July 15, 2024

INDIA TAAZA KHABAR

SABSE BADA NEWS

If you want equity to change your life, don’t waste time; invest now!

8 min read

It is uncanny that several investors have emailed or commented over the last few days asking if they should stop their investments now and wait for the market to cool down a bit. Or they are waiting for the right time to invest a lump sum or start a sip.Our short answer is: If you want equity to change your life, don’t waste time and invest now! Don’t stop your investments because of market-related noise! Don’t wait for the right time to invest. That will never come. Whatever way you invest, irrespective of the time, losing and gaining are part and parcel of the market fabric. The only way to escape losses is also to escape gains. So investing without wasting time and getting used to the losses is better.  The Bigger loss is the time wasted wondering what to do. That cannot be recovered.Even if we buy into the (incorrect*) belief that “over the long term, the stock market will move up always”, equity investing is like climbing an unknown, uneven staircase; we do not know how wide each step is, and we do not know when we will see the next step (ignoring the potholes within each step),* See: Stock market always moves up in the long term, but returns move up and down!The stock market is like a mercurial batsman (e.g. Sehwag). It can explode to provide magical life-changing returns (e.g. from 2003 to 2008; 2020-2022) or can go through a slump for years (the Sensex was flat for ten years after the Harshad Mehta scam) So, the secret behind successful stock market investing is to start early and keep investing. When the bumper returns arrive, your life could change. Accumulate as much market-linked capital as possible to benefit from an upswing.So everyone is waiting for such a return in one way or another and timing the market! See: Why “time in the market: is not different from “timing the market”!As I keep saying, we are all victims of our good and bad experiences, and so am I. Again, with the benefit of hindsight, I consider myself lucky to have started my journey with equity mutual funds when the markets were crashing in 2008, and this gave me no returns for the next five years. No, I did not buy the dip! I started with a SIP of Rs. 1500.During these years, I was investing like crazy (quite unaware of anything happening around me). When the market started moving, I had to rub my eyes in disbelief to see my gains. My daily profit was equal to my monthly investment amount. See the chart below.The first ten years of my mutual fund investing journeyThis is the year-on-year increase in my investment. Notice that by sheer luck, the huge investment increase coincided with the portfolio’s sideways movement.Note: The amount I invest each month has continuously increased. The above chart represents the increase in investment wrt to the initial investment.Growth of my retirement portfolio compared with identical purchases and redemptions in the Nifty 50 TRI index as of 13th June 2024You can read more about the chart and 16 years of mutual fund investing: My Journey and lessons learnedTwo events changed my social station. The late 2013 bull run took me to the threshold of financial independence. We shall define this as 30X or 30 times current annual expenses. This means a corpus will last for 30 years if the inflation rate is the same as the rate of return.The 2020-2022 bull run strengthened the financial independence (FI) status. During this time, my annual expenses increased by about 50%. The FI status is not yet cemented because 60% of the capital is (equity) market-linked, and any crash and/or poor sequence of returns can change it.That aside, the key point is that the corpus grew only due to systematic investing regardless of market levels and an aggressive increase in investments yearly. The rate at which my investments grew is higher than the market-linked return. See Why increasing investments each year is crucial for financial freedom.Many people naively believe that wealth is built with returns. Nothing could be further than the truth. Wealth is built with money. You need money to make money, So young earners should focus on skills that will increase their income.So please do not worry about missed opportunities or right or wrong time (the equity market occasionally offers plenty of good and bad experiences). Do not worry about where the market is currently heading.Be clear about your goal.Choose a suitable asset allocation.Invest as per that asset allocation like a machine.Increase investments as much as possible.Learn how to manage risk in your portfolio in a goal-based manner.Rebalance your portfolio at least when the deviation in asset allocation is 5% or more.Systematically reduce equity exposure well before you need the money.Once you start, portfolio maintenance should take 30 minutes a year (yes, a year!).You can use the freefincal robo advisor to create a complete financial plan and get started.Do share this article with your friends using the buttons below. 🔥Enjoy massive discounts on our courses, robo-advisory tool and exclusive investor circle! 🔥& join our community of 5000+ users! Use our Robo-advisory Tool for a start-to-finish financial plan! ⇐ More than 1,000 investors and advisors use this! New Tool! => Track your mutual funds and stock investments with this Google Sheet! We also publish monthly equity mutual funds, debt and hybrid mutual funds, index funds and ETF screeners and momentum, low-volatility stock screeners.Follow Freefincal on Google NewsSubscribe to the freefincal Youtube Channel.Follow freefincal on WhatsApp Podcast: Let’s Get RICH With PATTU! Every single Indian CAN grow their wealth! Listen to the Let’s Get Rich with Pattu Podcast You can watch podcast episodes on the OfSpin Media Friends YouTube Channel.Let’s Get RICH With PATTU podcast on YouTube. 🔥Now Watch Let’s Get Rich With Pattu தமிழில் (in Tamil)! 🔥Do you have a comment about the above article? Reach out to us on Twitter: @freefincal or @pattufreefincalHave a question? Subscribe to our newsletter using the form below.Hit ‘reply’ to any email from us! We do not offer personalized investment advice. We can write a detailed article without mentioning your name if you have a generic question. Join over 32,000 readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email!About The Author Dr M. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over ten years of experience publishing news analysis, research and financial product development. Connect with him via Twitter(X), Linkedin, or YouTube. Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (CNBC TV18) for DIY investors. (2) Gamechanger for young earners. (3) Chinchu Gets a Superpower! for kids. He has also written seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation promoting unbiased, commission-free investment advice. Our flagship course! Learn to manage your portfolio like a pro to achieve your goals regardless of market conditions! ⇐ More than 3,000 investors and advisors are part of our exclusive community! Get clarity on how to plan for your goals and achieve the necessary corpus no matter the market condition is!! Watch the first lecture for free!  One-time payment! No recurring fees! Life-long access to videos! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence. Our new course!  Increase your income by getting people to pay for your skills! ⇐ More than 700 salaried employees, entrepreneurs and financial advisors are part of our exclusive community! Learn how to get people to pay for your skills! Whether you are a professional or small business owner who wants more clients via online visibility or a salaried person wanting a side income or passive income, we will show you how to achieve this by showcasing your skills and building a community that trusts and pays you! (watch 1st lecture for free). One-time payment! No recurring fees! Life-long access to videos!    Our new book for kids: “Chinchu Gets a Superpower!” is now available!Both the boy and girl-version covers of “Chinchu Gets a superpower”. Most investor problems can be traced to a lack of informed decision-making. We made bad decisions and money mistakes when we started earning and spent years undoing these mistakes. Why should our children go through the same pain? What is this book about? As parents, what would it be if we had to groom one ability in our children that is key not only to money management and investing but to any aspect of life? My answer: Sound Decision Making. So, in this book, we meet Chinchu, who is about to turn 10. What he wants for his birthday and how his parents plan for it, as well as teaching him several key ideas of decision-making and money management, is the narrative. What readers say!Feedback from a young reader after reading Chinchu gets a Superpower!Must-read book even for adults! This is something that every parent should teach their kids right from their young age. The importance of money management and decision making based on their wants and needs. Very nicely written in simple terms. – Arun. Buy the book: Chinchu gets a superpower for your child! How to profit from content writing: Our new ebook is for those interested in getting side income via content writing. It is available at a 50% discount for Rs. 500 only! Do you want to check if the market is overvalued or undervalued? Use our market valuation tool (it will work with any index!), or get the Tactical Buy/Sell timing tool! We publish monthly mutual fund screeners and momentum, low-volatility stock screeners. About freefincal & its content policy. Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on mutual funds, stocks, investing, retirement and personal finance developments. We do so without conflict of interest and bias. Follow us on Google News. Freefincal serves more than three million readers a year (5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified with credible and knowledgeable sources before publication. Freefincal does not publish paid articles, promotions, PR, satire or opinions without data. All opinions will be inferences backed by verifiable, reproducible evidence/data. Contact information: letters at freefincal dot com (sponsored posts or paid collaborations will not be entertained) Connect with us on social media Our publicationsYou Can Be Rich Too with Goal-Based Investing Published by CNBC TV18, this book is meant to help you ask the right questions and seek the correct answers, and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now. Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want This book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at a low cost! Get it or gift it to a young earner.Your Ultimate Guide to Travel This is an in-depth dive into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, and how travelling slowly is better financially and psychologically, with links to the web pages and hand-holding at every step. Get the pdf for Rs 300 (instant download)  

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