I am not sure about the social media and investment advice, but am worried about the people who talk about risk in the media!
Let us see some comments:
1. At this point if you are afraid of the markets you should shift to a RISKLESS portfolio of debt funds, FMP and bank deposits.
Yuck, yuck, yuck.
If a 24 year old is saving for her retirement – or anything which is 5 years or more duration, this advice is cruelly inaccurate. I would have said laughable, but somebody may actually listen and shift to a debt portfolio.
2. People who do not want to take risks should shift to a riskless portfolio of debt funds, FMP, and bank deposits.
If the speaker/ anchor does not know / realise that getting NEGATIVE RETURNS (especially over long periods of time) is A HUGE RISK, he/she will make such comments. For a person investing for a 3-4 year horizon and the ability to weather storms in the interim period, this suggestion is stupid and obviously wrong.
3. As your age increases, you should invest more in debt funds rather than in equity funds.
My take: yuck again. This is only broadly true – while implementing the total amount available, the total expenses, how well the children are doing, whether there is an indexed pension, all these factors have to be considered. Do not use it like a truism!
All the three pieces of advise can be right for a few people and completely wrong for a lot of people. The way people say it it looks like a statement that is always true. Statements like ‘Sun rises in the East’ – is always true. However these statements are not ‘Always true’. At the time of retirement for example there is NO NEED TO SHIFT EVERY THING TO DEBT. You will need to tackle inflation, ability to withdraw during real bad times, ability to handle stress in a market going down for say 10 years etc….
Please understand the difference between ‘has not happened’ and ‘cannot happen’…- risks of watching the media, perhaps? LOL
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