BUMPY RIDE, LUMPY RETURNS:

Last 10 years, Sensex has given an annualised return of 9%. The broader market index, BSE 500 has given an annualised return of 10%.

During the same period, your portfolios which are mix of large cap, mid cap and multi cap funds have given a return of around 15%.

Balanced funds during the above period have given around 12% returns.

Now there are lot of predictions about long term structural bull market for next one or two decades. Since these predictions crop up during every bull market, I do not want to take the same seriously.

Likewise, during bear markets, one of which happened last year, many experts predicted gloom and doom. I never took them seriously as well.

In my view, markets, economy and businesses continue to be cyclical. There would be both surprises and shocks during next 10 years, like it was the same for previous 10 years and the 10 years before and so on.

Though there is no guarantee of returns on mutual funds, as they are marked to market securities, I believe we can conservatively aim for 15% returns in equity funds and 12% returns in balanced funds over next one decade.

The journey would continue to be as volatile as it was before. It is better to be mentally prepared for a bumpy ride. The reward for going through this bumpy ride is good returns over long term.

The returns mentioned in this piece are only a broad pointer and the actual results may vary. The standard disclaimer, past performance may or may not be repeated in future, always apply.

Financial intelligence is not how much money you earn but how much money you can keep, how it works for you and how you are able to grow it. 

So dear investors, what you earn does not matter as much as the money you are able to save, invest regularly and benefit from compounding. Having concrete financial goals, meticulous saving, systematic investments go a long way in making your dreams a reality.

Happy Investing !!

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