Volatility, has a positive role in Human life and investment
Volatility, fluctuations ,ups and downs , recession , price discount, cheap price , risk taking.
Above mentioned words are the basic ingredients of investment to be successful , return comes with risk , and risk is nothing but a parameter that explains deviation from average return.
Return and risk are two sides of the same coin , the time you grow your return expectations , inherent risk will grow proportionately , investment management is nothing but juggling between these two beasts named risk/return.
Fear of losing something will keep people staying away from taking more risk , and they land up with zero risky asset and get into a big trap of invisible enemy that is inflation , staying away from risk inevitably increase more risk of losing the value of investment like I mentioned in retirement blog , so it's better to take calculated risk as per your risk profile to ensure better return , risk reduces as you stay invested for long term horizon , SIP takes advantage of volatility and fluctuations of price of the assets and buys at different pricing levels to realise rupee cost averaging , let say you invest 10000 rs each month in a mutual fund scheme for 240 months , here you will invest the same amount each month at 240 different pricing levels which averages the cost and reduces the volatility drastically and increase the return sharply , that is why sip yields return in the range of 10%-20% on compounded annual growth rate basis .
If you are already invested through sip route then you are already on the right path of wealth creation .
Thanks
MFDPKVERMA.COM
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