Why is there an emphasis on Long-term investing?
If you have started investing, you might have heard or read that:
Investing in equities should only be perceived when the duration is at least greater than 5 years!
But why is this? What if you want to invest in equities only for a year or 1/2 years? Then what?
Well here's why:
From March of 1979 to March of 2021 (42 Yrs), Sensex has delivered 16% CAGR since inception. Great right?
But return's weren't linear at all!
Interesting to observe that market has given positive returns 28 times out of 42 times (67%) & double-digit gain 23 times (55%) only.
The rest of the time's the returns have either been negative or negligible.
Also, you cannot predict the short-term outlook of the markets, however, in the long run, equity markets have always risen.
Statistically, only long term investing can create wealth.
Cheers!
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Mid-Week Wisdom:
“Invest for the long haul. Don’t get too greedy and don’t get too scared.”- Shelby M.C. Davis
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