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