Even investments at the peak of 1992 were multiplied by 15: Prashant Jain

The stock market is very forgiving, Prashant Jain told a Morningstar conference on Wednesday. He gave the example of a person who invested money in the Sensex in 1992, at the height of the Harshad Mehta scam. The Sensex has grown 15x over the next 30 years, allowing the “foolish” investor a 9.5% CAGR on their portfolio. Similar returns of 11.4% and 7.5%, respectively, follow for anyone who invested at the height of the dot-com boom in February 2000 or just before the 2008 global financial crisis.

That is, even if you invested at a peak in the market – the worst possible time to do so – and stayed invested in the market for a long enough period of time, you ultimately made money. . “A typical market cycle is 7 to 10 years. So you should have a time frame of at least seven years, possibly 10, to invest in stocks,” says Anup Bansal, Chief Commercial Officer of Scripbox. He adds, “If you stay invested that long, you can get a return that’s higher than inflation. “

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According to Munish Randev, Founder and CEO of Matterhorn Family Office & Advisors, the timing of the investment impacts the short to medium term returns of your stock portfolio, but when you start looking at horizons of 10, 15 and 20 years, the gap between the worst and best rolling returns narrows considerably.

The conclusion investors can then likely draw is to “focus on giving their investments enough time to grow rather than timing the market,” as Bansal sums it up. However, he points out that while this may be true for the broader market, if you’re investing in the stock of a company that’s going bankrupt or an MF system that’s made the wrong bets, no timeframe will help you.

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Carol N. Valencia