You might be aware that the markets have been very volatile this year. The Sensex alone, has fallen 13% from September to October 2018.
The key question you might have is what to do now?
For one time/lumpsum investments stay invested as the value will fall lesser than the markets and over a 5-year period will give good double digit returns.
If you have SIPs continue investing to get good returns in the long term. If you do not have a SIP, start one soon to take advantage of this opportunity. This may sound contrariarian, but you will make more money if the market fall is steeper over the coming months.
Don’t take our word for it though, let’s see what history has to teach us. Suppose you had started your SIP at the peak of the market in Jan 2008 by Jan 2009 you would have lost close to 30%, only on paper though, because loss materializes only when you redeem the funds. Had you continued with your SIPs for 3 or 5 years, you would have made a significant sum of money irrespective of the mutual funds category you were invested in. Have a look at the table below.
Needless to say, if the S IP amounts were higher, the absolute value of the gains would have been even higher.
In conclusion, you make money when you go against the crowd and a ton of money if you are right. So, stay invested for the long term and start a SIP if you have not already done so.
Research Desk
Everguard Life Ventures Pvt. Ltd.
everguardlife.com 