How Much Returns will I get?

A new investor recently met me and asked, "how much returns he will get if he invests a certain amount of money in mutual funds".

I told him it depends on him, not me. And he was quite amused as he thought I should know because I am the person who will suggest to him the right investment products which can yield good returns.

I explained to him that the investment world is dynamic and things change from time to time. Sometimes, there is euphoria in the marketplace, and yet there are times when everything seems to be going down. If you follow asset allocation, and stay disciplined in your investment journey you can expect a better return. However, if you get excited or panic with every news (good or bad), it could affect the portfolio negatively. The right product does matter but it is the investor behavior that is the key to investment returns.

Finally, I told him, "Mileage depends on the driver, not just the car. The smoother you drive, the higher the mileage would be."

Source: Forward