In April-May 2017, Mint carried out a survey of 19 financial advisers, on the biggest mistakes that investors make (read them here: bit.ly/2p2Va8U and bit.ly/2qxzhgG). In July, we started a series where advisers delve into some of these mistakes and recommend solutions. Over the next few weeks, we will talk to more advisers about the mistakes investors make. You can read the series here: www.livemint.com/investor-mistakes. This week, we talk to Gurgaon-based mutual funds distributor Ashish Chadha, about the sort of mistakes he sees among those who come to his office for the first time.
Mutual fund mistakes
Flavour of the season: Every time the markets hit an all-time high, a specific type of fund starts to sell like hot cakes. “In 2008, there was a boom for infrastructure and mid-cap funds. Lots of new fund offers came in those days. Then, in 2008, when equity markets fell sharply and the net asset values of such funds fell too, investors pulled out,” Chadha said. He remembers being reprimanded by a client in those days, to whom he did not sell an equity fund but his bank had. “But because he had leveraged, he had to sell the portion that we managed—to pay-off his debts,” said Chadha. “Don’t chase the best-performing funds. You’ll get into serious trouble,” he advised.
