Why Invest ?

Why Invest?

Saving serves as the initial step, supplementing your wealth. However, merely accumulating funds isn't sufficient to truly expand your wealth exponentially. Actively investing becomes indispensable to not only enhance your wealth but also multiply it significantly.

As India emerges as a global powerhouse, the importance of investing becomes increasingly evident. Being an active participant in India's growth story and becoming stakeholders in the nation's trajectory are crucial for all individuals.

Concerned about the risk? You'll be pleasantly surprised to discover a plethora of investment options offering excellent returns with minimal risk, perfectly tailored to suit your individual risk appetite and financial goals. Connect with our team to receive a meticulously crafted portfolio tailored specifically for you.

Why Equity?

We all know that savings accounts do not offer significant growth for our money. To expand our corpus, it is important to explore other investment avenues. Rather than investing in a specific commodity (gold/silver) or a specific asset class (real estate), equity investments offer the opportunity to participate in the growth of diverse sectors of the economy.
BBy investing in a range of companies across various industries, investors can diversify their portfolios and capture the upside potential of different market segments. Additionally, equity investments provide liquidity, allowing investors to buy and sell shares relatively easily compared to other asset classes. This liquidity ensures that investors can access their funds when needed and take advantage of market opportunities as they arise.
When discussing the best investment options in today's world that are viable and can beat inflation, we often talk about the stock market (i.e., equity), fixed deposits, and gold.

Here's a comparison of these asset classes-

Data from March 31, 1980 till March 31, 2022

Data source: World Bank" and "#Average Inflation is shown for comparison with returns from various asset classes

WHAT ABOUT THE RISK?

When discussing Equity, the next topic that naturally follows after discussing the returns is the RISK. As we can clearly see in the chart below, there have been instances where the returns were negative for a single year, indicating the presence of risk. However, this risk can be effectively mitigated in the long term, as the average returns tend to be favorable when considering longer durations.

Equity returns - NIFTY 50

Source: MFI

  • Even with the volatility that we see in the above table, From 1999 to 2021, NIFTY has given a CAGR returns of 14.20%. That's the power of long term investment
  • As the investment horizon increases, probability of loss reduces. For example, in the last 43 years of SENSEX, the likelihood of losing money for periods of 15 years or more has been NIL.

Why Mutual Funds?

  1. Diversification- Mitigates the impact of individual stock fluctuations and reduces overall portfolio volatility.
  2. Managed by professionals - A doctor never operates on his family. Similarly, managing your own stocks trading may lead to decisions from emotions like fear and greed. Expertise, oversight and no emotional ups and downs potentially lead to better investment decisions and superior returns compared to individual stock picking.
  3. Flexibility - Invest across Equity, Debt, Commodities, hybrid funds, etc. according to your risk apetite and investment objectives
  4. Units of Scale - Invest in a huge basket of stocks within or across sectors without actually having to invest the sum total of individual share market price, get the diversity and participate in the growth of the stocks with an SIP of as low as INR 500 and lump sum investment of as low as INR 100
  5. Benefits of a SIP- Enter the market at various stages and avoid the risk of a single hugely affecting entry at a certain market level. Also SIP develops a habit of investing every month in a disciplined manner.

Calculate your Mutual Fund returns now!

As a benchmark, you can calculate with an expected return rate between 10% to 18%, depending on your risk appetite. (This is the average returns we have seen in the past for clients who have stayed invested for a minimum 5-7 years time horizon).

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