Interesting Analysis

Can equities deliver zero returns for 5, 10, or 15 years? Since 1979, the Sensex has seen 12 major declines of 20 per cent or more. Indian equities have never delivered negative returns. Even over 10 years, losses were extremely rare.

Timing the market is almost impossible, even for the greatest of investors. This is where SIPs come in. They spread your investment over time and reduce the risk of entering the market at the wrong time.

For example, a lump sum investment at the market top in 2008 gave negligible returns by 2010. But a regular SIP at the same time still earned 27.6 per cent return by the time the market recovered.

Key Takeaways 1. Longer holding periods of 10 years and above drastically reduce risk. 2. Lump sum investments near market peaks can underperform for a long time. 3. So, opt for SIPs to ride market volatility.