The Mutual Fund industry has a big reason to feel good about itself. It has managed to persuade SEBI, Securities and Exchange Board of India, the regulator for the securities market in India, to allow celebrities to endorse and advertise Mutual Funds.
Yes, SEBI has allowed celebrities to endorse mutual funds. Soon your favorite filmstars, cricketers, badminton players and other sport stars, could be endorsing mutual funds. Imagine your favorite cricketer asking you to invest in a mutual fund? Now to the big question? Should you invest in a mutual fund, just because your favorite actress or cricketer asks you to do so?
It’s your hard earned money. Invest it wisely. In this article you will learn if it is a good idea to blindly buy mutual funds, just because they are endorsed by celebrities. Want to know more on mutual funds? Just leave a missed call on IndianMoney.com financial education helpline 02261816111 or just post a request on IndianMoney.com website. IndianMoney.com offers Free, Unbiased and on-call financial advice on Insurance, Mutual Funds, Real Estate, Loans, Bank Accounts and Capital markets.
Your favorite cricketer or actress endorses a mutual fund, asking you to invest in it. This celebrity tells you the benefits of this mutual fund investment and why you should invest in it. He/She also asks you to tell your family and friends to invest in this mutual fund.
You love, admire and imitate your favorite celebrity. All he/she wants you to do is invest in a mutual fund. You love doing what your favorite celebrity does because it raises your confidence levels and you get the feeling…you’re living the good life. If a great celebrity is investing in this mutual fund, it has to be good. After all….a great celebrity is asking you to invest in a great product.
Before I answer this question, let me ask you a question. Why do you invest in a mutual fund? Simple….You want to buy a car or go on a trip abroad. This is your goal. When you invest your money to achieve this goal, it becomes a financial goal. Your needs are unique and your friends/celebrities financial goals, are not your financial goals. You might need to invest in a mutual fund, while your friend might not need to invest in a mutual friend.
You invest in a mutual fund to get good returns and help you achieve your financial goals. Investing in a mutual fund is not like buying a mass produced product, where all features are the same. The returns you get from a mutual fund, depend on the type of mutual fund (debt or equity or hybrid), time you stay invested and the market conditions experienced during the time you stay invested.
How the fund manager performs is very important. For those who don’t know, a fund manager manages the money you invest in a mutual fund. What do you understand from this? The mutual fund endorsed by your favorite celebrity, might be good for him. Not for you.
The first rule many celebrities follow…Understand the product thoroughly and who sells it. A good celebrity does his homework, before endorsing a product. Unfortunately when it comes to financial products like mutual funds, some celebrities do not understand them well. A celebrity might endorse a mutual fund, just because he gets an endorsement fee.
Just as good celebrities thoroughly check a product before endorsing it, you must do your research, before investing in a mutual fund. Invest in a mutual fund only after understanding the risk it bears and if it matches your financial goals and needs. So love your favorite celebrity from your heart….But…Invest in a mutual fund with your mind.
Yes, SEBI has allowed celebrities to endorse mutual funds. Soon you will find your favorite celebrity, endorsing mutual funds. The mutual fund endorsed, might be very good. You still must do your research, before investing in it. After all it’s your hard earned money. Be Wise, Get Rich.
Mr C.S.Sudheer is a management graduate. He started his career with ICICI Prudential Life Insurance and later on worked with Howden India. After his brief stint in Howden India, he moved on and incorporated Suvision Holdings Pvt Ltd which is the sole promoter of IndianMoney.com. He aims to build a nation that is financially literate with investment savvy citizens.