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The simple mantra for earning high returns!

PhonePe Editor|2 min read|17 December, 2020

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Stay invested through the ups & downs of the stock market

The stock market is impossible to predict but patience and holding on to long-term investments is the key to earning valuable returns and growing your wealth.

When you invest in growth oriented funds such as Equity or Hybrid Mutual Funds, your post investment behaviour plays a significant role in terms of defining your returns from an investment. Learn to stay unaffected by short term fluctuations in the market & stay invested for the long term.

In the words of Warren Buffet, an American Investor and the world’s fourth-wealthiest person, “The stock market is a device for transferring money from the impatient to the patient.”

Here’s an example to explain the benefits of long term investing.

Let’s say there are 4 groups of Equity Fund investors.

  • Group 1: Invests for 3 months
  • Group 2: Invests for 1 year
  • Group 3: Invests for 5 years
  • Group 4: Invests for 10 years

Each of these investors invested Rs.10,000 at different points in time. Now, on an average here’s how much their investment of Rs.10,000 would have grown at the end of their investment period.

Additional highlights from this analysis:

More than 50% Investors who invested for 10 years saw their investment grow more than fourfold and 98% of the investors at least doubled their money over the 10 year period

Investors who invested only for a 3 month period, more than 1/3rd of them ended up with losses and only 10% of the investors saw more than 20% absolute gains

Learning: Investors who invested for a longer term were clearly able to grow their wealth substantially. The longer you stay invested, the higher are your chances of earning good returns.

Invest in growth oriented funds such as Equity or Hybrid funds & stay invested for a longer period of time (at least 5 years). Investing for the longer term helps you grow your investments substantially and with greater certainty.

Mutual Funds investments are subject to market risks, read all scheme related documents carefully before investing.

PhonePe Wealth Broking Private Limited | AMFI — Registered Mutual Fund Distributor ARN- 187821.

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