Long term Investment always pays maximum returns. This is not only about Stocks but it is true for any investment such as bonds, PPF, EPF, Real Estate, Businesses, Art…etc…
But when it comes to Equity Investing, the scenario is very different. People start investing in the equity for long-term investment view but when the market comes down, they stop investing. So many people have started SIP in Equity mutual funds from the Sensex 18,000 to 21,000 but when the Sensex dips to 8000, instead of increasing the SIP, they have stopped SIP and many have book losses. But when the Sensex again touches 15,000 level, they again started investing in the equity.
Everyone knows that, long-term Investment has so many advantages but it is really difficult to control your emotions when the stock market goes down.
There are so many seasoned investors who continued SIPs in their Mutual funds while the Sensex was at 8,000. In fact some had increased their SIPs. And today these are the investors who benefited the most.
For a long term investment, you must have a plan and you must consider factors like Inflation & Tax into account while considering long term investments. The impact of inflation and volatility neutralized over a long period.
When the stock market was down, some intelligent investors decided to include Gold in their portfolios. Their view was that the stock market may take a long term to recover because of the uncertainties in the global economy and gold would provide the stability to the portfolio.
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