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Whataydeal whatafeel !!

The now famous ad from an online retailer has a song Whataydeal, whatafeel. For a few days the retailer had announced discounts hence the advt. The nice video of happy shoppers dancing to the song is a great ad which reinforces that we are always happy getting a good deal.

This sadly however does not happen in investing, very few dare to invest when markets fall, and no one for sure dances when markets fall !! Instead we have pictures of people gaping at the prices in front of stock exchange.

market at 50% off in 2009 but no one is dancing ! Image Source : Reuters

 

Newspapers use words like panic, mayhem, blood bath etc.

The investment gurus tell us that buy low sell high is the mantra to make money but that would require the investor to muster courage to buy when everyone is selling in panic.

So, is it impossible for an ordinary investor to get the deal which market offers ?

No, the simple way is to invest a fixed amount every month in an equity mutual fund that not only helps us to increase our wealth but also ensures that we buy more when markets are down ( since we invest a fixed amount, lower prices would mean more quantity) and less when markets are up.

Over the last 10-15 years, equity funds have delivered anywhere from 16% to 21% p.a. Anyone who invested as little as Rs. 5000 p.m for last 20 years has made Rs. 1.1 crore ( assuming a return of 18%)  now that is whatay deal & they are dancing their way to the bank !

If you want whatay feel in future, please do invest a fixed amount for next decade or two in equity mutual funds to get whatay feel returns !

Start with as much as you can and increase as you go, when you can save more, when you get a raise etc.

Not many will do this, those who invest in equity funds regularly are few and far between, it is much easier to buy some electronic stuff for Rs. 29999 only that they will throw away to buy another whatay deal product after couple of years( or is that too long these days 🙂 . But those who do invest, are likely to be seen dancing their way to the bank in future, singing whatayfeel 🙂

Note : though returns can vary etc. Historically equities generate the best return and that investing fixed amounts is the best way to invest in equities. Returns can vary but my take is that equities will remain the best place to invest in future too.  That said, Mutual Funds like anyother investments are subject to market risks. Past returns may not be repeated, future returns are not known etc.,

Image Source : http://in.reuters.com/article/2008/01/21/idINIndia-31510420080121

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