People just don’t appreciate that returns in Equities are never linear, it’s a topsy turvy ride. The one thing which is most certain and universal about equity markets across the globe is, “THEY ARE VOLATILE.”
Unfortunately, in our B-school curriculum Volatility is considered as risk. However, risk is losing your capital.
Apple Inc. has created enormous Wealth for it’s shareholders. It increased by more than 6000% from 2002 to 2012 but more importantly it declined on 48℅ of all trading days. It’s never a straight path up. So if you would have looked at Apple’s price on a daily basis you would witnessed a fall every other day.
In Indian equity mutual funds during the last 21 years, on 5517 days when NAV was declared , Reliance Growth Fund was negative for 2370 (43%)days Yet, increased from 10 to 948(9384%). It will be same in the funds we suggested you to invest in.
That’s the power of staying long in equity !
The single most important variable for how you will do as an investor is how long you can stay invested. You cannot control what is going on in markets but you can definitely control how you react to it.
“I’ve found that the big money was never made in the buying or the selling, was made in the waiting.”-J. Livermore.
Happy Investing !!