Are you suffering from NAV Syndrome?

Are you investing in mutual funds recently? Do you have a lump sum to enter into equity as the market is down? Are you daily tracking the NAV and market to enter?

NAV Syndrome

NAV Syndrome – What is this?

There are few SPECIAL investors who by hook or crook wish they get the NAV of a particular day. They wish to time the market exactly like Olympic shooter targetting.

They forget that if the market starts to go up after your purchased order, then you end up in buying at higher NAV than yesterday.

Few did this mistake by placing the order when they saw market is downtrend around 10%. But due to high volatility in the market, that day ended positively.

In such a situation, those who placed the buying order feeling as if they lost everything šŸ™‚

Sometimes, if there are certain glitches at AMC end or the platforms they are using to investing, their frustration double. Because the market is down and they are rightly targeting the price by investing in lower NAV. But they feel unlucky that they are unable to invest just because there is a technical glitch.

Such investing in mutual funds by tracking NAV day and night is nothing but a NAV Syndrome.

Is this NAV Syndrome good or bad?

First thing you have to define yourself why you are investing and especially why you are entering into equity. If your goal is long term and did the proper asset allocation, then how today’s PERFECT NAV striking helpful for you?

Who knows on this earth that from the day you invest, the NAV will never go down again?

Timing the market with exact NAV on the exact day is foolish to act. Down the line, after 5 years or 10 years, you look back then you realize this that how foolish you are by addicted to this NAV syndrome and whether this CIRCUS benefited or not.

The problem of NAV Syndrome is not you. But the technology you have adopted to invest. You can watch the market level LIVE and within few seconds you can buy and sell the mutual funds online or with an app. Such facilities rather than creating peace of mind or convenience, they started to create such mental disorders among mutual fund investors.


18 thoughts on “Are you suffering from NAV Syndrome?”

  1. sir , can you tell about what are the timings on basis of which NAV are decided. I have checked my investment on friday evening after market closing and then i checked it in saturday when market is already closed but my mutual fund investment decreased by Rs5000. How the mutual fund value decreases even when markets are closed ?

  2. In early march market start falling . I have thought to book some profit( which ever i have) and sell out risky small cap mf even in loss to reduce risk of my portfolio. But just in a month one month one fourth of my actual investment wiped out (forget the return). No one know how will the pandemic go ahead so very difficult to take any decisions. I remained in investment considering my long term vision but pandemic changed everything.
    sir,Should i consider my personal cash credit limit as emergency fund or should i keep my some money in bank fd or saving account?

    1. Dear Reader,
      If you have done a proper asset allocation and you have long term view, then you no need to worry. Regarding emergency fund, keep your own fund rather than depending on CREDIT.

  3. Along with the Equity funds, most of the debt funds taken a huge hit including liquid and overnight funds in this market collapse. I am literally shocked that some of the active equity MFs lost even 60% as against 35% of market.

    With equity market returns of 2.5% over 10-14 year period, this crisis taught me one important lesson of respecting bank FDs, PPF, Post Office, Gold and RE. Catching equities while falling, continuing SIPs for very long term even at foregoing some pleasures and emergencies in life and trying to follow the market on daily basis to update oneself isn’t worth.

    1. Dear Krish,
      I adopted Index Funds over active funds. It is wrong to accept that they protect our money during the downfall. No product is RISK FREE. It is the art fo managing the risk we have to learn.

      1. FD in SBI, PPF, Post Office savings are absolutely risk free products due to GOI backup. If you account Mar’20 stock market performance, even INDEX funds doesn’t offer to beat FD returns on last 14 year of NIFTY . Just 7 trading sessions can change everything overnight wiping out 10 or 14 years of SIP returns. Equity is only for the guys between 20-40 yrs. Beyond 40, one would be better off with GOI schemes.

        1. Dear Krish,
          Your money in Bank is safe up to Rs.5 lakh. Only Post Office Schemes are safe. The money you are keeping in your savings account (whether in SBI or Post Office) is unsafe if someone hacked. Equity is for those who have PATIENCE and LONG TERM VIEW (more than 10 years). If both not there, then better to stick to debt. No harm in that.

  4. Rajinder Sachdeva

    Sir ji ye post to mere uppar hi hai ??? maine bhi jab 5% market down gaya tha tha nifty Mutual fund mein 20k invest kar diya. & Ab 2 weaks mein market 30% down ho gaya. So sad

  5. Sir,you have not stated any idea as to how one should act when the market is volatile and no body knows when to invest ? Please tell me what we should do in such market if we have to start investing.

  6. The issue is actually with fund houses. As an example, I bought Nifty index fund mutual funds from HDFC and SBI on the same day and almost same time. But next day I got my position in HDFC but in SBI it took 2 days. And as market is volatile my entry in SBI MF costed more NAV but I am profitable in HDFC fund.. what do you say about this?

    1. Dear Santosh,
      Check with SBI if they violated the rule of cut off timing. However, stop chasing this NAV syndrome. In long run after 10 years or 15 years, such marginal change in NAV hardly impact your returns.

  7. Alkesh Kumar Jain

    Sir, you are genius. You are not only investment advisor but also best person to know investor psychology precisely.

    You have written the same which I myself was doing before few years.

    But now I don’t care much about NAV and invest with my investment philosophy and style without bothering much about nav.

    Thank for this nice artical.

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