The performance of stock market since we spoke last is anything but stable. From 18k, it went down to 17k and flew back to 18k again, in matter of 5 months.
If somebody tells you that they could have predicted this in advance, then you can be sure of one thing. They were probably lying!
Stock market performances are always like this, non-linear, it ebbs and flows unpredictably best. But how can we then put money in market, seeking consistent return? Well in short term, there are no consistent return from market, but over a longer horizon you can definitely expect some sanity to prevail.
And what best than a mutual fund to contain the market madness?
So as promised, I am bringing out a detailed list of investable mutual funds for you. But before, I began, just a word of caution. These funds are not just based on their returns. Investing on past returns can never guarantee success, and more so the recency bias is always a recipe for disaster, as we discussed in this post last year.
Hope you read it, revisiting might help sometime.
Moving on, the list of mutual funds we are going to discuss, vary from category to category, and for simplification purpose, we will keep them in few categories, with the expectation regarding their risk, reward, stability and suitability intact.
Also I have removed the ELSS category used of tax saving purpose (they have lockin for 3 years), but if you take them into consideration, they would easily be on top of equity category simply because, people cannot take out money from it whenever they wish and that’s the eye opening aspect of any investment, the more you disturb the lesser you get.
So here are the broad types of fund we are going to consider.
Remember, investing in equity fund for 1 year investment horizon in lure of higher return can be disastrous, since it can very well go negative in that year. So higher the risk, higher the time you need to mitigate it.
Enough warnings!, let’s move on to the list now.
Here are top funds in each category for you, these are based on my personal experience of investing and principle of money farming technique. Please consider discussing with your financial advisor before investing in them.
Note: For this analysis the timelines taken were May-2018 to May-2023, purposefully to include the both crisis and euphoria scenario. Also these funds were not considered, size of less than 1000 cr, unrated, thematic, elss tax saving, special purpose fund, fund of fund, index fund and etf fund.
Hope you enjoyed this mutual fund discussion. Remember that there is no one remedy for all fund, we should make choices based on our investment timelines and expectations. Since you never know that when in want of 88% gain you may loose 24% in hand. So take risk but be prudent about your needs. That’s the message!
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