The way the financial industry works today, everything has been made extremely complex. There are over 3500+ mutual fund schemes in India with multiple classifications (equity funds - small/ mid/ large-cap, hybrid funds, ETFs, sectoral funds, debt funds – short duration/ medium duration/ liquid, etc. and the list is tedious and exasperating.)
To top it all, there is the option to directly invest in over 5000+ equities in India, US stocks, and then options, futures, and derivatives, hedge funds, etc. It can be unending.
Even people with a financial background struggle to understand all these concepts.
It is but obvious that a common non-financial savvy investor gets completely lost in this myriad of investment options, and ends up making the wrong investment decisions. The problem worsens when the financial intermediaries pursue their own vested interests, by pushing the wrong products to the investors and play on their fear of missing out.
A typical investor ends up investing in so many different instruments with so much unnecessary diversification that the portfolio becomes fully diluted and the potential for generating any meaningful returns is completely lost. Buying Index funds is one prime example of this.
We at Finacular strongly believe that one does not need to understand all these financial jargons and it is possible to build wealth by investing in very few but extremely high-quality simply equity investments. These could either be equity mutual funds which are widely available in India and accessible to all retail investors or directly investing in equities as well.