1. Ignoring Market Timing
Investing during market peaks can erode returns:
Example Scenario
₹12,00,000 invested at market high (15% overvaluation):
Actual Returns: ₹34.75L vs Expected ₹46.75L
Our Solution
Use our lumpsum return calculator with historical average rates
2. Tax Miscalculations
Forgetting 20% LTCG tax on gains >₹1 lakh:
Example
₹50L investment @12% for 10Y:
Gross: ₹1.55Cr
Post-Tax: ₹1.53Cr (₹20L tax on ₹55L gains)
Tip
Our lumpsum mutual fund calculator auto-deducts taxes
3. Over-Diversification
Spreading investments too thin reduces compounding power:
| Strategy | 1 Fund @12% | 5 Funds @Avg 10% |
|---|---|---|
| ₹12L for 12Y | ₹46.75L | ₹35.64L |
Best Practice
Focus on 2-3 quality funds using our mutual fund calculator lumpsum
4. Emotional Decision-Making
Panic withdrawals during market dips cost investors:
Scenario Analysis
₹12L invested in 2020 crash @12% recovery:
Hold for 5Y: ₹21.15L
Panic sell at 20% loss: ₹9.6L permanent loss
Our Tool's Help
Use the lumpsum calculator to simulate different holding periods
5. Not Using Calculators
Manual calculations lead to errors:
Common Error
Incorrect 12% vs 12.5% rate assumption:
₹12L for 12Y difference: ₹46,752 vs ₹50,208
Solution
Use our lumpsum investment calculator for precise projections
Important Notes
- Examples use historical averages
- Not financial advice
- Consult SEBI-registered advisors