Why The Need To Invest Regularly Matters

N a country where economic growth and corporate profits are growing steadily, you need to align your long-term investments to benefit from that growth.

- RAJAS KELKAR

A regular, systematic investment plan in a diversified equity mutual fund over 20 years can easily take care of your retirement. The catch is that you cannot touch this money and withdraw just because you can.

Atul Bhole is a renowned fund manager at Kotak Mutual Fund. He revealed a fascinating insight into the journey of a 20-year-old mutual fund scheme he managed. He talked about it in a podcast on YouTube. The scheme generated a compounded annual growth rate (CAGR) of 18%. The most important thing he said was that only 23 investors stayed invested for that period. Everybody else came and went. The average return for investors who did not stay invested for 20 years was only 7.5%. The story pretty much narrates the importance of investing regularly and staying invested. It also explains the cost of being fickle when investing. The difference is significant when you look at the span of the investment.