If You're So Smart, Why Aren't You Rich?
Investment Returns Vs Investor returns
It’s said that Prashant Jain’s HDFC equity fund has given a return of more than 25% per annum in last 25 years. To put that number in perspective, Rs. 10,000 invested in HDFC equity fund at the beginning would turn into more than Rs. 26 lakhs in 25 years.
Unfortunately, only 2% of the investors who have invested in that fund have realised that return. Why?
Because only 2% of the investors have stuck on to the fund for 25 years. For other 98%, they have danced in and out of the fund.
Investment returns and Investor returns are almost always different.
An investor earns the investment return if he stays invested. Buying and then just staying put. But most people rarely invest this way. They chase performance and invest by looking in the rearview mirror.
Investor behaviour matters. It matters more than skill. More than knowledge. More than luck.