We have been told #LongTerm is 3-5 years. From Jan 08 to Nov 19, Sensex has delivered only 5.50% CAGR. Isn't 11 years long term?
So where did we go wrong? And what defines long term?
#mutualfunds #Nifty #financialplanning
Long term cannot be defined in number of years holding. Intention of defining long term is so Investments deliver decent returns for Investors over a defined period of time.
Then what defines this period?
Long term gets defined by valuation at the time of your investment. If you invest when valuations were high, hold for longer period; horizon gets shortened if you invest at lower valuations like investments made in March 2009.
Long Term gets defined by which Business Cycle did one invest in. If you invest in Downward Cycle, long term gets stretched. If you invest in upward trending business cycle, long term can be shortened & vice versa
To conclude: Long Term gets determined by:
1) horizon of your goals
2) market valuations at the time of your investments
3) business cycles post or during your investment journeys
4) long term cannot be defined in number of years
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