Pay heed to what you are buying, and why
No one financial product is the answer to all investing requirements. So, set your goals and choose accordingly
Mutual funds have been receiving huge inflows from retail investors in India and every now and then, milestones of assets under management (AUM) are being celebrated. And why not? Finally Indian investors are shifting to financial assets. But is this move to financial assets done with proper understanding and planning? An 80-year-old relative whom I met recently told me about how he had moved more money into mutual funds because interest rates on traditional investments were falling. His portfolio consisted of equity funds including sector funds, mainly from one of India’s oldest fund house, which was considered “safe" to invest into, given its background. The same gentleman, on the advice of one of the biggest Indian private banks, invested into a monthly income plan to get a 1% “guaranteed" monthly dividend.