These are the golden words of wisdom from ace Tennis player Mahesh Bhupathi to a corporate luminary on how to cover the miles in long distance running. This appeared in an interview in Mint in August 2016 (click here for the article). Not only running, these lines are also true for ‘winnability’ in any kind of sport be it cricket, tennis, football, swimming, etc which tests one’s endurance over time. Finally, it is not just a question of one’s height, weight, training, country, etc that produces winners but the strength of the mind which decides that ‘Today, I want to win, come what may.’

The same principle also applies if you want to create wealth through market linked investments like equity mutual funds. While it is much simpler and easy to stay invested in assured returns products since the time-frame and maturity value is pre-defined, it is increasingly difficult to stay invested by withstanding the market fluctuations or negative returns when it comes to investing in equity products. However, this risk can be diluted to a great extent if one stays invested for the long term, say 5, 10, 15, 20 years. Saying this is very simple but the big question is, ‘how to stay invested without giving up?’

Like running, the strength of the mind comes into play when one needs to stay invested for the long run in equity funds. This is because, investors tend to sell off early on two counts – one, if the market dips to a large extent, they sell-off to prevent further losses and two, they sell-off to book profits if the market rises fast in a short period. Either ways, endurance is the need of the hour and one needs to select longevity to create wealth. Another factor common to long distance running and investing is the speed. Clearly, the speed is slow but steady. Similarly with investments, it may be small but consistent. Mutual funds offer this convenience through Systematic Investment Plans or SIPs which work like an EMI or an equated monthly instalment. The only difference is that SIP is an investment and not a loan instalment.

To sum it up, just like a long distance runner’s real test is that of the mind and not the legs, your investment journey to create wealth can only be successful if your mind can help you withstand short term market fluctuations. This could be achieved by consistently investing through SIPs over the long term.

Use the SIP calculator to calculate your returns and your monthly investments.

Information contained in this article is not a complete representation of every material fact and is for informational purposes only. The recipient is advised to consult its advisor/ tax consultant prior to arriving at any investment decision.