Top performing financial behaviour!

I recently received a WhatsApp message from one of my clients (Gen Y). She intended to make some investments.

She: Please recommend some top-performing funds.

(actually, this is a fundamentally wrong question asking for top-performing funds)

Me: Time horizon?

She: What's that?

Me: How long do you intend to stay invested?

She: Not sure! May be 2-3 years.

Me: Go with FD.

She: Why not MF or stocks?

Me: If you have a 5-year investment horizon, I recommend a balanced fund. Equity funds should be held for at least 10 years for best results.

She: Can I go with direct shares for 2-3 years instead?

Me: (I prefer to remain muted)

I'm still figuring out the following, which requires deep thinking.

* Is short-term investment (read trading) in the stock market an alternative to long-term MF investing?

* Will she be able to generate profit if she invests in direct equity with very little market exposure?

* Is the stock market a better place to put your short-term money?

* Are people aware of the distinction between investing and trading?

* Do people ever calculate the difference between the returns generated by short-term trading and the returns generated by long-term investing?

* Can they truly understand how greed and fear operate in this market all the time?

* Do we need top-performing funds or the top-performing financial behavior of the client?

* Do people really invest or speculate?

* Is it the market or the stock or the MF to blame, if you lose money?

Perhaps people are still unaware that in India, investing for the long term can earn more money than trading or speculating.