First of all, 59X in 24 years isn’t our performance.
Our track record advisory is for less the 3 years, with decent performance of all the portfolio that I have designed, be it bear market or a bull.
So, who has delivered 59x in 24 years?
Recently I came across fund DSP Flexi Cap (Old Name DSP Equity Fund) and found some interesting bits and believe the same should be helpful for those who are increasingly getting disappointed with the performance of the stock market and also who think investors always loss money.
The interesting bits are as below:
59x since 29th Apr’97, i.e. an investment of Rs 100,000 in Apr’97 would now —Rs 59,00,000
55x in 24 years amounts to—19% CAGR…better than most of the asset classes.
However, as one would imagine, the journey wasn’t all smooth.
There was a 1-year period wherein the fund went down by 54%.
There was also a 3-year period with -27% return.
These were the larger ones and of course there were several short-term falls.
What is important to note is that in the last 24 years we have had all kinds of negative events: Dot-com bubble burst, 9/11 attack on US, fall of NDA Govt. in 2004, one of a kind 2008-09 recession, 2011-13 slowdown and presently ongoing medical problem Covid-19.
Through all this, only 41 people stayed invested with the fund since inception. In my view is that the fund may have witnessed the highest redemption during the 54% fall or the 3 years period with -27% return.
Ironically though, those who invested during periods of drawdown, made much higher returns in the subsequent periods while the ones who redeemed lost out on an opportunity.
However, if history is in any way suggestive of the future, periods of crisis/drawdown have offered the best opportunities for investment.