As the global markets went into a spectacular collapse on Thursday and Friday, comparisons to the financial crisis of 2008 were inevitable. The Dow fell by more than 4% and then were up just a few hours later.
For long-term investors in equity funds who are investing regularly (either through SIPs or directly), there is less to worry. Things in India are bad only on a relative scale – relative to the rest of the world, relative to what they could have been, even relative to what they should have been.
Indian economy is growing faster than much of the world and will continue to do so for a long time. There are plenty of businesses of all sorts that will generate wealth. Long-term investors can make sure that they reap the rewards by investing steadily for the long term.
Back in 2008-09, the only investors who lost out were the ones who stopped investing when the markets plunged and then stayed away. In the long run, all that happened was that when the buying opportunity was at its best, they were running scared. Eventually, the only winners were the ones who let their SIPs continue, taking advantage of the low NAVs.
