Finfluencer Akshat Shrivastava has highlighted a recurring investment mistake that he says traps a large number of retail investors—jumping into mutual funds only after they have delivered historic returns, and then getting disappointed when performance cools off.
In a post on X, Shrivastava broke down the typical cycle many investors fall into. According to him, the pattern begins when people spot a fund that has delivered strong historical returns. Excited by past performance, they invest in it—often at a time when the fund’s assets under management (AUM) have already ballooned.
As the AUM grows rapidly, generating the same level of returns becomes harder for fund managers. “So you see below-average returns,” he explained.
This often leads investors to question their decision and eventually switch to another fund that is currently showing high returns. But the cycle repeats, leaving them with sub-par results again.
After going through this back-and-forth multiple times, Shrivastava joked that many eventually give up and “decide to move to real estate/gold — and end the pain.”
He was replying to Helios Capital Founder Samir Arora’s take on India’s SIP boom. Arora claimed in his post that people are still doing dollar cost averaging, but just doing it in different funds.
“Total number of mutual fund investors in India is about 5 crores so obviously it cannot be the case that 5 crore new SIP investors came in and 4 crore old investors stopped. It must be the same investors moving from one fund to another, starting SIP in new, better funds and stopping in some older, poorer-performing funds ( as they should). People are not dumb- they are still doing dollar cost averaging, but just doing them in different funds may be,” Samir Arora said in his post.