I am a very busy man (busy running an NGO for children, not a busy industrialist)
I started investing in MFs in 2005.The impression was:
a) nothing beats equity in the long run b) keep your SIPs going for 15-20 years if not until you retire and you’ll get 12-15+ % pa returns c) See equity SIPs as maintenance free long investment (15-20+ yrs)
Over the years I have noticed:
1) Long term SIP investment requires consistent reevaluation: – MFs that are top of the line now may give you just 2% later due to xyz reason. You need to keep switching every year or every few years. When you switch which MF ratings can you trust (MC vs VRO etc) as they differ?
2) What is the best way to switch as the corpus from the old SIP will now be like a lump sum in the new MF?
3) Your 5star fund has been giving you 2-6% per annum in the last year(s) and is now is degraded to 3star. If you switch, you eventual goals (hope of 12-15% pa from equity) won’t meet as the returns of the last two years were below expectations.
After 7-8 years in MF I feel the picture isn’t as rosy / “maintenance free” as it seemed when I started. By the way – I am not talking about market fluctuation just the ups and down in MF returns.
What’s the recommended strategy to simply tackle with MF ups and downs with long term goals (15-30 years)?