First, a couple of experiences where I’ve tried to convince people to go in for a MF SIP.
Some years back, I took a class of some juniors in my office and explained to them the virtues of investing in mutual funds from an early stage in life. I thought they would be rather fascinated by the knowledge. Of the lot, only 2 girls showed a bit of interest and told me that they would talk to their fathers. After a few days, both came back with the same answer from their fathers – in Marathi “Ya bhangadit padaycha nahin, postat thev paise”. ‘Don’t get into these hassles, keep your money in Post Office Deposits’.
Sometime back, my business partner convinced a young man in his thirties to invest in Mutual Funds. He came to me with his father and I sat for almost an hour with them and explained the intricacies of investing in MFs. The various categories and risks involved. How risks could be reduced, etc, etc. Somewhere in between, the father asked. ‘Can the value of the investment go below the invested value?’ ‘Yes’, I said and went on to explain how being invested for a longer time reduces the risk of a loss. Both listened intently and after another 20 mins or so asked the question ‘We’ve seen so many warnings that MFs are risky. Can the value of the investment go below the invested value?’ That was probably the end of the session and they both went off.
Didn’t meet them for a while after that. After 20 days or so, I met the father by chance and asked him about the investment. He told me that he had gone to his bank and they had showed him a good scheme – a combination of Mutual Funds like the ones I had shown them and life insurance also! It seems the bank guy told them that of the 10 year scheme, the returns may not be good for the first year, but then it will zoom up after that!!
I tried to explain to him that he had been fobbed off with an ULIP which was a very bad investment. He turned around and told me ‘That is a bank, not a private broker like you. They don’t do things like that!’
So, what about the Onions? Relax, they’ll be there in the next piece.
Niranjan Bangera
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