I think there is no risk in the equity market. We must understand the difference between risk and volatility in the equity market.
Risk is where there is danger of permanent loss to the capital whereas volatility is market's nature of rise and fall but no permanent loss to the capital. The beauty is that the volatility will make your profits grow more than the benchmark index. This will keep giving you the opportunity to buy at lower levels. So, never be afraid of equity market's volatility and make it work in your favour by investing systematically through SIPs and STPs in good quality equity and hybrid mutual funds.
Let's have a look at the returns of the Sensex from 1980 to 2023:
Date Annual return
01-04-1980 3.50%
01-04-1981 35.25%
01-04-1982 27.12%
02-04-1983 -3.76%
03-04-1984 16.06%
01-04-1985 42.39%
01-04-1986 59.57%
01-04-1987 -8.95%
04-04-1988. -22.21%
03-04-1989 82.26%
02-04-1990 8.16%
01-04-1991 52.45%
02-04-1992 267.61%
02-04-1993 -47.32%
04-04-1994 63.57%
03-04-1995 -12.28%
02-04-1996 2.81%
01-04-1997 0.51%
01-04-1998 15.83%
01-04-1999 -7.14%
03-04-2000 37.07%
02-04-2001 -29.42%
01-04-2002. -1.85%
01-04-2003 -11.98%
01-04-2004 86.33%
01-04-2005 15.05%
03-04-2006 75.08%
02-04-2007 7.70%
01-04-2008 25.46%
01-04-2009 -36.63%
01-04-2010. 78.68%
01-04-2011 9.77%
02-04-2012. -10.00%
01-04-2013 7.93%
01-04-2014 18.99%
01-04-2015 25.90%
01-04-2016. -10.58%
03-04-2017 18.36%
02-04-2018. 11.18%
01-04-2019 16.89%
01-04-2020 -27.29%
01-04-2021 77%
01-04-2022 18%
01-04-2023 -0.48%
As shown above, it has been pretty rough at times but after every major fall there has been a great recovery. This is volatility. It works in your favour. This is the fundamental nature of the equity market. The sensex started with 100 and today it is above 70,000, a CAGR of approximately 15%. Which other asset class can give you this kind of return with so much of ease, transparency, liquidity and mental peace? Even if the returns are low or negative for one or two years, your SIPs may still give you better than FD returns even during distress due to volatility (regular rise and fall). Don't wait for tomorrow; it never comes. Start today and invest slowly. Increase your investment as your income rises.
Remember one thing very clearly in your mind that your capital will never become zero in equity mutual funds. It may happen in direct stock buying or trading ( Future and Options). What you need is investing in good quality equity and hybrid mutual funds as per your age, risk appetite, goals and need. A good financial advisor can always help to make your journey smooth and profitable by guiding you in the times of hyper activity in the market.
We, at INVESTOR FIRST can manage your mutual fund portfolio if you so desire. The process of investment will be online only. It will take 1 or 2 days for registration with us. We will give you an app for monitoring and execution of your mutual fund investments. If you so desire, you may please contact us at the following address :
Website: https://investorfirst.co.in/
Head Office : 2nd Floor, 159/129/96, Sri Krishna Tower, Near Hotel Ramada, Ballupur Road, Dehradun-248001, Uttarakhand.
Contact Numbers: +91-9164046333 (personal), +91-8410116967(off), +91-6397808084(off), +91-1353520386(off).
Mail Address: sangam157@gmail.com, info@investorfirst.co.in
DISCLAIMER : The opinion expressed above is our personal opinion and in no way recommendation of buying or selling. You must consult your financial advisor before making any fresh investment in equity market. Please also note that past performance of funds does not guarantee future returns.
No comments:
Post a Comment