Like all economics or personal finance questions, this question is also complicated. Well the question is not complicated, but the answer surely is!
Let us first see what options people use and why:
Bank Relationship Manager: Ha! he has a target to achieve, and a number to reach. So he tells you:
– it is convenient: true, he will do all the paper work, he knows that you have 12,84,432.34 in your bank account, so Rs. 12, 84, ooo can be safely invested…what more do you want?
the only problem is you maybe buying something that you do not need. Also if your wife is a Non Citizen (and therefore your units are in single name, but your demat account is in joint name)…he will tell you ‘he can get it dematted – lie number one.
Lie number 2 will be ‘Sir let us do a SIP for one year…..well surely this is NOT because he gets credit only for a 12 month SIP?
Lie no. 3: all your details will be in one place
Oh he forgot to tell you that it will not be well analysed like Iris, Valueresearchonline, Morning star…..
Lie No. 4: Sir this is the best scheme NOW ….and it is closing in 4 days..
Lie No. 5: Sir put this money in a FMP….FMPs are risk free….
Let us counter them
– If convenience was the only thing to consider, consider Las Vegas (Aniruddh Sengupta told me this)
– SIPs can be done for much longer periods – without the bother of paper work. If you are preparing for a 20 year investment life, why will you CHANGE fund schemes annually?
– go to www.camsonline.com – enter as an investor – your latest statement comes to you in 10 minutes. Not a real great advantage, Mr. Banker..!
– when you have cash, a new scheme is born every week….or month…Opportunities seek cash. If you have cash, you will get a million chances…
FMPs used to be risk free, long ago. If you think risk is a static thing, all the best.
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