Dear Friends, Have you any Mutual Fund in Your portfolio? If Yes, than very good, but if not and want to invest in Parag Parikh Long Term Equity Fund, than Please read this post carefully.
Parag Parikh Long Term Equity Fund is not providing dividend of their investors… but why? why they are not giving dividend? Details in below…
Parag Parikh Long Term Equity Fund Dividend Policy
We have not a dividend option because it is an unethical practice. Specially, when you are running a mutual fund.
What is a Mutual Fund…? You give us money to manage The NAV today is Rs 15, I give you Rs 2 back as Dividend… Next day, the NAV goes down to Rs. 13. Have we done anything? We’ve just given your money back. So, when you are expecting dividends coming out from mutual funds, don’t expect.
What we tell our client is and we tell all of you, that you give yourself a dividend. Because when you want some money, you redeem those shares is the same thing we giving dividend.
When we give you that option we are training you to be more judicious in your spending. and I will tell you about how this mental accounting works…
Rs 100 whether earned, whether found on the road or earned in the lottery, it has the same value. Because money is fungible. It has the same value.
But, human beings we accord different values to the same amount of money depending upon how it has been earned, the effort is taken to earn, the size of the money in question. So when we don’t give you a dividend.
Why… because when if you invest in fixed income security giving you 9% interest, then, when that interest is coming to you… you consider it as your earned money. because, before that you know that you will get 9% interest.
However, when a dividend comes to you, you don’t know, how much the quantum of the dividend would be. It can be 5%, 10%, 20%, 50%. So it is not sure how much it will come to you in your mental account
When a dividend comes to you, you will consider it as free money. So you are more likely to splurge on that money, rather than this.
So we tell you, you take yourself a dividend, if you require Rs 20,000, you will just redeem, may be less than 20 because that time you will consider that you should redeem or not. I think, more than giving you investor education lectures, I think it is better that we make you practice it, the hard way.
Read this also – MIRAE ASSET EMERGING BLUECHIP MUTUAL FUND REVIEW
Hope you found your answer, why Parag Parikh Long Term Equity Fund not giving dividend to their investors. For any query please write us in the comment section below.