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D.Muthukrishnan (Muthu), Certified Financial Planner- Personal Financial Advisor

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Uncertainty, Time & Patience

Posted by Muthu on October 23, 2014

In a recent piece we saw how equity mutual funds (Crisil-AMFI equity performance index) have provided an annualized return of 22.6% over last 17.5 years.

I believe India would get into double digit economic growth rate in next few years and would be in high growth trajectory for a decade or two.

This would be the golden period of Indian economy.

Anyone who believes in this country’s future and invest accordingly would be hugely rewarded.

I’m very optimistic about the future of our country and that is reflected in my writings, advice and in my personal investment philosophy.

Though there can be no guarantees, I personally believe that as a category, equity funds and quality stocks would be able to reproduce their last 2 decades performance for next 2 decades as well. Performers may vary but performance is bound to repeat itself.

Since we are in a very low base and lot of scope to grow, sustaining high growth for a longer period is possible.

Both globally and domestically, there have been ups and downs in the last 2 decades.

Asian crisis, dot com burst, 9/11 attacks, global sanctions against India after nuclear test, left supported short lived United Front government under Deve Gowda & I.K.Gujral, 13 days and 13 months government by NDA, left supported UPA-1, scam tainted inactive UPA-2, galloping oil prices, rising commodity prices, Kargil war with Pakistan, terrorist attacks, Maoist attacks, huge corruption scandals, 2008 global financial crisis…. the list of negatives which would have scared investors in the last 2 decades are endless.

If somebody looked for a certainty or lack of problems, he would have never found an opportunity to invest. Every day newspapers and 24/7 media would have never given him courage to go ahead.

Despite all the above problems, companies have grown, their sales and profits have grown, earnings and hence Sensex has grown, mutual fund’s returns have grown… lot of every day growth which would not make into daily news have been continuing to happen.

If you look at yourself, you have grown in career or profession or business despite never ending negative news.

Investors who bet on Indian entrepreneurism and the future of this country have been amply rewarded. What set of problems and issues we would face in next 20 years is not known now. But we can be sure that there would continue to be global and domestic challenges, surprises and shocks, scams, bull and bear markets in next twenty years as well.

Despite that we would continue to grow and both quantum and quality of growth would be much superior to what we have seen in the past.

If you believe this and invest accordingly, you can very well be part of this Indian growth story and reap rewards.

All you need to do is to keep looking far ahead (the bigger picture), ignore every day news, have great degree of patience and give time for your investments to grow into fortune.

Uncertainty would continue. We cannot wish it away. Though it may sound paradoxical, accepting every day uncertainty would bring certainty of wealth in the long run.

One Response to “Uncertainty, Time & Patience”

  1. Shankarraju said

    Hi Muthu, I think you keep repeating the message is “Keep investing always irrespective of good or bad times , because in the long run it will average out and reap great benefits”. I would say for the readers like me, we need this kind of boost too often else we will fall into herd mentality of buying high and selling low.

    With this kind of positive reinforcement with facts and data points, will definitely continue to make changes in the minds of the retail investor. Thanks a ton!!

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