With RBI's recent measures to control Rupee depreciation and Mr.Bernanke's announcement on pulling the brakes on its stimulus programme has caught duration fund managers as well investor on the wrong foot.
Untill last month every major financial daily propogated the wisdom of putting tons of money in "safe" debt funds. Banks were also happy to tie up with mutual funds to propogate the safety of debt funds. All they had to do is to convince investors that the RBI's move in the next monetary policy was a rate cut. When equity was facing redemption pressure, inflows to debt touched record highs.
Logically, RBI should have cut down interest rate to support growth when WPI has gone down substantially. But future has habit to defy logics in an economy.
As an investor we can't control Fiscal Deficit, Current account deficit, WPI, CPI , Interest rates, GDP,Real Estate prices, Gold prices, Forex movement, or for that matter Mr.Bernanke or Mr.Subbarao,but for sure we can have control over our investment and our needs.
It is said "In investment you can make more returns by knowing what not do instead of what to do" and you need someone qualified to advise you on what not to do.
Recently regulator allowed investor to invest in direct mode by bypassing the advisor, but situation like this justifies worth of professional advise. like they say "Professional advise comes at a price without it you pay a much higher price."
There was a time when limited investment options were available but now it comes with lots of options and now also in lot of colors (With SEBI's latest regulation of color coding of the funds) and you never know the fund with color Blue which denotes low risk can give you negative returns to the extent of 6-8% in one month.Time has gone of taking decision on the basis of your friend or neighbors advise.
Like Warren Buffet says "Investment is the only place that people ride to in a Rolls Royce to get advice from those who take the subway."
Need of professional is always proved in adverse situation. A Financial advisor can help you in assessing your needs and advises investment depending on your need and risk profile instead of running behind the performance chart shown by news paper or some research sights.
So next time think twice before making investment on DIY basis.