Dr. Mehra had just finished another 12-hour hospital shift when he glanced at a WhatsApp group chat, where one doctor shared an Investment scheme (Flexi cap Mutual fund) where he claimed he had made 18%. Half-tired and half-curious, he tapped the link, downloaded a new app, and invested ₹200000
Three months later, the fund dipped. Dr. Mehra panicked and withdrew the money. Another few weeks passed, and the market recovered — but by then, his money was sitting idle in his savings account again.
This isn’t a rare story. I hear versions of it almost every week from doctors across different specialties. They earn well and save sincerely, but when it comes to investing — especially in mutual funds — most are just winging it. There is no clear goal, strategy for selecting the schemes. And when you do not select well, you will panic soon.
The truth is, mutual funds can be a powerful tool for growing wealth — but only when chosen and reviewed with intent. Otherwise, it’s like prescribing random medicines because the packaging looks promising, or the story attached to it by the sales guy is enticing.
So let’s talk about how you, as a doctor, can make sense of mutual funds — even if finance isn’t your strong suit — and how you can build a portfolio that works for your goals, not against them. Know More: Property Investing for Doctors- Why Real Estate is Riskier than Equity?
Why Mutual Funds Even Make Sense for a Busy Doctor
If you’ve ever tried researching stocks or bonds after a 10-hour OPD, you’ll understand why most doctors don’t want to be stock pickers. There’s just no time. This is why mutual funds work so well for professionals like you — they let your money grow in the background while you focus on what you do best.
Think of mutual funds as specialists in your financial team. Just like you refer a patient to a cardiologist or neurologist, a mutual fund gives your money to a fund manager who specializes in navigating the financial markets.
But — and this is a big but — not every fund is created equal, and not every fund suits every doctor.
The Real Question Isn’t “Which Fund is Best?” — It’s “What’s Best for You?”
Let me tell you about another doctor — Dr. Asha, a 37-year-old pediatrician with two school-going kids and a dream of sending them abroad for higher studies. When we first reviewed her mutual fund portfolio, she had invested in five different equity mutual funds. All of them were aggressive mid- and small-cap schemes, selected purely on past returns.
The problem? Her goals were just five to seven years away. These kinds of funds are great for long-term growth, yes, but they’re also prone to sharp fluctuations. If the market takes a dip when she needed the money, she’d either have to sell at a loss or postpone her plans.
This is where most doctor-investors go wrong. They pick funds based on what’s performing well right now, not based on what they need or how much risk they can truly tolerate. There’s no alignment between the fund and the financial goal. (Read: Blood Pressure Check before making Investments)
And that’s exactly where the review process comes in.
How to Review and Select Mutual Funds — Like a Pro (Without Becoming One)
Let’s shift gears a bit. Imagine you’re reviewing a patient’s file — would you just look at their blood pressure for the day and decide everything’s fine? Or would you look at trends, history, the past response to medicines, and overall health?
Reviewing a mutual fund is the same. Instead of being swayed by recent one-year returns, ask: how has this fund done over 5 or 7 years? What have been the rolling returns in comparison to the Benchmark and industry peers? Look at risk-adjusted return ratios. Has it consistently performed better than other funds in its category? What’s the track record of the fund manager? Has the fund manager changed recently? What has been the investment strategy of this scheme? Can you map this fund to any of your goals? ( Also read : Financial Planning for Different Life Stages of Doctors )
One of my clients, Dr. Rajan, had an SIP running in a mid-cap fund for five years. On the surface, the fund’s 1-year return was negative. But when we dug deeper, it had comfortably outperformed the benchmark over a longer period. The fund had simply taken a temporary hit during a broader market correction — nothing fundamentally wrong. Instead of panicking, he stayed invested. That SIP is now back in profit — and then some.
The takeaway here is simple: don’t react to noise. Review your funds like you review long-term treatment, not just based on how things look this month.
A Word About Tax — Because It’s Different Now
Some doctors tend to make investment decisions purely from a taxation point of view. Tax savings weigh so heavily on their minds that they don’t hesitate to invest in low-yield insurance policies — even in the names of their children — as long as there’s a tax benefit attached.
But in recent years, tax laws have become more unpredictable than the stock markets themselves. At one point, it almost felt easier to understand stocks than to keep up with the ever-changing Indian tax rules!
That said, while debt mutual funds have now become fully taxable, they still hold an edge over fixed deposits due to their capital gains structure, which can offer some flexibility and efficiency. Hybrid funds may also be considered for their relatively favorable tax treatment, though they can be significantly more volatile compared to traditional debt products.
As for ELSS (Equity Linked Savings Schemes), they’ve lost much of their relevance in tax planning under the new tax regime, no matter how impressive their past returns might look.
Think of taxes as one part of the equation, not the whole game.
It’s about a Portfolio, not a Single Investment
You don’t invest in a single Scheme, but slowly build a portfolio of Multiple schemes. It’s not only a Mutual fund, but you also have traditional products like PPF, Sukanya, FDs, NPS, PMS, or more. So, how are these products and multiple schemes of Mutual funds interacting with each other? What role are they playing in your portfolio? Are they adding diversification or complexity? While it is important to select the right mutual funds, it is equally important to have the right mix of products in your overall portfolio. Adding investments just for the sake of it will not serve any purpose.
Be clear of your Asset Allocation, the overlap between different schemes, the strategies they follow, the universe they select the base investments, and many more such things you need to be watchful of.
While adding a new scheme in a portfolio, do answer – What this new one will do that the current one’s are not?
That’s progress. Knowing when not to act is just as important as knowing when to act.
Mutual Fund Review and Selection Strategies – So, What Should You Do Next?
If you’re still reading this, chances are you care about your money and want to do better, but you just don’t have the time to decode it all. And that’s okay. You don’t need to become a financial expert. But you do need to treat your money like your own practice — with care, regular attention, and the right team.
Start by aligning your funds with your goals. Keep it simple. Review once or at most twice a year. Focus on long-term consistency rather than quick returns.
And if you ever feel overwhelmed, just like your patients come to you for clarity and reassurance, don’t hesitate to seek help. A financial planner who understands the unique pressures and dreams of doctors can help you build not just a portfolio, but a plan for peace of mind. (Read: How doctors should choose a financial Advisor in India?)
Because you’ve already worked hard for your money. It’s time your money started working just as hard for you.
