I have been investing in mutual funds for the past 6-7 months. What is the minimum return that I can expect?
-Mahendra
Mutual fund investments don’t come with any kind of a guarantee of returns. Different kinds of funds give different returns over varying time periods. If we look at the past 20 years, investors have received returns of as high as 50 per cent in one year and even lost 40 per cent of their money in one year. In the past 5 years, average returns have been of around 18 per cent. But if you had invested during the bad times, you could be facing losses of 6-7 per cent annually. Since equity funds are market-related instruments, they don’t give any sort of a guarantee of returns. But for a long-term period of 5-7 years, equity investments can give you better returns than fixed income investments.
This article was originally published on April 11, 2012.
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