Once upon a time, Mr. Hare and Mr. Tortoise started a monthly SIP of INR 10,000 in Sensex at the start of the year 2000.
Mr. Tortoise continued his SIP for 20 years going through ups and downs of the market patiently.
While Mr. Hare gave into his fears and paused his SIP whenever his investment value turned negative on market falls. He re-started SIPs when markets bounced back. He stopped and started SIPs four times for few months in years 2001-02, 2008-09, 2011-12 and 2015-16#.
They met again after 20 years.
Mr. Tortoise had invested Rs. 24 lacs over these 20 years non-stop.
Mr. Hare had invested 19.9 lacs over the same period with 4 stops.
Can you guess who won the race??
Mr. Hare investments has grown to INR 84 Lakhs*
While Mr. Tortoise investments grew to INR 1.05 Crores*
Mr. Hare tried to be smart and stopped investing during market falls. Whereas Mr. Tortoise slowly & steadily continued his SIP through the market cycles & won the investment race.
# Mr. Hare paused his SIPs from May 2001 to Feb 2002; Mar 2008 to May 2009; Oct 2011 to June 2012; Oct 2015 to April 2016
* Value as on 1st Jan 2020. Past performance may or may not be sustained in the future.
Data Source: https://www.bseindia.com/indices/IndexArchiveData.html
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