As the world grapples with Covid-19 and financial markets turn volatile, does this mean it’s time to kiss our dreams goodbye? No plush 3BHK, new 4-wheel drive or early retirement?
Historical data suggests quite the opposite. If you study the chart below, you’ll notice that from 2008 to 2020 multiple crises caused the markets to fall multiple times. But you’ll also notice that they bounced back. Through the constant volatility over a decade, the Sensex nevertheless rose, creating wealth for investors who stayed invested for the long term.
Source: MFI Explorer - Data as of Feb 29, 2020. Past performance may or may not sustain in future. Please view the complete disclaimer below**
Similarly, by staying invested during the Coronavirus crisis as well, chances are you too could grow wealth in the long term. In fact, volatile markets offer investors a good opportunity to pick good companies at attractive valuations.
The best you can do to minimize your risk now is to invest through a SIP (Systematic Investment Plan) and stay invested for the long term. Your dreams are calling: it’s time to get started.
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**Source: MFI (MFI Explorer is a tool provided by ICRA Online Ltd. For their standard disclaimer please click here) Data as of Feb 29, 2020. Past performance may or may not sustain in future. *All returns mentioned are 1Y returns except for Feb-16 to Nov-16. For 2008 to 2009, Period considered is 20-Nov-08 to 20-Nov-09, For 2011 to 2012, Period considered is 20-Dec-11 to 20-Dec-12, For 2013 to 2014, Period considered is 31-Aug-13 to 31-Aug-14. For 2018 to 2019, Period considered is 30-Nov-18 to 31-Dec-19. Returns are in absolute terms except for the period 2018 to 2019 which are CAGR returns. Past performance may or may not be sustained in future.
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