Last Updated on October 8, 2023 at 1:34 pm
Suppose you are coming down to Chennai for a week on work. You are a foodie and would like to try out the local cuisine. What do you do? Ask a friend or relative for good places to dine in? Search for “best restaurants in Chennai”? Yes, that seems logical. What is the worse that could happen? You dislike or even hate the food or have a case of the Chennai belly? No biggie. A couple of days later, it is water under the bridge.
First some book news: My new book with Subra(money.com), You can be rich with goal-based investing is now available at Flipkart for Rs. 359/- only! Pre-order now!
Freefincal regulars would have guessed the contents of the post from just the title. This post is not meant for learned folk like you. I request you to forward it those who might benefit from it. It is directed at two sets of people:
(a) Personal finance bloggers who create “listicles” – Top 10 mutual funds, Top 10 ELSS funds, Top 10 mid-cap funds etc. for the simple and singular reason that it ‘sells well’ in Google
Join over 32,000 readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email! 🔥Enjoy massive discounts on our robo-advisory tool & courses! 🔥
(b) The tens of thousands of investors who search for such “top funds” or “top stocks”.
Reasons why mutual fund selection is different from choosing restaurants (or even furniture!)
The pros and cons of eating out on a recommendation are temporary! More importantly, you know when you are having a good time and when you are having a bad time. Even more importantly, you know how to react/respond in both cases.
When my friend says, “the butter chicken at XYZ is awesome”, my experience is unlikely to be too different hers. It is not a case of blind men and the elephant!
If I buy a ‘top fund’ because someone (including a rating portal) says so, I need to recognise
1. What is the definition of top/best used. ‘Best’ could be mean great taste or ambience. If it just means maximum return, it is immature, to say the least.
2. That these ratings will change fast (unlike restaurants ). And that they are changing because the outlook of an investor is different from the outlook of of an analyst or blogger writing a post. That is the nature of the market. Butter chicken prepared this month will not taste very different from that prepared the next. Investing in volatile instruments depend on when the investment was started and the sequence of returns that followed. The analyst will be tracking a different sequence than the investor.
3. How to define good performance and bad. This is an individual definition. At least to start with, this can be done with borrowed conviction and then refined. However choosing a fund on recommendation without knowing how to analyze performance is like making a parachute jump without learning how to open it.
4. that unlike mutual funds one can have multiple dining experiences without much of a problem. Random mutual fund (or stock) buying is often a sign of a cluttered mindset!
Are you (Am I) being a responsible blogger?
It is a fact that most people search for “top funds to buy” and not “how to choose a mutual fund“. Does that mean I should such posts? Give the people what I want? Write posts for Google and not for people, not for a community? Sure that would get me traffic, a lot of traffic. I will be featured in the “top bloggers” list (another dangerous listicle). Should I define success by running a fish stall or by running a fishing gear stall?
🔥Enjoy massive discounts on our courses, robo-advisory tool and exclusive investor circle! 🔥& join our community of 5000+ users!
Use our Robo-advisory Tool for a start-to-finish financial plan! ⇐ More than 1,000 investors and advisors use this!
New Tool! => Track your mutual funds and stock investments with this Google Sheet!
We also publish monthly equity mutual funds, debt and hybrid mutual funds, index funds and ETF screeners and momentum, low-volatility stock screeners.
- Do you have a comment about the above article? Reach out to us on Twitter: @freefincal or @pattufreefincal
- Have a question? Subscribe to our newsletter using the form below.
- Hit 'reply' to any email from us! We do not offer personalized investment advice. We can write a detailed article without mentioning your name if you have a generic question.
Join over 32,000 readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email!
About The Author
Dr 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 ten years of experience publishing news analysis, research and financial product development. Connect with him via Twitter(X), 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 promoting unbiased, commission-free investment advice.Our flagship course! Learn to manage your portfolio like a pro to achieve your goals regardless of market conditions! ⇐ More than 3,000 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 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 700 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 and pays you! (watch 1st lecture for free). One-time payment! No recurring fees! Life-long access to videos!
Our new book for kids: “Chinchu Gets a Superpower!” is now available!
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 is for those interested in getting side income via content writing. It is available at a 50% discount for Rs. 500 only!
Do you want to check if the market is overvalued or undervalued? Use our market valuation tool (it will work with any index!), or get the Tactical Buy/Sell timing tool!
We publish monthly mutual fund screeners and momentum, low-volatility stock screeners.
About freefincal & its content policy. Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on mutual funds, stocks, investing, retirement and personal finance developments. 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 with credible and knowledgeable sources before publication. Freefincal does not publish paid articles, promotions, PR, satire or opinions without data. All opinions will 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
- Twitter @freefincal
- Subscribe to our YouTube Videos
- Posts feed via Feedburner.
Our publications
You Can Be Rich Too with Goal-Based Investing
Published by CNBC TV18, this book is meant to help you ask the right questions and seek the correct answers, and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now.Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want
This 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
This is an in-depth dive into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, and 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 300 (instant download)