Why looking for the best fund or asset class is a waste of time: Zerodha's Nithin Kamath

Trying to pick the best mutual fund or asset class is often a waste of time and energy, Zerodha Founder and CEO Nithin Kamath said in a post on X. He advised investors to focus instead on maximising their earning potential.


Citing a study that found the best-performing investment accounts belonged to people who were either dead or had forgotten they had accounts, Kamath said the insight still holds true today.


"After 20+ years of being in the markets, one thing has become crystal clear to me: most investors should just invest in low-cost equity, debt, and gold index funds and do something useful with their lives. Trying to pick the "best fund" or "best asset class" is largely a waste of time and energy," Kamath on Friday said in a tweet.

He asked investors to focus on maximizing their returns potential rather than obsessing over finding best funds or stocks.

"What most investors don't realize is that they'd get far better returns by focusing on maximizing their earning potential rather than obsessing over picking the "best stocks and funds." The odds are stacked against them anyway," he said.

With this aim, Zerodha AMC launched Multi Asset Fund to give investors, exposure to large-cap and mid-cap equities, government bonds, and gold all in one place, Kamath added. "That's exactly why we launched the @ZerodhaAMC Multi Asset Fund. This single fund gives investors exposure to large-cap and mid-cap equities, government bonds, and gold all in one place. Investors don't have to worry about rebalancing, tax complications, or managing multiple investments," the tweet said.

Kamath also cited a famous study by Fidelity that found that their best-performing accounts belonged to people who were either dead or had forgotten they had accounts. The study was made up, but the point still stands.


Kamath is quite active on Twitter/X. He recently posted a clarification on his official twitter handle which said that investments in stocks, ETFs and direct mutual funds at Zerodha are free and the discount broker also does not take DP (Depository Participant) charges for mutual funds from its customers, Founder and CEO Nithin Kamath said in a tweet on Wednesday. The tweet came as clarification amid a barrage of queries directed at him by new customers on the fee issue.

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