Should you quit your equity mutual fund if you are not getting desired returns in a year?
Investment in equities should not have a short term focus. One should invest in equity for the long term to meet ones long-term financial goals.
In the short term equity markets are volatile, however if you stay invested for a longer term you shall receive a return higher than fixed deposit or debt instrument.
The chart below shows the annual returns of NIFTY over the last 10 years.
It is seen above that 5 out of the 10 years you would have received returns lower than FD and debt instruments. But over a 10 year period if you stay invested your returns are higher.
NIFTY 50 10 year return is 10.3% p.a.
CRISIL Short Term Bond Fund Index 10 year return is 8.10% p.a.
Always remember to compare individual mutual fund returns with the benchmark returns and peer group performance and invest in top performing mutual funds within the category.
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