Markets are turning Volatile - What should I do?
Equity Markets have been volatile in the last 1-2 weeks & naturally anxiety creeps in (especially for new investors, who have entered in the last 1-2 years, with an (unreasonable) expectation of 20% returns from mutual funds).
But is this a new phenomenon in equity markets? Let's check out the performance of Nifty 50 in the last 25 calendar years:
- Negative Returns : 5 years out of 25
- Single-Digit Return : 5 years out of 25
- Double-Digit Return : 15 years out of 25
- Compounded Return in last 25 years: 14% p.a.
Markets ups & downs are part of the investing journey and it is the volatility that provides return in the long-term. Hence, if you are in no need of money within next 1 - 2 years - just relax & enjoy the ride. In the end, we will be rewarded handsomely good return - thanks to our growing economy.
Have reasonable expectation of 10-15% compounded annual return over long-term (5-7+ years) from Mutual Funds!
