There is a story about an American lady, Sylvia Bloom. She was a legal secretary who worked at the same firm for nearly seven decades. She lived with her husband in Brooklyn, a modest, but comfortable life, riding the subway to work most days. When she died in 2016, her net worth was in the vicinity of $9 million! How did she make so much money? She bought stocks, and held on to them through highs and lows.
We earn, save and invest so that our investment corpus grows substantially. Acquire a good investment, and hold on to it for years. Through these years, there will be lots of turmoil. Look at some of the extreme and frightening events of the past years :
2000: Dotcom meltdown
2001: 9/11 terrorist attacks on the Twin Towers in New York
2003: War in Iraq
2008: Global Financial Crisis
2010: European debt debacle
2020: Brutal bear market as the world went into a pandemic-induced lockdown
From 2022 onwards: Russia-Ukraine war, conflict in the Middle East.
Markets crash, and markets rise. Those who stay invested, or continue investing in downturns, will benefit from the upward trajectory.
How to Create Wealth from Mutual Funds :
- Have a Long-Term Mentality.
- "Develop patience". It is a great asset to have.
- If you act on sentiment and emotions, and react to the news, you will not be able to create wealth.
- Never sell in Panic, because when the market rebounds you will miss out on all gains.
- Never stop investing in a downturn, because that is when you get the best prices. As renowned Investor Shelby Davis says, “You make most of your money in a bear market, you just don't realize it at the time.”