If you had invested last year in NIFTY, your portfolio would be DOWN by 1%.
If you had invested last year in NIFTY, your portfolio would be DOWN by 1%.
This is probably the first time many investors are seeing prolonged weak markets.
This is where mind starts playing with us.
- You start comparing the returns with FD and say at least I would have made 7%
- Let me stop my SIP?
- Can I redeem now and at least save some capital
- Let me move out of the portfolio when it turns green and invest later
Now let’s assume you did all the above last time when market gave NEGATIVE one year return of 6% in 2022.
- 1 year return post the fall was 15%
- 2-year returns post the fall was 20.5% (CAGR)
- 11% was your return since inception (2021) including the negative return year
I have not even added the impact of increasing SIP during this time. There is no FD or Debt investment that could match this return.
Equity by nature is volatile and is bound to see big negative and positive returns. Hence it's important to stay the course and invest only if the holding period is 3 years or above.
If you have any questions, please let me know
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