What is the benefit of staying invested in the long term?

Many Mutual Fund distributors and investment consultants will tell you to invest for the long term. This is particularly true for certain mutual funds, such as equities and balanced funds.




Let's look at why specialists offer such recommendations. What happens in the long run, exactly? Is there a benefit to investing for the long term?

Consider your Mutual Fund purchase to be a good batsman. Every top-tier batter has a distinct batting style. However, if a good batter plays for several years, he will be able to earn a large number of runs.

We're talking about a "good quality" batsman's track record. Every good batsman will have some strong and weak outings. The track record would be impressive on average.

Similarly, a solid Mutual Fund will have ups and downs - often owing to events outside the fund manager's control. If an individual invests in these funds for a long time, he or she will reap the benefits.

So, as long as you can, stay invested for as long as you can – particularly in equity and balanced funds.

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