Consider this:
You are travelling from anairplane from Kolkata to Delhi and turbulence hits mid air. What do you do? Youpanic and pray but you don’t jump out of the aircraft midair… Do you?
And once the plane landssuccessfully at your destination, you talk about the turbulence but do you giveup travelling in planes?
If you're flying on aBoeing 777 Cathay Pacific flight from Hong Kong to Los Angeles on any givenday, there's a one in 4,068,434 chance that your plane will crash.
At least that's what a newapp called "Am I Going Down?" says. That means if you take thatflight every day for the next 11,146 years, you'll be unlikely to experience anincident.
Similarly, EquityInvestments can be considered like flying in a plane which will take you toyour destination much faster than other means of commercially availabletransport. The journey sometimes may be rough but in the end you will reachyour destination earlier in much more comfortable manner.
In the past we have seenScams, Tech Bubble, Sub Prime Crisis, Adverse Geo Political situations etc butif we take any block of 10 years historically, we will see that the marketshave delivered double digit returns taking into account the correction &crashes!
Historically, only twoasset classes have helped investor create Wealth over long term (7-10 Years).Equities and Real Estate. Both have their share of pitfalls (Equities – MarketVolatility; Real Estate – Liquidity) but Iwould rate Investing in Equity higher because of the ease of operation.
Creating Wealth is likegrowing a tree. You keep watering the plant diligently with patience and in fewyears’ time the tree gives you fruit and shelter (If need be). Invest inequities systematically with Discipline and Patience and never ever try to timethe market.
Mutual Funds are best wayto Invest in Equities. They help you diversify and negate the risk. And withcurrent Volatility in the stock markets, it makes perfect sense to start aSystematic Investment Plan.
Kunal Jain
The writer is a director at SamriddhiInvestment Services Pvt Ltd. For any Mutual Fund related query, feel free towrite to him at kunal@samriddhigroup.com