Advisor?
Recently, a friend asked me, "Mutual funds are OK.
Good to create wealth . But why do I need a financial advisor to guide my investment decisions?"
He argued that he could manage his investments
using online tools, calculators, and readily available
fund ratings.
His point seemed valid at first glance: with
digital platforms offering seamless transactions
and detailed performance data, why go to the
trouble of finding a good advisor?
However, the real value of a financial advisor lies
not in the basic services that technology can
replicate but, in their ability to bridge the gap
between potential and actual returns.
I asked my friend a simple yet critical question.
"Are you happy with the returns on your mutug
fund investments?"
He admitted he wasn't.
Despite investing in top-rated funds,
his portfolio has significantly underperformed
the NIFTY index over several years.
Intrigued, I analyzed his Portfolio and uncovered the root of the problem
portfolio and uncovered the root of the problem.
While my friend had chosen good funds, his returns were lower than the funds' performance.
The culprit?
Behavioral mistakes. He had made emotional
decisions, such as redeeming investments during market corrections after reading alarming headlines like "Rs 5 lakh crore of investor wealth wiped out."
At other times, he paused his SIPs instead of capitalizing on lower NAVs or invested heavily during market peaks driven by a buying frenzy.
This behavior isn't unique to him.
This discrepancy-caused by poor timing and
emotional reactions-is where financial advisors can deliver true value.
Courtesy :: Mr Ganesh Mohan , CEO,
BAJAJ FINSERVE AMC
No comments:
Post a Comment