In early October 2024, a client reached out to me wanting to invest in equities. I walked him through how equity funds are meant for long-term growth, while debt funds offer stability for shorter-term needs. We matched investments to his goals’ timelines.
He went ahead and invested. But just yesterday, he called again: “I need the money for my son’s education in the UK.”
I checked his portfolio—it was almost flat, barely ahead of where it started. And honestly, that made sense—the Sensex and Nifty had barely budged in that same span. So it wasn’t a bad pick; it was simply bad timing.
Then I remembered—it wasn’t the first time. He’d done this before: investing, then withdrawing when life got pressing.
This pattern is all too common. Investors enter with hope, but exit prematurely or at the wrong time, often seeing little or no gains—and sometimes, losses.
An Insight from a Seasoned Fund Manager
Chandraprakash Padiyar, who manages significant pools of funds like Tata Small Cap Fund and Tata Large & Mid Cap Fund, recently made a point that struck a chord.
He spoke about a fund that had completed 20 years with a CAGR of 18%. That means money doubled roughly every 4 years. ₹1 lakh invested at the start would have grown to more than ₹27 lakhs.
But here’s the striking part: out of lakhs of investors who had entered and exited along the way, only 23 investors had stayed invested since inception. They were the ones who reaped the full reward.
Everyone else — who had access to the same fund, same opportunity, same markets — got off the ride somewhere in between.
As Warren Buffett famously said:
“The stock market is a device for transferring money from the impatient to the patient.”
You can watch the interview here:
👉 Chandraprakash Padiyar interview on YouTube
Why Do Most Investors Miss Out?
The problem is rarely the equity market itself. It’s usually our own behavior as investors.
Entering at Market Highs
Most people come to equity when markets are hitting new highs. In September 2024, the market touched a record 26,277. Every day the headlines screamed “markets at lifetime high.” Stories of quick gains circulated on WhatsApp.
That’s when greed pulls in first-time investors. But when you enter at euphoric levels, short-term returns are bound to disappoint.
No Clear Goals
If you don’t know why you are investing, you’ll withdraw the moment a financial need arises. Equity is meant for long-term wealth creation, not to fund next year’s tuition fee or a vacation.
Lack of Patience
Markets don’t move in a straight line. They rise, fall, stagnate. If you panic at every fall or get frustrated during flat periods, you’ll exit too soon.
Believing in Timing
“I’ll buy when markets dip, I’ll sell when they peak.” Sounds great in theory, but almost impossible in practice. In reality, it’s staying invested that works.
Mixing Short-Term Needs with Long-Term Money
Money needed in 1–3 years should never be in equity. Using equity for emergency or near-term needs is like bringing a cricket bat to a football game — wrong tool for the job.
What Sets the 23 Investors Apart?
They weren’t insiders or market gurus. They simply had:
🌊 Patience — to ride the ups and downs.
🛤️ Discipline — to stay the course.
🎯 Clarity — that equity is for long-term goals only.
The Real Lesson
Equity markets are like a train that will eventually reach a prosperous destination.
-
Some passengers stay till the last stop — they reach wealth.
-
Some get down at the first delay or turbulence — they never see the benefits.
The real driver of wealth is staying invested—₹1 lakh can turn into many times more in 20 years when you give time to the market.
✅ Takeaway for Investors
Don’t invest in equity without a clear goal and time horizon.
Don’t use it for money you may need in 1–3 years.
Stay disciplined and allow compounding to work.
Because at the end of the day, the same equity market can either be your rocket to the moon — or a bus ride that feels like it went nowhere.
💡 “You don’t need to time the market. You need time in the market. If you’re unsure how to match your investments with your life goals, that’s where I can help.”
Join Our Mailing List
Once Weekly Webinar
Free Webinar Once Per Week
Our free webinar runs once per week and is available to anybody who wants to know more about getting started on the road to financial freedom.