How a businessman in his 50s went gung-ho on MFs

From telecom retail to mutual fund: SIPs have bridged Singh's post-covid business slowdown

- Aprajita Sharma

A businessman can either redeploy funds in his own business or invest in some other business by investing in the stock market. The latter option is hardly considered. Arvinder Singh, 56, who runs a retail business (telecom equipment and electric two-wheelers) in Delhi, faced the same dilemma. However, a chance meeting with a financial professional at a get-together influenced him deeply. He decided to test the waters, that too when he was just turning 50.

He started investing in equities via mutual funds in 2018, and has since not looked back. His mutual fund portfolio has maintained a compounded annual growth rate (CAGR) of 18%. "I started small with a systematic investment plan (SIP) of ₹25,000 per month. I could see early signs of the portfolio growing within a year, but the real magic happened in 2021 onwards. While margins in my business were much better than mutual funds could offer, these dwindled after the covid outbreak. "There was a need to make up for the drop in business margins," Singh said.

The mutual fund magic Manmeet Singh Khurana, a certified financial planner and founder of Wealth Dopes, was working as a product head at ICICI Securities when he got Singh to invest in mutual funds. Singh asked him to analyze his overall financial planning when he started his own venture. Year one after 2018 was lucrative for his mutual fund portfolio, but year two brought along the covid-19 shocker when the markets tanked nearly 30% in March 2020. It turned out to be a positive learning experience.

"I was more concerned about my primary business when covid-19 happened. My mutual fund investments incurred losses, but it did not bother me because only profits were gone. The principal was safe. When markets revived in 2021, I could see firsthand consistently investing through SIPs had helped. Now, I invest some lump-sum amount whenever markets show some weakness. I did that just last week, too," Singh said.