When media houses start behaving like finfluencers
What happens when #Media houses start behaving like #finfluencers?
Came across this headline on #Moneycontrol:
“Save nearly ₹1 Cr in taxes on a ₹5 Cr retirement corpus…”
Naturally, it grabs attention.
I thought, maybe there’s a nuanced strategy worth learning.
But digging deeper, the comparison was between #FD returns and #Arbitrage #MutualFunds
And here’s the problem: Arbitrage fund returns were projected as fixed return instruments (7% constant throughout)!
In reality, Arbitrage funds:
- Don’t offer fixed returns
- Depend on market spreads
- Returns fluctuate with liquidity & volatility
- And as markets mature, Arbitrage opportunities typically reduce, thus reducing the returns!
- A dip in returns during the initial days can create havoc in the Retirement plan
When such comparisons are made, they create a false sense of predictability, which is not the case.
Real Returns in Arbitrage Funds over different timeframes -
- 1-Year Returns: Top funds show performance between 6.5% and 7.2%
- 3-Year Returns: Top funds have delivered roughly 5.8% to 7.7% CAGR
- 5-Year Returns: Top funds have averaged between 5.9% and 6.2% CAGR
The bigger issue is when content is driven by #Eyeballs over #Accuracy, Nuance is the first casualty.
And the risk? Readers trust the source and may not question the assumptions!
What should change?
If an article promotes a product or is sponsored, it should be clearly disclosed! This would help readers make an informed decision.
Always remember, not everything that “sounds smart” is actually suitable.
Especially in #RetirementPlanning: Predictability matters more than optimization!
#MoneyMinusNoise #PortfolioManagement #Clickbaits #Money #Investments #Taxes