<\/p>
Retail investors who chase top-performing sectors, funds or market themes often end up hurting their long-term wealth creation, according to mutual fund industry veterans Nilesh Shah, Navneet Munot and Kalpen Parekh.<\/p>
Speaking during a panel discussion titled \u201cWhat Your Fund Managers Wish You Knew\u201d at Groww\u2019s India Investor Festival, the three market veterans warned that behavioural mistakes such as recency bias, emotional investing and unrealistic return expectations can significantly damage long-term portfolio returns.<\/p>
Recency bias<\/strong><\/p> Nilesh Shah, Managing Director of Kotak Mahindra Asset Management Company, said investors frequently become attracted to investments only after prices have already risen sharply. \u201cOne of the biggest mistakes investors make is recency bias,\u201d Shah said.<\/p> He explained that investors tend to assume recent high returns will continue indefinitely, often leading them to buy near market peaks. Using the example of silver prices, Shah highlighted how investor interest rises dramatically after large rallies.<\/p> \u201cWhen silver was at 18 dollars a troy ounce, we got \u20b920 crore into an NFO. When silver was at 120 dollars, we would have gotten \u20b9400\u2013500 crore,\u201d he said.<\/p> \u201cAt lower prices nobody listened. At higher prices everyone wanted to buy.\u201d<\/p> Shah said similar behaviour is visible across thematic and sectoral investing trends.<\/p> MUST READ:\u00a0How peak pessimism creates best wealth creation opportunities in markets<\/strong><\/p> Referring to Kotak\u2019s defence fund, he noted that many investors entered after seeing strong past performance without understanding the long-term structural thesis.<\/p> \u201cThe fund has given 60%, and people think even 20\u201330% annual returns should continue. That expectation itself is wrong,\u201d he said.<\/p> According to Shah, disciplined investing during periods of uncertainty often creates better long-term opportunities. \u201cGood news and good prices don\u2019t come together,\u201d he said. \u201cWhen there is bad news, it is generally a good time to buy.\u201d<\/p> Invested patiently<\/strong><\/p> Navneet Munot, Managing Director and CEO of HDFC Asset Management Company, said emotional reactions to market volatility often reduce investor returns. \u201cI always say the real meaning of SIP is \u2018Stay Invested Patiently,\u2019\u201d Munot said.<\/p> He warned that many investors pause SIPs during corrections and restart after recoveries, missing out on lower valuations and long-term compounding. \u201cThose who paused SIPs during Covid missed buying units at lower NAVs. Those missed units represent your missing alpha,\u201d he said.<\/p> MUST READ:\u00a0‘India better positioned than many during energy shock, but…’: Economists on oil risks<\/strong><\/p> Munot also cautioned investors against reacting to social media noise, geopolitical headlines and short-term market events. \u201cSomething happens in the US and you close your SIP. Something happens in Iran and you restart with new money. That should not happen,\u201d he said.<\/p> At the same time, he remained optimistic on India\u2019s long-term growth story. \u201cWe are 1.4 billion people \u2014 a democracy, with demographics, demand, digitalisation and determination,\u201d Munot said. \u201cThe pessimist sounds very interesting. But the optimist makes money.\u201d<\/p> Realistic expectations<\/strong><\/p> Kalpen Parekh, Managing Director and CEO of DSP Mutual Fund, said unrealistic return expectations are another major problem among retail investors.\u00a0\u201cPlease have realistic expectations,\u201d Parekh said.<\/p> \u201cIf you expect 30% compounded returns for the next 25 years, that is unlikely to happen.\u201d<\/p> MUST READ:\u00a0Why are more young Indians and women entering mutual funds, markets?<\/strong><\/p> According to Parekh, investors often focus only on short-term bull market returns while ignoring long-term historical averages. \u201cOver very long periods, average real returns above inflation are between 0% and 6%,\u201d he said.<\/p> He also stressed the importance of maintaining discipline throughout market cycles. \u201cWhen people say \u2018buy when there is blood on the street,\u2019 they forget that discipline is required even during periods of market euphoria,\u201d Parekh said.<\/p> The panel collectively advised investors to focus on patience, asset allocation and disciplined investing rather than chasing recent winners or reacting emotionally to short-term market movements.<\/p> <\/div> markets ups and downs, Long term wealth creation India, SIP investing mistakes, Nilesh Shah investing advice, Navneet Munot SIP strategy, Kalpen Parekh market outlook, chasing past returns mutual funds, behavioural finance investing India, market timing mistakes, mutual fund investment discipline#chasing #market #winners #hurt #longterm #wealth #creation1778327607<\/p> ","protected":false},"excerpt":{"rendered":" Retail investors who chase top-performing sectors, funds or market themes often end up hurting their long-term wealth creation, according to mutual fund industry veterans Nilesh Shah, Navneet Munot and Kalpen Parekh. Speaking during a panel discussion titled \u201cWhat Your Fund Managers Wish You Knew\u201d at Groww\u2019s India Investor Festival, the three market veterans warned that […]<\/p>\n","protected":false},"author":1,"featured_media":7820,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[37],"tags":[29014,11471,29013,4584,12457,29012,28998,6542,1724,29015,29008,29016,29011,29010,29009,1827,13905],"class_list":["post-7819","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-content-marketing","tag-behavioural-finance-investing-india","tag-chasing","tag-chasing-past-returns-mutual-funds","tag-creation","tag-hurt","tag-kalpen-parekh-market-outlook","tag-long-term-wealth-creation-india","tag-longterm","tag-market","tag-market-timing-mistakes","tag-markets-ups-and-downs","tag-mutual-fund-investment-discipline","tag-navneet-munot-sip-strategy","tag-nilesh-shah-investing-advice","tag-sip-investing-mistakes","tag-wealth","tag-winners"],"acf":[],"_links":{"self":[{"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=\/wp\/v2\/posts\/7819","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=7819"}],"version-history":[{"count":0,"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=\/wp\/v2\/posts\/7819\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=\/wp\/v2\/media\/7820"}],"wp:attachment":[{"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7819"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7819"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7819"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}