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With the markets on a rebound, mutual funds remain your best bet for building financial prosperity in the long run

- Ashwini Kumar Sharma

Investors are facing huge challenges regarding how they can generate good returns at a time when the equity market is in correction, term deposit interest rates are at a record low, the real estate market is either stagnant or in decline and gold is unlikely to repeat its performance in the near term. However, when looking at long-term returns, the performance of equities looks solid, particularly if the investment has been made through mutual funds.

Despite suffering one of the worst crashes of the past two decades—almost 35 per cent from the peak—equities are on a rebound. As of today, equities are just about 10 per cent below the point when the slump started. Many investors, though, are still worried about volatility in the equity market. But experts consider it as an opportunity. “Volatility is part and parcel of investing in equity markets and one should look at market corrections as an opportunity to accumulate units,” says D.P. Singh, chief business officer, SBI Mutual Funds.

Once we are out of the Covid pandemic and the economy starts recovering, we may even see the market touching new highs. “Those who sold in March/ April this year, when the markets were in panic mode, are regretting after the recent show in the markets. It is well known that stock markets transfer wealth from the impatient investor to the one who is patient and invests with a long-term plan,” says Varun Girilal, co-founder and executive director, Mitraz Investment Advisors, a financial planning firm.