I always keep telling you not to time the market. Hopping in and out of the market leads only to wealth destruction or sub-optimal returns. Country like India is in a structural bull market. In the long run, markets only keep going up, with occasional corrections and bear markets. If you can stay the course, ignoring the pains of corrections and bear markets, you would definitely get rich. Accepting volatility is the price you pay for obtaining excellent returns.
We always emphasise that equities need to be held for multi-decades and even multi-generations. Considering that one has a career span of 3 decades and post retirement life of another 2 or 3 decades; we need to learn to hold equities for many decades. Since a part of our wealth goes to next generation, we also need to learn to hold it for multi-generations. Great wealth is made only this way.
If you can change your mindset towards equity and be a ‘buy & hold’ investor, financial independence and significant wealth is definitely yours.
I keep sharing data and real life examples to reinforce the need to hold equities for long run without timing the market.
I was reading THIS article.
Russ Gremel of Chicago is 98 years old. Due to his love for nature, he is donating $2 million to establish a 400 acre wild life refuge, which is also being named after him.
Seventy years ago, when he was in his twenties, he saw Chicago based Walgreens, a pharmacy chain, growing well. He invested $1000 in the stock of Walgreens. He held it through bull and bear markets, recessions and booms, good and bad news and various business cycles. He was just monitoring the company, without selling a single share. Though it is not mentioned, he might have received excellent dividends over all these years. No one in his neighbourhood was aware that he is a rich man.
Now that $1000 has become $2 million. When we calculate it in Indian currency it comes Rs 1000 has become Rs 13000 Crores. Power of buying right and sitting tight.
Whether it is stocks or equity funds, staying the course for long run is the way to create huge wealth even with relatively modest investments. Churning should be very minimal. Chasing performance and timing the market invariably brings only wealth destruction.
Our biggest value addition as an advisor is making you stay the course. Example such as Russ Gremel is to provide you positive reinforcement.
Wishing you a great week ahead.
Happy Investing !!