply to every facet of your life, especially not your finances. In fact when it comes to your investments and their well-being, nothing less than absolute awareness will do.
So this New Year, dress up your attitude and make sure that you show any streak of ignorance the way to the door.
Let’s start by checking the investments that you already have. Let’s consider your mutual fund investments:
i) Do you know the investment philosophy of the fund house?
ii) Do you know what are the fund’s long term objectives and goals?
iii) Are you aware about the management team that runs your fund?
iv) Why exactly have you decided to go with a particular fund?
These are just some of the questions that you need to find answers to. Unfortunately, majority of investors do not read the fine print, and hence, even though investing is very simple, it ends up appearing way more complicated and complex.
It does not pay to live in ignorance. Remember that if ignorance was bliss, then there would be many more happy investors. The only way to eliminate ignorance is by ensuring that you spend more time and effort towards being an aware investor. In order to help spread awareness amongst investors, fund houses like Quantum have embarked upon local investor meets.
So this New Year shed your old investment attitude with these resolutions:
i) I will not let exaggerated claims made through glossy promotions and mass media advertisements influence my investment decisions.
ii) I will not allocate my savings based only on the number of stars a fund owns.
iii) I will not invest in a fund without analysing its past track simply because it has performed well over the last six months.
iv) I will not invest in a Mutual Fund because my friend/colleague did rather, I will invest in a Mutual Fund depending upon my Financial Goals.
Gift yourself some financial peace of mind, this New Year. Ignorance can have a cascading effect on your future investment pattern. It can make you emotional and you may end up with the mistake of emotional investing. Emotions can be lethal for investments. In our next article, learn how you should keep the matters of your heart away while investing.
Bye Ignorance, Hello Sensible Investing.
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