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Warren Buffett’s advice for you and me: Stick to good quality mutual funds

Gautam Chikermane’s tweets

What if as investors we can’t study businesses, make cash flow forecasts and evaluate risks around businesses? “I have good news for these non-professionals,” Buffett says. “The typical investor doesn’t need this skill. In aggregate, American business has done wonderfully over time and will continue to do so (though, most assuredly, in unpredictable fits and starts).”
What does that mean? It means we use vehicles like mutual funds to allow our money to grow. It means we do not track them every day or quarter but do an annual review to see whether our funds are on the right track compared to the broader market. And stay invested.
Indian mutual funds have delivered returns of 18-22 percent over 20 years. So, a one-time investment of Rs 1 lakh in 1993 is worth Rs 27 lakh to Rs 38 lakh today. And if you were a regular investor, diligently putting in Rs 1 lakh every year, that investment would be worth anything between Rs 1.46 crore to Rs 2.38 crore.
My column in Firstbiz

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