Came across an interesting set of data regarding mutual funds (MF).
It shows how long investors continue their #SIP for.
I was shocked to see that over 50% people discontinue their SIP in direct MFs in
less than a year.
Compare this with #regular mutual funds - Over 30% keep their money invested for
greater than 3 years (ideal minimum duration) compared to 10% in direct.
Despite direct plans being better (zero commissions), its clear that Indian
investors are better off if you do NOT allow them the convenience of
checking/redeeming their portfolio at the click of a button.
Reminds me of a quote by Morgan Housel:
"investing is not the study of finance. It’s the study of how people behave with
money. And behavior is hard to teach, even to really smart people."
Apps like Paytm Money, Groww, India, Scripbox, Zerodha have solved the problem
of mis-selling, which is usually associated with regular MF. But how do they
solve for people's behaviour?
Disclaimer: Views solely my own.
Data source: Sumaira Abidi (CNBC-TV18)
Posted by Anirudha Basak on LinkedIn
link: linkedin.com/in/anirudhabasak
It shows how long investors continue their #SIP for.
I was shocked to see that over 50% people discontinue their SIP in direct MFs in
less than a year.
Compare this with #regular mutual funds - Over 30% keep their money invested for
greater than 3 years (ideal minimum duration) compared to 10% in direct.
Despite direct plans being better (zero commissions), its clear that Indian
investors are better off if you do NOT allow them the convenience of
checking/redeeming their portfolio at the click of a button.
Reminds me of a quote by Morgan Housel:
"investing is not the study of finance. It’s the study of how people behave with
money. And behavior is hard to teach, even to really smart people."
Apps like Paytm Money, Groww, India, Scripbox, Zerodha have solved the problem
of mis-selling, which is usually associated with regular MF. But how do they
solve for people's behaviour?
Disclaimer: Views solely my own.
Data source: Sumaira Abidi (CNBC-TV18)
Posted by Anirudha Basak on LinkedIn
link: linkedin.com/in/anirudhabasak
