Thursday, June 9, 2022
HomeMutual FundAre you constantly seeking motivation to continue investing in mutual funds?

Are you constantly seeking motivation to continue investing in mutual funds?

Many young investors in mutual funds suffer from a problem that needs urgent attention: they are constantly seeking motivation to continue their investments in mutual funds. A discussion on why they need to get real and get over this to build wealth.

So what is the problem? Articles such as these:

Are enough to shake the faith of many investors in equity and equity mutual fund investing. Many turn angry and criticise us for “always being negative about mutual funds”.

What is even more worrying is, each time they see articles such as these:

They tell us, “thank you for the motivation. We are going to continue our SIPs”!

If the truth about equity investing – that “there are no guarantees that systematic long term investing will work” – scares you and you are constantly looking for someone to say, “don’t stop investing, keep going, all will be well in the long term”, then I am afraid you on a sticky wicket.

No one can convince you or motivate you more effectively than yourself. Equity investing is hard. Take a look at this Google Finance screenshot of Sensex over the last five years.

Google Finance screenshot of Sensex over the last five years
Google Finance screenshot of Sensex over the last five years

The two white lines are equal in length and represent eight months in time. The March 2020 crash and recovery to pre-crash levels took about eight months. The market has been falling from Oct 2021 for almost eight months now. Which looks more dangerous?

This is how equity investing will be. There will be crashes, bull runs and extended sideways movement that will test our patience. So how can we keep investing even if there is no data support to suggest that it will all turn out fine?

What choice do we have? If we quit equity and flee to fixed-income safety, we have guaranteed our failure. There is practically no chance of financial independence at retirement because most of us do not earn enough.

All equity investing offers is a chance. Not a guarantee but a chance. That is just about as reasonable as it gets with life!

But how do we keep ourselves motivated and stay the course? Be emotional about the future, not the present. This is the only reason I was able to invest in equity MFs when my returns were zero from 2008 to 2013. I kept telling myself I had to suffer this pain to ensure I accumulated enough for retirement, as there was no other way out.

This is the gain or loss in my equity MF retirement portfolio.

Gain or loss in my retirement portfolio dec 2019

When the tide turned, and the bull run began, my life changed. All I can say is that we must go through at least one cycle of frustration and euphoria to appreciate that patience is key. If we go through two cycles, we understand the truth about equity investing: Luck and discipline are all there is to it.

The discipline to not just keep investing patiently but to have a plan and stick to it. To understand why you are investing. If this “why” is flimsy and return-based” because you saw others make good returns or fixed deposit returns are poor, then I am afraid your investing innings will be short-lived.

To summarise, find the motivation within to stay the course, but first, have a proper course in mind. If you cannot do this, no one else can help you. Only a few can pull this off, which is how the cookie crumbles.

Do share if you found this useful

Enjoy special discounts on our 10th anniversary!  

Explore the site! Search among our 2000+ articles for information and insight!

About The Author

Pattabiraman editor freefincalDr M. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over nine years of experience publishing news analysis, research and financial product development. Connect with him via Twitter or Linkedin or YouTube. Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (CNBC TV18) for DIY investors. (2) Gamechanger for young earners. (3) Chinchu Gets a Superpower! for kids. He has also written seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation for promoting unbiased, commission-free investment advice.

Use our Robo-advisory Excel Template for a start-to-finish financial plan! Now with a new demo video!  More than 1000 investors and advisors use this!

Our flagship course! Learn to manage your portfolio like a pro to achieve your goals regardless of market conditions! More than 2800 investors and advisors are part of our exclusive community! Get clarity on how to plan for your goals and achieve the necessary corpus no matter what the market condition is!! Watch the first lecture for free!  One-time payment! No recurring fees! Life-long access to videos! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence.

Our new course!  Increase your income by getting people to pay for your skills! More than 675 salaried employees, entrepreneurs and financial advisors are part of our exclusive community! Learn how to get people to pay for your skills! Whether you are a professional or small business owner who wants more clients via online visibility or a salaried person wanting a side income or passive income, we will show you how to achieve this by showcasing your skills and building a community that trusts you and pays you! (watch 1st lecture for free). One-time payment! No recurring fees! Life-long access to videos!   

My new book for kids: “Chinchu gets a superpower!” is now available!

Both boy and girl version covers of Chinchu gets a superpower
Both boy and girl version covers of Chinchu gets a superpower.

Most investor problems can be traced to a lack of informed decision making. We have all made bad decisions and money mistakes when we started earning and spent years undoing these mistakes. Why should our children go through the same pain? What is this book about? As parents, if we had to groom one ability in our children that is key not only to money management and investing but for any aspect of life, what would it be? My answer: Sound Decision Making. So in this book, we meet Chinchu, who is about to turn 10. What he wants for his birthday and how his parent’s plan for it and teach him several key ideas of decision making and money management is the narrative. What readers say!

Feedback from a young reader after reading Chinchu gets a Superpower (small version)
Feedback from a young reader after reading Chinchu gets a Superpower!

Must-read book even for adults! This is something that every parent should teach their kids right from their young age. The importance of money management and decision making based on their wants and needs. Very nicely written in simple terms. – Arun.

Buy the book: Chinchu gets a superpower for your child!

How to profit from content writing: Our new ebook for those interested in getting side income via content writing. It is available at a 50% discount for Rs. 500 only!

Want to check if the market is overvalued or undervalued? Use our market valuation tool (will work with any index!), or you buy the new Tactical Buy/Sell timing tool!

We publish mutual fund screeners and momentum, low volatility stock screeners .every month.

About freefincal & its content policy Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on developments in mutual funds, stocks, investing, retirement and personal finance. We do so without conflict of interest and bias. Follow us on Google News. Freefincal serves more than three million readers a year (5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified from credible and knowledgeable sources before publication. Freefincal does not publish any paid articles, promotions, PR, satire or opinions without data. All opinions presented will only be inferences backed by verifiable, reproducible evidence/data. Contact information: letters {at} freefincal {dot} com (sponsored posts or paid collaborations will not be entertained)

Connect with us on social media

Our publications

You Can Be Rich Too with Goal-Based Investing

You can be rich too with goal based investingPublished by CNBC TV18, this book is meant to help you ask the right questions, seek the correct answers, and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now. It is also available in Kindle format.

Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want Gamechanger: Forget Start-ups, Join Corporate and Still Live the Rich Life you wantThis book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at a low cost! Get it or gift it to a young earner.

Your Ultimate Guide to Travel

Travel-Training-Kit-Cover-new This is an in-depth dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, how travelling slowly is better financially and psychologically with links to the web pages and hand-holding at every step. Get the pdf for Rs 199 (instant download)

Free android apps



Please enter your comment!
Please enter your name here

- Advertisment -
Google search engine

Most Popular

Recent Comments