You will hear the following statements from the media from time to time…read it. They are accurate. Ignore it, there is no action that you can take based on that. Let me also tell you what the media means by that:

  1. In the last 5 years the Index went nowhere.

Great statement, perhaps perfectly accurate. The media person is implying that in those 5 years in debt markets your money may have grown well. The action expected from YOU is to panic and sell the units and shift all the money to some debt product like say PPF.

What you should do: Ignore it. Completely ignore it. Maybe this year the market will perform so well that it could completely erase the non performance of the previous 5 years.

Why should it not matter: For most of us who invest it is almost always a SIP. So on a SIP basis you could have made money because the market going from 7500 nifty to 7500 nifty may have seen 6300 also – which means you got the benefit of averaging. The Index does not consider the dividend, whereas the fund manager gets the dividend!

So please ignore what the media tells you about short term market behavior…

2. In the last one year the bank RD gave better return than the Sensex.

Well, it may have happened. I may not have happened. Suppose in the following year if the index went up 22% will you find an article saying “this year compensated for the under performance last year”? I doubt it. Anyway if they had managed to create panic in your mind – which was struggling with the fear, those idiots have already caused you financial damage, have they not?

3. Midcap gives better returns than Large cap funds

I can argue the reverse also – depends on how much I have to manipulate the data, portfolio composition, dates, etc. So as far as you are concerned it does not matter whether this data is true or false. Most important thing to remember is large caps and mid caps give better return than bank fixed deposits. So if an IFA can get you to change your investment portfolio from a pure debt instrument portfolio to a mix of bonds and equity, he has done you a big favor. Now stop reading such shit.

4. Midcaps are more Volatile than Largecap funds

This is the most meaningless statement that you can read anywhere. Most journalists will not be able to make out the difference between risk, volatility, and real returns if you press them. So how to react to this statement? Ignore maadi. Just ignore.

5. Suggesting a variable return for a retired person is mis-selling

This super great statement was made by one of the Deputy Governors of RBI. Clearly personal finance teaching / learning has to start at the regulator’s home. If such a senior person does not understand REAL RETURN vs NOMINAL RETURN, God bless him. Lucky guy he has an indexed pension. This pension will be in 6 figures to start with….lucky guy..repeat…lucky guy.


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  1. Sanjay Singhaniya

    If somebody points out that PPF has given better returns than last 10 years of SIP in index funds then he has to be taken seriously. If “HDFC Index Fund – Nifty Plan” has returned 189,294 Rs. after doing SIP of 1000 Rs for 120 months then one has to note that in even in the period of 120 months, it is not guaranteed that equity will beat debt.

  2. Sanjay,
    There is a calculation error. As per the article, the fund in 2007, 2011, & 2014 could have gone nowhere. However your purchase would have fluctuated between 22 & 50 bucks. After that it has looked up and moved on. Use one of Pattu’s calculators or check the graph on Moneycontrol.
    Just hold on & increase your SIP.

  3. When you read an article saying market went nowhere understand that the @#$%^& journo did not understand how people invest. Over a long period people do a SIP, NOT a lumpsum. The investor gets dividend also….so he may not be so badly off…

  4. Sanjay Singhaniya

    @Subra sir,
    It simply means that equity is not guaranteed to outperform debt even over 10 years duration.
    Obviously, the best way out is to have asset allocation as per one’s risk tolerance level.

  5. An unnecessary comment. I am aware of Subra’s proficiency in many languages. Is Kannada too one of them? Loved the usage of “Ignore Maadi”

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