From My Desk
Date	03-May-2014
Subject	Busting common Investor myths on money matters - Series 2
Details	"I can pick winning stocks, so why should I buy a fund?" Individuals will not be able to beat a fund manager in the long run. WHEN MARKETS are on an upswing, as they are right now, everybody becomes an expert. Even newbies start behaving like stock analysts, and why not? The stock market has the potential to deliver huge returns and, therefore, many newbie investors try their hand at stock picking. Many also end up burning their fingers, but that doesn't stop them from trying again. If they manage to earn good returns in the first instance, it is enough to convince them that they have the required expertise. It encourages them to hunt for more such stocks. However, the stock market often proves to be a great leveller and small investors usually end up with losses. There is no harm in trying your hand at this game, but do so in a cautious manner. Do not get carried away by a few good stock picks.It might be due to pure dumb luck. Mutual funds provide a much more convenient route to investing in equities. Though there is no guarantee that a mutual fund will not lose money, its diversified portfolio and the expertise of professional managers will ensure your investment does not fall off the cliff. Yet, small investors continue to buy stocks directly because it makes them feel as if they are in control. As one expert has said, if your direct investments in stocks are able to beat the returns of a mutual fund over the long term, you are in the wrong profession.
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