It can work in equity too. Keep tracking the main indices of the market (Sensex, Nifty-50, Next Nifty-50). These indices keep correcting themselves by about 5-10% at least once every year. Whenever correction happens, make lumpsum investments in good index funds/ index-linked ETFs. After buying, hold on to them for the next 20 years. Idea is to let your return compound by keeping your money invested.
how can we be so sure?
Dow jones 1929 to 1954 – 9191 days negative returns
If you were 30 years old when you invested at 1929, then by 55 years your amount has just breakeven. Considering inflation, currency devaluation – you have lost !
Nothing is predictable !
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entry & exit are important. You enter every time there is a correction. Exit has to be planned – well before you need the money for your goals – when the mkts are peaking.
a simple example: Even if you had entered in March 2020 & planned your exit in 2021/2022, you would have almost doubled your return. Similarly there will be many years in between, mkt could be negative/ flat… then some years they will boom. Overall over 15-20 years, one will do well. What is more imp is start early, have a disciplined approach & stay invested.
I would also agree,Equity is not to be sleep upon.Its wealth building process as your real owner of actual business, Tangible things . Exit is very very important as well same as entry.
In todays world , with so many asset class we can park and rotate its important to be a multi asset investor rather than only Equity. We have see QE where it was free money now we are moving to tightening after 2 decades , so new cycle of money supply is starting.