Think Equity as Your 3rd Child

The volatility of equity investments is not an ideal choice for most of the investors, even we are well aware of the fact and reality that equity is the only asset that can improve a lot of chances for our portfolio to beat the inflation over the long run.

Most investors prefer equity mutual funds for their investment planning and many are involved in research of businesses, stocks preferring direct equity but the ones who are involved in research and analysis are already very well aware of expected returns from equity and accept the volatility of it.

If you are the one who invests in equity through mutual funds and is skeptic about the returns you will earn from it then I will share a very interesting story with you which will help you to understand that you can also be comfortable with your equity investments, its volatility and earn the superior returns on your portfolio over the period and beat the inflation.

Think Equity As Your 3rd Child

Most families have two children. We spend a lot of money over a 25 year period in educating our children providing for all their needs, marrying them off- in short, getting them well settled in life. Now, think of Equity too as your child – Your 3rd Child. Put in the same amount each year into an equity fund that you spend on one child. Do that for the same 25 years. After 25 years, whether your real children look after you or not, this 3rd child will look after you very well for the rest of your life.

This is a very interesting aspect and the real outcomes are wonderful. Your equity investments need equal care and support as your other child needs too.

Don’t leave it when your equity child is not doing well, in fact, support it more, fund it more. In short, invest more when it is not doing well because it will always remember that you supported him in his worst phase and it will take care of You, all your life.