(Names have been changed to protect client privacy)
Background
Two friends, Ramesh and Suresh, began investing ₹10,000 per month via SIP in an equity mutual fund starting January 2015.
The Fund
Both chose the same large-cap mutual fund, which delivered an average 12% CAGR over a 10-year period (2015–2025).
Ramesh – The Short-Term Investor (Emotional Reactor)
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In 2016, during Brexit, Ramesh exited the market fearing global uncertainty.
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In 2017, seeing a market rally, he re-entered at higher prices.
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In March 2020, during the COVID-19 crash, he exited again after his portfolio dropped by 25%.
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In 2021, he waited until the market fully recovered before re-entering—missing the early upside.
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In 2022, amid the Russia-Ukraine conflict, he again partially exited in fear.
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By 2025, his overall CAGR was 6.5%.
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Final Corpus: ₹13.5 Lakhs approx.
Key Mistake: Tried to time the market and reacted emotionally to volatility. Missed crucial compounding periods.
Suresh – The Long-Term Investor (Disciplined and Patient)
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From 2015 to 2025, Suresh continued his SIPs without stopping.
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He remained invested through all major events: Brexit, demonetization, COVID-19, and geopolitical tensions.
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He reviewed his portfolio annually but avoided panic decisions.
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His focus was long-term—retirement and wealth creation.
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By 2025, his CAGR was 12%.
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Final Corpus: ₹23 Lakhs approx.
Key Strength: Maintained discipline and benefited from uninterrupted compounding over time.
Key Lessons from the Use Case
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Market dips are temporary, but compounding rewards consistency.
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Emotional exits reduce long-term returns.
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The best investors stay focused on goals—not headlines.
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SIPs work best when left undisturbed over years.
Takeaway
If Suresh could build ₹23 lakh by staying calm and consistent, so can you.
Mutual funds don’t need perfect timing—just long-term trust.
Let your money grow while you stay focused on your financial goals.
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