MUTUAL FUND Investing Strategies for BEST Returns in 2024! | Ankur Warikoo Hindi

warikoo

14 Feb 202414:57

Summary

TLDRThe video script discusses personal investment strategies, emphasizing the importance of personalizing one's mutual fund strategy according to age, income, and risk appetite. It advises against blindly following others' fund choices and highlights the speaker's own investments in small-cap funds, explaining the rationale behind each selection. The speaker also shares insights on evaluating funds based on long-term returns, management quality, and expense ratios, while cautioning about exit loads and suggesting a balanced approach to equity investment.

Takeaways

😀 Investing in someone else's mutual funds without personal research can be unwise, as individual risk appetites and financial situations vary.
🧐 It's crucial to do one's own homework before choosing mutual funds, rather than blindly following others' recommendations.
🤔 Personal finance is personal; the decision on which mutual fund is right for you should be solely yours, based on your age, income, and risk tolerance.
📈 The speaker has invested in various mutual funds, including small-cap funds, which they find interesting due to their long-term investment strategy.
💰 The returns on the speaker's investments are highlighted, with some funds showing exceptionally high returns, like 32% annually, which is considered unrealistic in the long term.
🌐 The speaker mentions the importance of considering global and local investments, as well as the reliability of returns from different types of funds.
📊 The significance of looking at long-term returns rather than short-term fluctuations is emphasized, with a focus on 3, 5, and 10-year performance.
💹 The speaker advises on the strategy of investing in mutual funds based on age and income brackets, suggesting different allocation percentages for equity investment.
🚫 The importance of avoiding mutual funds with high exit loads or those that have a high expense ratio is mentioned to prevent unnecessary costs.
🔢 The speaker discusses the ideal fund size for investment, suggesting a range between 2000 to 25000, to avoid market manipulation and high transaction costs.
📚 The speaker concludes by sharing their personal investment criteria and encourages viewers to make informed decisions based on their own research and not just follow advice.

Q & A

What is the speaker's opinion on copying someone else's mutual fund strategy?
-The speaker believes that copying someone else's mutual fund strategy is not advisable because what works for them may not work for you due to different risk appetites, financial situations, and investment goals.
What is the first criterion the speaker considers when choosing mutual funds?
-The first criterion is the return on investment over a long period, specifically not looking at one-year returns but considering three, five, and even ten-year returns.
What is the significance of the size of the assets under management (AUM) in mutual funds according to the speaker?
-The speaker looks for a balance in the AUM, suggesting it should be between 2000 to 25000 crores, as too much or too little can lead to price fluctuations and difficulty in managing the fund effectively.
Why does the speaker avoid investing in small-cap funds with high expenses?
-High expense ratios can significantly reduce the returns on investment. The speaker prefers funds with lower expense ratios, which are typically around half a percent to one and a half percent.
What is the speaker's view on exit loads in mutual funds?
-The speaker advises avoiding any mutual funds with exit loads, especially long-term investors, as they can incur penalties for selling before a certain period.
What is the speaker's strategy for investing in small-cap mutual funds?
-The speaker invests in small-cap mutual funds with a long-term perspective, expecting high returns but also acknowledging the associated risks and the need for a balanced approach.
How does the speaker approach the selection of mutual funds based on age and income?
-The speaker suggests a strategy based on age and income brackets, recommending different allocations to equity investments, with a focus on diversification across large-cap, mid-cap, and small-cap funds.
What is the speaker's approach to investing in mutual funds for long-term financial goals?
-The speaker emphasizes a long-term investment horizon, suggesting that one should invest in mutual funds that have shown consistent returns over a period of 10 to 15 years, considering factors like risk tolerance and financial goals.
What is the role of 'momentum strategy' in the speaker's investment approach?
-The momentum strategy involves investing in stocks that are rising in price with the expectation that they will continue to rise before they start to fall. The speaker invests in mutual funds that follow this strategy, aiming for short-term gains.
How does the speaker evaluate the performance of mutual funds?
-The speaker evaluates mutual funds based on their historical performance over different time frames, their expense ratios, and the size of the assets they manage, as well as the funds' investment strategies and risk profiles.
What advice does the speaker give regarding the diversification of investments?
-The speaker advises diversifying investments across different types of mutual funds, such as large-cap, mid-cap, and small-cap, to balance risk and returns, and tailors this advice based on the investor's age and income.

Outlines

00:00

🤔 Personalized Mutual Fund Strategy

The speaker emphasizes the importance of creating a personalized mutual fund strategy based on one's age and income. They caution against blindly following someone else's investment choices, as individual risk tolerance, financial goals, and needs vary. The speaker shares their own mutual fund investments as examples, including small-cap funds, and discusses the significant returns they've seen. They stress the importance of doing one's homework and making informed decisions based on personal financial context rather than relying on recommendations.

05:01

📈 Investing in Momentum and Small-Cap Strategies

The speaker discusses their investment approach in small-cap funds and momentum strategy. They explain the concept of momentum investing, where they invest in stocks that are rising in price with the expectation that they will continue to rise before they start to fall. The speaker mentions specific funds they have invested in, such as the 'Weekend Investing' and 'Capital Mind' momentum funds, and shares their returns. They also touch upon their strategy of investing in growth at a fair price and the importance of not picking individual stocks without expertise, instead focusing on mutual funds and portfolios.

10:03

💼 Tailoring Investment Strategy Based on Age and Income

The speaker provides a detailed guide on how to allocate investments among different categories like Nifty 50, mid-cap, and small-cap based on one's age and income. They suggest different percentages of equity investment for individuals in their 20s, 30s, and 40s with varying income levels, from less than 3 lakhs to over 9 lakhs per year. The speaker advises a more aggressive investment strategy for younger individuals with lower incomes and a more conservative approach for those with higher incomes or who are older, ensuring a balance between risk and return.

Mindmap

Keywords

💡Mutual Funds

Mutual funds are investment vehicles that pool money from many investors to invest in a diversified portfolio of stocks, bonds, or other securities. In the video, the speaker discusses their personal experience with mutual funds, emphasizing the importance of not blindly following others' choices and considering one's own financial situation and risk appetite.

💡Risk Appetite

Risk appetite refers to an individual's willingness to take risks in the pursuit of higher investment returns. The video mentions that the speaker's risk appetite is different from others, highlighting the need for personalization when selecting mutual funds.

💡Personal Finance

Personal finance encompasses the various financial aspects of an individual's life, including budgeting, saving, investing, and planning for retirement. The video script stresses the importance of personal finance education and making informed decisions based on one's age, income, and financial goals.

💡Small Cap Funds

Small cap funds invest in companies with a relatively small market capitalization, which can offer higher growth potential but also come with higher risk. The speaker mentions investing in small cap funds like 'Axis Small Cap Fund' and discusses the returns and risks associated with such investments.

💡Return on Investment (ROI)

Return on investment (ROI) is a metric used to evaluate the efficiency of an investment, comparing the gain or loss from the investment relative to its cost. The video provides examples of ROI from different mutual funds, such as '32%' annualized returns, to illustrate the performance of the speaker's investments.

💡Parag Parikh Long Term Equity Fund

Parag Parikh Long Term Equity Fund is a specific mutual fund mentioned in the script known for its diversified investments across global and Indian markets. The speaker discusses the fund's performance and its relevance to a long-term investment strategy.

💡Expense Ratio

The expense ratio is the annual fee that all mutual funds charge their shareholders, expressed as a percentage of the fund's average net assets. The video mentions the importance of considering the expense ratio when choosing mutual funds, as it impacts the overall returns.

💡Exit Load

An exit load is a fee charged by a mutual fund when an investor sells shares before a specified period. The speaker in the video advises avoiding mutual funds with high exit loads, as they can significantly reduce investment returns.

💡Investment Strategy

An investment strategy outlines a set of rules or guidelines for making investment decisions to achieve specific financial goals. The video provides insights into the speaker's investment strategy, including the selection of mutual funds based on return expectations, risk tolerance, and investment horizon.

💡Asset Allocation

Asset allocation is the process of dividing investment funds among different asset classes, such as equities, bonds, and cash, to optimize returns and manage risk. The script discusses how asset allocation should be tailored to an individual's age and income level, with different percentages allocated to large-cap, mid-cap, and small-cap funds.

💡Momentum Strategy

Momentum strategy is an investment approach that focuses on stocks that have shown high price movement over a certain period, with the expectation that the trend will continue. The speaker mentions investing in mutual funds that follow a momentum strategy, such as 'Weekend Investing' and 'CapitalMind Momentum,' to capitalize on such trends.

💡Growth at a Fair Price

Growth at a fair price is an investment philosophy that seeks to invest in companies that are growing at a reasonable valuation. The video script mentions a mutual fund 'Growth at a Fair Price' that the speaker finds appealing due to its balanced approach to investing.

💡Portfolio Management

Portfolio management involves the management of a pool of investments to meet defined objectives. The speaker in the video discusses the importance of portfolio management in achieving diversification and managing risk, mentioning that they do not pick individual stocks but rather invest in portfolios through mutual funds or PMS.

Highlights

Personalized investment approach is crucial as what works for the speaker may not work for others due to different risk appetites, financial goals, and cash flow needs.

The speaker emphasizes the importance of doing one's own homework before choosing mutual funds rather than blindly following others' recommendations.

The speaker shares their personal mutual fund investments, including small cap funds, as they are a long-term investor and does not need money for 5-20 years.

Small cap funds have provided the best returns in the long term according to the speaker's experience.

The speaker discusses the annualized returns of their small cap funds, with one fund showing an exceptionally high return of 32% which they acknowledge as unrealistic.

The speaker predicts a major correction in small cap funds in the next 1-2 years due to the massive inflow of money in the past 2-3 years.

Parag Parikh Long Term Equity Fund is highlighted as a good option for those who want to invest in a diversified portfolio with a reasonable return of 20.9%.

The speaker mentions the importance of considering the expense ratio and exit load of mutual funds, aiming to avoid those with high charges.

The speaker's investment strategy involves a mix of large cap, mid cap, and small cap funds, with a preference for balanced funds for long-term stability.

The speaker discusses their investment in small case value pick funds and their strategy of investing in stocks with momentum before they start to fall.

The speaker mentions their investment in specific mutual funds like Weekend Investing's M1M and Capital Mind's Momentum, with reasonable returns.

The speaker advises against investing in individual stocks unless one is a specialist, as they focus on investing in portfolios managed by professionals.

The speaker's criteria for selecting mutual funds include long-term returns, AUM (assets under management), expense ratio, and no exit load.

The speaker provides a detailed strategy for allocating investments based on age and income, with a focus on equity for those in their 20s and 30s.

For those in their 40s, the speaker suggests a more conservative investment approach, focusing on large cap funds for stability.

The speaker emphasizes the importance of evaluating a mutual fund's performance over 3, 5, and 10 years rather than just the 1-year return.

The speaker's book 'Make Epic Money' is mentioned, which aims to teach essential financial concepts in a simple and honest way.