Mutual fund investors say sticking to plan helped them to create wealth

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When the going gets tough the tough gets going. The saying was repeated repeatedly when some investors got talking about their investments. Most of them were happy with their investments, especially in mutual funds. That is when we asked them what is one thing that helped them to make the most of their investments. Everyone was talking about the new series ETMutualFunds started recently: Beating volatility: Learn from fund managers. If you missed the stories.

Read more: Rational people are successful in all markets, says A Balasubramanian
Also Read: Prioritizing asset allocation led to positive investment experience: S Naren, CIO, ICICI Pru MF

In this series, we reached out to senior fund managers and asked them abut their investment journey. We specifically asked them to share their first brush with volatility or bad phases in the market. The idea was to hear these money managers and learn from their experience. That is why we thought it would be a good idea to ask these investors about their explain experience. Surprisingly most of them said one decision in hindsight played a major role in their efforts to create wealth.

According to these investors, sticking to their investment plans irrespective of the market conditions helped them the most. This is how a veteran investor put it. “I almost sold my investments many times. The last time I decided to get out was when covid was spreading across the globe. Luckily I stayed on,” he said. Most of the investors described various occasions that tested their resolve to stick to their investment plans or stay invested.

According to an investor who have been investing in mutual funds for the last two decades, he still feels the urge to protect the wealth he has created over the years whenever there is a troubled phase in the market. “Initially it was about investing the money when the outlook is bleak. Now it is about protecting the wealth. The point is you have to have a grip on your emotions.”

Another investor says he gets disenchanted when the market becomes too irrational. He says he almost got out of the market when nobody was paying any attention to values and the market was gaining every day. “My friends say I have read too many books. I am still invested only because of these criticisms.”

The reasons may vary but most investors lose their nerve periodically in their long investment journey. Most often we won’t recognise them as derivatives of greed and fear. But for a variety of reasons we all contemplate stopping or pausing or altering our investments. Some investors act on these impulses. Sometimes they get it right. Sometimes they regret their decisions. All these investors say holding on to their nerves and continuing with their investment plan is the only factor that helped them to make money for their long-term goals.

Secret formula for success:
Stick to your investment plan
Always increase your investments every year
Don’t let market mood influence you
Think clearly before making an investment decision
Never change plans based on market conditions

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