5 Mutual Fund Myths That Are Costing You Lakhs
- By Admin
- 21, Aug 2025
- Mutual Funds
5 Mutual Fund Myths That Are Costing You Lakhs 💸
I've seen these dangerous myths destroy more wealth than market crashes. Time to bust them with hard facts. Understanding these misconceptions is crucial for anyone serious about building long-term wealth through mutual fund investments.
𝗠𝘆𝘁𝗵 #𝟭: 'Wait for the market to fall before investing' - The Reality: Market timing is a wealth destroyer. Real Example: Investor A waited for the 'right time' from 2020-2024 → Still waiting. Investor B started SIP in March 2020 (market peak) → Generated 15%+ CAGR. Cost of waiting: ₹10,000 monthly SIP started in 2020 would be worth ₹6.2 lakhs today. Waiting cost = ₹6.2 lakhs!
𝗠𝘆𝘁𝗵 #𝟮: 'Lump sum is always better than SIP' - The Truth: SIP often outperforms lump sum in volatile markets. Data speaks: SIP in Nifty 50 Fund (2015-2024): 12.8% CAGR. Lump sum in 2015: 11.2% CAGR (if you timed it perfectly). Lump sum in 2018: 8.9% CAGR (market peak timing). Rupee cost averaging makes SIP the winner for most investors.
𝗠𝘆𝘁𝗵 #𝟯: 'Direct funds are always better than regular funds' - The Reality: Advisor value often exceeds the 0.5-1% extra fee. What you miss with direct investing: Portfolio rebalancing (Can add 1-2% to returns), Behavioral coaching during market downturns (Priceless), Tax optimization strategies, Goal-based planning and fund selection. Real cost: Poor fund selection can cost 3-5% annually. The 1% advisory fee suddenly looks cheap!
𝗠𝘆𝘁𝗵 #𝟰: 'NFOs (New Fund Offers) are like IPOs - get in early' - The Shocking Truth: 78% of NFOs underperform existing funds in the same category. Why NFOs often disappoint: No track record to evaluate, Usually launched when the theme is already overpriced, Marketing hype ≠ Performance reality. Better approach: Stick to funds with 5+ year proven track records.
𝗠𝘆𝘁𝗵 #𝟱: 'Small cap funds give highest returns, so invest everything there' - The Expensive Reality: Concentration risk can wipe out years of gains. 2022 Small Cap Bloodbath: Many small cap funds fell 40-50%, Investors who put everything in small caps took 3+ years to recover, Diversified portfolio holders recovered in 8-12 months. Smart strategy: Small caps should be maximum 20-30% of your equity allocation. The Cost of Believing These Myths: Conservative calculation for a ₹25,000 monthly investor: ❌ Myth believer: 7-8% returns due to poor decisions. ✅ Myth buster: 12-13% returns with disciplined approach. 20-year difference: ₹1.2 crores vs ₹2.4 crores. Cost of myths: ₹1.2 crores! My Promise to Clients: I don't sell dreams or get-rich-quick schemes. I provide: Evidence-based investment strategies, Transparent fee structures, Goal-oriented portfolio construction. Because your wealth is too important for myths and misconceptions. Stop letting myths cost you lakhs. Let's build your wealth on facts, not fiction.
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5 Mutual Fund Myths That Are Costing You Lakhs