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So how does it feel to be a long term investor? (Especially when the markets drop)

In this post we show how a long-term investor makes money even though the market might have blips of bad performance.

At Scripbox we always advise long term investors to keep investing every month and ignore market movements. But when the market goes down, you obviously begin to have doubts. A typical concerned query we get from investors is

I started investing 5 months ago and I'm losing money. Should I continue my SIP

OR

It's easy for you to give this advice but it's my money and I think I'm just going to stop!

We created the below graphic to show you what your experience as a monthly investor in equity funds is likely to be over time. Specifically how your investments made in the previous months will look as months pass.

Green means you have a positive return on that month's investment, and red means negative. This is based on actual Nifty values over the last 10 years. 


What this graphic shows
1. You will have periods where some of your monthly investments will be losing money
2. For periods less than 2-3 years, it is quite possible that all your investments are in red
3. Over time, the gains outnumber losses and you gain from the volatility.

Why should I put up with all of this uncertainty?
On the right, we show how much money you would have accumulated which is about Rs 18.6 Lakhs over 10 years, if you were investing Rs 10,000 every month. The market ups and downs work in your favour. The money you invest when market is down gets a disproportionate gain.

So what's the conclusion?
Invest in equities only if your investment horizon is minimum 5 years (7 to 10 years or longer is preferred). Don't do it to make quick money but for long term wealth accumulation.

How can Scripbox help you?
Equity mutual funds are the best way for you to benefit from equity investing. We help you do it the right way - automatically.

1. Pick the best mutual funds for you using our scientific process
2. Monitor and review your investments annually
3. Help you manage your investments better by ensuring you don't lose money to taxes and exit loads.
Scripbox can help you invest better
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