In April-May 2017, Mint surveyed around 19 financial advisers on the biggest mistakes they saw investors making ( read it here and here). Next, Mint Money started a series where an adviser delves into some of these mistakes, and recommends solutions for them. Over the next few weeks, we will talk to an adviser about mistakes investors make. You can read the other stories in the series at www.livemint.com/investor-mistakes. Here we talk to Shyam Sunder, managing director, PeakAlpha Investment Services Pvt. Ltd.
Mutual fund mistakes
Opportunistic buying
How do you make sense of more than 400 equity funds and 1,000 debt funds? As a result, said Shyam Sunder, many investors tend to buy anything and everything. “This is usually indicated by a wrong asset allocation,” he said. This leads to investors walking into his office with “funds by the kilo” and portfolios full of “flavours of the month” funds. Sunder says to buy funds systematically. “The right way to build a mutual fund portfolio is to do it strategically, with the end in mind, which is financial freedom. Based on a determination of one’s cash flow needs, risk profile and life stage, one must establish the target asset allocation. Based on this, the portfolio must be constructed, with instrument selection being the last piece of the puzzle,” he said.
Bequeath wealth, not worries
