Re: mutual fund return for long time
These are two old articles posted by my bro on *****.groups.
just copiying & pesting. hope members will enjoy.
[Ways-2gain] OUT OF THE GRAVE (Re: Mutual Funds vs. Stock Market)Wednesday, November 22, 2006 9:59 PMFrom: "rajanikant_sharma" <rajanikant_sharma@*****.com>To:
Ways-2gain@*****groups.co.in
Every big thing we accept as great achievement was started with
small thoughts and it was seeming impossible on that particular time.
Have a look on these figures :
Stocks Price 30th June Price as on 22nd Nov Increase
%
ABB 2496 3548 42%
Bharat Forge 313 379 21%
ACC 786 1070 36%
BHEL 1949 2470 26%
Gammon 347 445 28%
HDFC 1134 1641 44%
HDFC Bank 792 1076 35%
Hero Honda 791 736 -7%
ICI Bank 488 880 80%
Maruti 796 896 12%
Mcdowell 423 806 90%
OBC 170 243 42%
Ranbaxy 356 381 7%
REL 453 552 21%
RELCAP 490 581 20%
SBI 727 1250 72%
SRF 202 209 3%
Tata Steel 534 473 -11%
TCS 1738 1148 -33%
TV-18 517 894 73%
VSNL 400 438 9%
Wipro 512 581 13%
(Some of stock have been split and I have not taken those in this
list also I really don't know what is the problem with TCS as I am
not trading with stocks now)
I had posted one massage under the title of SUPPORT AND RESITANCE on
03rd July 2006 to give an ideal about entry and stop loss levels to
intraday traders, with this massage I uploaded one excel file as
SUPPORT AND RESITANCE CALCUATOR in the file section of the group.
(members can have a look on that file again) Instead of placing one
or two stocks as example I placed all the list of stocks I was
tracking from last more than one year on that particular time. Why I
did it ?
I had posted one more article under the name of MUTUAL FUNDS VS STOCK
MARKET on 08th May 2006 (you can again read it at the end of the
massage) and I received 7 negative comments in one row. All the
members had not only neglected my theory, but also, they had given
some valuable comments as "Will try to elaborate to night." (this is
a different issue that he has never come back in last 7 months). An
expert member written "As expert we could hardly manage with
sensex." (Well, what can I say about you ? mastery in investing is
not the license for mastery in trading too.) An other member
written " This is ridiculous." (really, I don't know what should I
say?)Anyway, we all are the great citizens of a great country and we
have all the great rights to comment on everything-no matter we know
the facts or not.
You have seen the results above. What those members will say now ?
(It is not one year, only 5 months have passed from the date of
uploading that file)
This was also interesting that I asked about the report of one (any)
single mutual fund which has delivered 50% to 60% return in last five
years (as some of members written in their massages) but no one has
tried to post me even one single report but yes I received one report
on 7th June 2006 with a massage "mutual fund performance since the
market fall started after May 10, 2006. Approx 74 funds(schemes) fell
by less than the NIFTY and SENSEX i.e 21%" also "About 65% of the
schemes under performed NIFTY and SENSEX. This means clearly
indicates mutual fund investing is a calculated move for furthering
one 's wealth." Well can I ask them please why mutual funds lost
(less than 21% means it may be 18%) so much and why not 5% or 8%,
after all they are managed by experts and professionals ?
Anyway, the purpose of writing this all story is that better we know
the facts before commenting on anything. It is not necessary that one
is agree with other but it is also not necessary that what you are
saying is right and nothing is beyond that.
( If any one has considered that list for trading or investing
purpose, please book the profit now as there may be a sharp decline
in December 2006 and one will have a chance to buy back these stocks
on lower prices, also I am not an expert anyway so treat this
suggestion as my personal view.)
RK
--- In Ways-2gain@*****gro ups.co.in, "rajanikant_ sharma"
<rajanikant_ sharma@.. .> wrote:
>
>
>
>
>
> After a long consideration Mr. Kakraj invested some money in a
mutual
> fund, but I really faced a problem when he insisted me for
investing
> some amount in same mutual fund. I had a big question, why should I
> invest in mutual fund ? You may also like to know the same. Before
we
> search the perfect answer we have to understand how the mutual fund
> work.
>
> Various mutual funds are available in Indian market. They collect
the
> money from public for long term (every fund have a lock-in period)
> and invest in Capital market /Bonds/ Government Securities etc.
Each
> mutual fund has to charge some fee etc on annual basis. The profit
> they earn from the investment, they pay as dividend which may be
vary
> and will depend on performance of fund and market conditions etc. I
> have heard that mutual funds have paid the dividend upto 30%-35% in
> previous year.
>
> 30% to 35% return in a year ? Sounds good. What more some one can
> expect ? This is the mater of luck that some one could earn 100% or
> more if he is investing in equity market. I really don't have a
> problem with this theory, but as far as I am concern why should I
> invest in mutual fund ? I have an other theory (for myself).
>
> Suppose A invest an amount of 10,000/-, he has to pay a fee approx
> 5%, this means he will make an investment of 10,500/-, and if the
> fund pay him a dividend of 35%, he will get the return of 3,500/-,
> means 33.33%.
>
> Now take a look on layman's investment. Suppose B invest 10,000/-
in
> stock market and if he get a return of maximum 1% per week (after
> Brokerage and taxes), he will get 5,200/- in one year and even
> without compounding his returns, means 52% in a year. If he
compound
> his investment with his earnings ? The results would be definitely
> much greater.
>
> You can ask, how am I sure for 1% return per week? May be the stock
> face a down trend for 1, 2 or 3 months. Yes, the stock can face a
> down trend even for more time but when it face up-trend ? Can you
> assume upto which label it can jump ?
>
> However, your returns will also depend on the selection of stock.
If
> you choose a good frontline stock with good moving average on a
> reasonable cost and pay proper attention on its movement there is
no
> reason you don't achieve the target.
>
> There is one more problem. Stock market is too risky. Well, does
the
> mutual fund make a guarantee for safe returns ? If you are not sure
> about the answer, please read the offer document. The performance
of
> the fund depend on market condition and there may also be some less
> or even negative returns. So if the risk is involve in both (mutual
> fund and stock market) why should I not play with my own money ? I
> can take care of my money in a better way and will have a
> satisfaction also as I can use my money whenever I need. So thanks
> Mr. Kakraj for your valuable suggestion but fortunately or
> unfortunately I don't think that it meets my requirements, but as
a
> passive or inactive player better you go with mutual funds as you
can
> and will definitely receive good returns compare to the bank
interest.
>
> RK
