Read on Twitter
6yrs completed in one of my SIPs, IRR of 1.5%. I can understand people's frustration with mutual funds. A thread.
I rarely track IRR of my SIPs, leave alone tweet about it. So why now? Two reasons.
First: because there's a trend of people leaving MFs for stocks. When I saw my account statement and randomly checked the IRR, this trend hit home.
Second, a close friend wanted my advice as he shifted out from his SIPs to an investment advisory service. Hence, "I can understand people's frustration with mutual funds".
I don't like putting my personal finances in public domain but here:
SIP 1: 6yrs, 1.5%
SIP 2: 3yrs, 10%
SIP 3: 1yr, 8%
No I won't name them. And yes, these have a long way to run. 10yrs minimum, 25yrs ideal.
SIP 1: 6yrs, 1.5%
SIP 2: 3yrs, 10%
SIP 3: 1yr, 8%
No I won't name them. And yes, these have a long way to run. 10yrs minimum, 25yrs ideal.
Why didn't I say this then? because the original tweet was me expressing sympathy with people leaving MFs. That doesn't imply I hate mutual funds. Yaar matlab kuch bhi FFS!
How can I possibly hate mutual funds? I have THREE SIPs that I haven't stopped even during this pandemic when I am working but earning zero. And yet I'm continuing my SIPs. What does that tell you?
It tells you that I believe in SIPs. My minimum tenure is 10years (ideally 25yrs) and I refuse to stop my SIPs. I love SIPs, they are so fucking simple. And that was the point made in the book. SIPs are simple tools.
SIPs are a simple way to put your money to work. They are a convenient means toward an end. They do NOT guarantee returns.
SIPs are blunt instruments. There are times they will work and there are times they won't. That's not a bug, it's a feature.
Just because I hold an SIP for 10yrs, am I guaranteed to beat the market? NO. It just increases my chances to earn positive returns.
And finally, an SIP is only one of MANY ways to invest in the market. Like lumpsum buying stocks. But both are different products for different objectives. Not comparable.
So why do I still continue with SIP? Because I'm not smart as everyone on Twitter. I don't actively track stocks. Unlike the rest of you, I didn't buy RIL at Rs875 in March. Fin.
