Stop asking for fund suggestions already! Learn how to shortlist funds and have the confidence to pick one! Free lunches will cause serious injuries to your financial health.
It is so frustrating and disappointing to see people ask for mutual funds suggestions publicly. It has finally dawned on me that responding to such questions in forums is a huge mistake. I have no idea about their understanding of mutual funds, the nature of the goal they have in mind etc.
Of course one could say, please learn how to choose, have a goal, DIY or get professional help and other blah blah but I would bet that 9 times out of 10 such comments would be ignored.
Simply because most people don't want to pay for financial advice.
There are those who have made a short-list. They want the forum members to pick one for them! Bad idea. Very bad idea.
Let us face it. Most people want product names offered on a platter. They either want an 'experienced' member to ratify their choices or want to see many people invested in the same fund.
Go to any personal finance forum and declare that you have been investing in mutual funds and/or stocks for last couple of decades.
In time, you will receive comments and personal messages asking for your mutual fund or stock portfolio!
Knowing others people's choices. Knowing that the other man has invested in the same fund that you have in mind! What a feeling of comfort! What an informed decision!
Most investors lack confidence. Most investors dot no understand equity as an asset class.
There is no aim. Even if there was, there is no methodology. All they want to know is what the other guy is doing or how they did it.
Well, that is not too bad as long as they stick to one borrowed methodology. All it takes for the next 'expert' to comment and the framework built is wiped clean. Yes, let us have as many opinions as possible. Confusion is a good thing.
If you want to dismiss this as a rant, be my guest.
I write this because we, the truly DIY investor community must try and do something about this:
- Not answering any questions asking for a 8-course free lunch: "this is my fund portfolio ....please guide".
- Urging people to learn methods or pay for financial advice.
- Promote fee-only financial planning. Not specific planners but the vocation.
Considering how small the truly DIY community is, the above might sound like a drop in Millers planet (Interstellar reference), but it is a small step. They will make a difference with time.
"I can short-list, but I am scared to choose!"
At the end of the day, every piece of analysis is based on past performance and the future is unknown.
If you believe in the method, pick any fund from your short-list. Take a leap of faith. That is all that anyone can do.
People email and message me asking for fund suggestions from a short-list. Typically I say, 'choose any either this or that'. Rarely I suggest specific funds. I am taking the leap of faith in both cases!
Why trust me? Take your own leap of faith. Chances are, you will land much more safely than you ever imagined.
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