We have started the Fun & Finance series with an aim to make finance more fun and relatable via short 1 min stories by using fables or interaction with customers etc. We will try our best to help you learn something new in finance via these short stories.
The Dogs & The Skins
In a village far away, four dogs were starving, and then one of them saw some skins at the bottom of a river.
A local Tanner had put those animal skins for soaking in the stream. The Dogs agreed that fine skins will be a delicious meal.
But the water was deep and dogs could not reach the skins from the bank. So they held a council.
The council unanimously decided that the very best thing to do was to drink up the river.
All of them started drinking as fast as they could. They drank and drank, but one after the other all of them had burst with drinking water.
For all their effort, the water in the river remained as high as ever.
Do not try to do impossible things.
The above-mentioned dogs were blinded by their hunger and tried to drink the river which is impossible.
Likewise, perfectly timing the stock market is impossible. But we try to time markets due to our hunger for more.
All of us would like to earn some extra money on the side. And in current times, we do not think that greed is a sin anymore. Greed is good.
Our money is supposed to work for us and not the other way around.
Even big financial institutions are not able to time markets perfectly even with all their expertise and tools.
So, let’s not attempt the impossible task of timing the market perfectly to start investing. If you do so, you may end-up with no investment at all.
The strategy to follow is to gradually invest in stock markets and mutual funds, especially when the markets have crashed.
At RefreshMint, we have assessed the top mutual fund investments on various factors like fund manager’s track record, previous returns, and the excess return over the market.
To get more insights about investing, email us and we will be happy to help you.