Riya: Shyam, I don’t get it. I was conversing with one of my colleagues when she showed her mutual fund statement to prove a point. Her fund made a staggering annualized 17% return while my returns from the same fund just yielded 9.2%. How is that even possible?
Shyam (smiling): Ah, great question, Riya! It’s actually very common. It’s not the fund’s fault — it’s usually because of how people behave while investing.
Riya: Behavior? What do you mean?
Shyam: Let me explain with a real story. You’ve heard of the Great Peter Lynch, right? He managed the Fidelity Magellan Fund back in the day.
Riya: Yeah, I’ve heard his name. Big investing guy?
Shyam: Exactly! Under Lynch, the Magellan Fund gave an average return of around 29% a year — truly amazing. But guess what? The average investor in that fund made only about 7%–8% per year.
Riya (surprised): Wait, what?! That’s such a big gap!
Shyam: Yes! And it happened because people behaved emotionally.
They would jump into the fund after it had a great year — when prices were already high.
Then, when the markets dipped, they got scared and pulled their money out — locking in losses.
Riya: Ohh… So basically, they were buying high and selling low?
Shyam: Exactly! Instead of staying invested, they kept reacting to short-term ups and downs.
Peter Lynch himself used to say, “The key to making money in stocks is not to get scared out of them.”
Riya (nodding):Makes sense. So even if a fund is performing well, if I mess up my timing, my returns will suffer?
Shyam: Spot on, Riya.
It’s not just about which fund you invest in. It’s about how you behave while investing.
Consistency and patience are way more powerful than chasing returns.
Riya:Wow. That’s a real eye-opener. So what’s the trick to staying calm and not panicking?
Shyam (smiling): I’ll teach you a simple mindset trick. Want to hear it?
Riya:Of course! Tell me the trick, Shyam.
Shyam (leaning in, smiling): Alright, here it is.
Invest with the mindset that you’re planting a tree, not flipping a coin.
Riya (curious): Planting a tree? How does that help?
Shyam: Think about it.
When you plant a tree, you don’t dig it up every month to check if it’s growing faster, right?
You water it regularly, give it sunlight, and trust the process.
Similarly, when you invest, you should stay patient, keep adding bit by bit — like watering your investment — and give it time to grow.
Riya (smiling): That’s such a lovely way to think about it.
Shyam: Exactly.
If you focus on the long term and ignore the short-term noise, you automatically avoid the mistakes that cause poor investor returns — like panic selling or chasing trends.
Riya: So basically, behave like a calm gardener, not an anxious trader?
Shyam (laughing): Perfectly said!
Think about other things in life too —
- You don’t abandon your studies just because one exam went bad.
- You don’t uproot a mango sapling just because it didn’t give fruit in the first season!
Riya (laughing): True! If I had judged my cooking skills by my first few disasters in the kitchen, I would’ve given up on cooking altogether!
Shyam (smiling): Exactly! Good things — investments, skills, health, relationships — all grow with patience, consistent effort, and time. It’s the same magic formula everywhere.
Riya (nodding thoughtfully): Thanks, Shyam. I think I just became a tree planter today! 🌳
Shyam (raising his coffee cup): Cheers to that! Here’s to patience, prosperity, and mango trees bearing sweet fruits! 🍋
Simplified Money Talks 