We have heard of people saying that while funds have made great returns, investors haven’t made such returns. The following example will clarify this situation.
A person goes to watch an ODI match. His team is chasing a formidable total. The run rate required is high and his team’s run rate is nowhere near it. It’s the 42nd over and the run rate has climbed steep at 15 runs per over.
Hopes of winning have vanished. Dejected with the situation our friend decides to walk out of the match.
But the game turns on its head just after that. The batsman on the crease plays a blinder scoring at more than 20 runs per over that makes his team win with an over to spare.
When our friend reached home and finds out about the outcome, all he could do is to rue his decision of walking out.
Likewise, all those who had redeemed their mutual fund schemes in the past should just find out what would have been their score had they not redeemed then.
This should be one of the first steps while pitching for new business. Financial Advisors should help them figure out this figure that they chose to let go because their fear, lack of knowledge and a Financial Advisor.
Dharmendra at NextLevel-Education.