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A very good analogy but I feel some profit booking is necessary. so that when the markets plumet down we can ask our clients to reinvest the gains
Almost all so called financial experts believe that in the long term (20 to 30 years) equity mutual funds will give 12- 15% return. Why dont SEBI, AMFI & AMCs get together and launch funds for long term investors, and give 10-11% guaranteed return after 20 years (if he stays invested in that fund) and pocket the rest of the amount. This way AMCs can make lot of profit and investors also get 1 - 2 percent extra return than bank FDs. In theoretically it is ok, on excel sheet. However in practical it will rarely happen
The above two examples are excellent. Please keep enlightening us from time to time.
Well written Ranjit .. Keep the gems of wisdom flowing
Even if you show the returns generated by funds like Franklin Prima /Reliance growth/ HDFC Equity for last 20 years people get convince. However the test come when you start an SIP and you need investor tom continue. During this long 30 year period there will be many times he would require the money for n number of reasons like Child Marriage/Education/Buying House etc. At such time even if you tell him benmefits of long term investing he will not listen. At time he will lie but withdraw the amount.The basic reason is With drawal from MFs is the easiest thing and you need not give any reason.
good explanations. & also good examples. people always like to listen stories. thank you mr ranjit dani.
Excellent.... Appropriate... Helpful...
Plz give us link of that app
Nice perspective, thanks
Time and again I have been commenting and will keep on criticizing.Yes All the above "GYAAN" is really good BUT this will help NEW IFAs only if they are honest to use it.What about the SENIOR IFAs who still refuse to mend their ways.What about RMs who are in the habit of pushing schemes.Today I have recd a mail announcing 6% Upfront commission ! Who will stop these practices ?
We all face this problem of early redemption by clients. Client feel that if market is up today, he has to redeem immediately otherwise market will go down in next month. so whatever gain is today, grab it. I generally advise client, instead of redeeming , switch to bond funds, if u dont want funds but just want to book profit. In short run he may be right as market is always volatile so if we dissuade him from redeeming and if market goes down, he feels we have given him wrong advice. So hats off to ourself as we have to explain/advise a lot to clients. Its really enjoying.
wants to download the app, pl tell the name of the app
wonderful story, will help
Yes, this will surely give impact on the mind of young investor if explained properly.
Great analogy used and a very useful article...Thanks.