What if you had invested in the Sensex, every month, with the same amount, over the last five years? (Called a Systematic Investment Plan or SIP) Answer: Less than 5% Per Year. (Add another 2% for dividends, and remove about 1% for costs – either as ETF fees or otherwise – and you still get just 6% to 7% on the Sensex for five years) This is where you friendly advisor will tell you – Look, think 10 years, because five years isn’t long term. If 10 year returns suck, the long term will become 20 years. Or till you retire. Or till you die. It’s a very good argument. Active Funds Have Done Better: Mutual Funds Scrape Through Contrary to popular notions in the US, in India active funds have done better. Let’s go back to 2010 and choose the top funds as of December 2010 (which were considered best performing then).… (Read On…)
[via Capital Mind]
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