The Tortoise and the Hare: How Ramesh & Vikram’s Investing Journeys Diverged

The Background

In 2018, two childhood friends—Ramesh (the Cautious Planner) and Vikram (the Stock Market Gambler)—each inherited ₹10 lakhs. Both aimed to grow their wealth, but with very different strategies.

Ramesh’s Approach: The Mutual Fund Route

• Strategy: Invested ₹10L in a diversified equity mutual fund (large & mid-cap mix).

• Habits:

  • SIP of ₹20,000/month (disciplined investing)

  • Held for 5 years without panic-selling

  • Rebalanced annually

Result (2023):
✅ Portfolio Value: ₹18.7 lakhs (~13% annualized)
✅ No emotional stress during market crashes
✅ Outperformed FD returns by 2X

Vikram’s Approach: The Stock Picker

• Strategy: Handpicked "sure-win" stocks:

  • Yes Bank ("Cheap after the fall!")

  • DHFL ("High dividends!")

  • Jet Airways ("It’ll bounce back!")

• Habits:

  • Traded frequently (reacting to news)

  • Held losers hoping for rebounds

  • Ignored diversification

Result (2023):
❌ Yes Bank: -95% (₹5L → ₹25k)
❌ DHFL: Went bankrupt (₹3L → ₹0)
❌ Jet Airways: Delisted (₹2L → ₹0)
💸 Net Portfolio: ₹2.5 lakhs (75% loss)

The Lesson

1. Mutual Funds

   • Reduce single-stock risk (Vikram’s downfall)

   • Survive volatility (Ramesh slept peacefully in 2020 crash)

   • Win long-term (even with mediocre funds)

2. Stock Picking

   • Requires skill + luck (Vikram had neither)

   • Emotional toll (stress, regret, sleepless nights)

Real Data to Prove It

• S&P Indices vs Active (SPIVA): 85% of Indian stock pickers underperform benchmarks over 5 years.

• SEBI Study (2022): The average equity MF investor earned +12% CAGR vs. direct stock traders’ +3%.

One Question for You

If Vikram had simply invested in a Nifty 50 index fund, he’d have ₹19L today.
Why do most still gamble on stocks?