RUTU CHHABRIA
The Financial Express: Sunday, December 11, 2005 In the cult film "Wall Street", the character Gordon Gekko famously said "Greed is good." A booming market brings in fear as well as greed. It is also a time when investors don't want to miss any chance of making quick returns in the equity markets. And in such a scenario they opt for investments in mutual funds. Mutual funds, on the other hand, are leaving no stone unturned to sell their schemes to the retail investor. So who came first, the confused investor or the upbeat mutual funds? All in all, the greed and fear story is applicable to most aspects of life and to the markets specifically. Greed drives people to go for high returns and fear drives them to go for lower risks. But getting a good ratio of greed and fear is not easy. Better still, be greedy in a falling market and fearful in a rising one. Or take the easy way out. Invest in a mutual fund and have someone to blame if things don't go your way. Understanding greed and fear is not easy. Ask William Sharpe, who worked on risk and return for most of his life but never could quantify greed and fear.
The Financial Express: Sunday, December 11, 2005 In the cult film "Wall Street", the character Gordon Gekko famously said "Greed is good." A booming market brings in fear as well as greed. It is also a time when investors don't want to miss any chance of making quick returns in the equity markets. And in such a scenario they opt for investments in mutual funds. Mutual funds, on the other hand, are leaving no stone unturned to sell their schemes to the retail investor. So who came first, the confused investor or the upbeat mutual funds? All in all, the greed and fear story is applicable to most aspects of life and to the markets specifically. Greed drives people to go for high returns and fear drives them to go for lower risks. But getting a good ratio of greed and fear is not easy. Better still, be greedy in a falling market and fearful in a rising one. Or take the easy way out. Invest in a mutual fund and have someone to blame if things don't go your way. Understanding greed and fear is not easy. Ask William Sharpe, who worked on risk and return for most of his life but never could quantify greed and fear.
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