Patience pays: How long‑term investing works its magic

Investing in fundamentally strong companies at reasonable prices—and then simply holding on long enough - can work wonders for your wealth. The Long‑Term Growth Portfolio is built on this very philosophy: buy quality stocks, be patient, and let compounding do the heavy lifting. To understand why this approach leads to prosperity, let's look at three real-world stories that illustrate the power of long-term investing.

Reliance's golden bet on Asian Paints: Patience through the crash

In early 2008, amid a brutal market crash,Reliance Industries made a bold move: it quietly acquired about 5 per cent stake in Asian Paints for roughly Rs 500 crore​. Almost immediately, the global financial crisis sent Asian Paints' stock tumbling nearly 40 per cent. But Reliance did nothing - except hold on. This forgotten investment turned out to be a masterstroke. As markets recovered, Asian Paints thrived, and by mid-2016, Reliance's stake had swelled to over Rs 5,250 crore in value (a 10× return in about eight years)​. Fast forward to today, that same ~4.9 per cent stake (held via Reliance's subsidiary Teesta Retail​) is worth over Rs 11,000 crore, having generated more than Rs 800 crore in cumulative dividends along the way. Remarkably, Reliance still owns the stake as of FY2023-24​.

The lesson? Even a blue-chip stock can face gut-wrenching drops in the short run, but if its fundamentals remain strong, staying invested pays off. Reliance's patience through 2008's volatility was handsomely rewarded over the long term. It's a vivid example of how wealth in the stock market is often built by holding quality companies through thick and thin, allowing years of growth, dividends, and compounding to work their magic.

Suggested read:Quest for quality

Resilience of top stocks: Bouncing back from crashes

Even the best companies see red during market crashes, but their long-term trajectory rewards steadfast investors.

History shows that even the most successful stocks are not immune to short-term pain. During the 2008 subprime crisis and the March 2020 COVID-19 crash, virtually every stock - even top-quality ones - plunged sharply. It was a scary time for investors, and many panicked sellers cashed out at the worst possible moments. Yet those who held onto great businesses emerged richer. In fact, if you examine India's 10 top-performing stocks of the past two decades - a list that includes Bajaj Finance, Titan Company, Havells India,Eicher Motors, Pidilite Industries,SRF, Divi's Laboratories, Trent, Shree Cement, and Cholamandalam Investment Finance - a clear pattern stands out. Each of these now-famous wealth creators suffered significant drawdowns during the 2008 and 2020 crashes (in many cases, drops of 30-60 per cent or more from their peaks), but each one recovered and went on to multiply investors' money manifold in the long run.

For example, Bajaj Finance's stock plunged over 80 per cent in 2008-09, falling to just about Rs 5 per share at the bottom​. It was hard to imagine at the time, but that same stock then proceeded to skyrocket over the next 15+ years - rising by more than 1,00,000 per cent (yes, six figures) from those lows​. Titan Company, to take another case, saw its stock nearly halve during the global financial crisis and again slump during the initial pandemic panic, yet over 20 years, Titan has delivered well over 100x returns to its steadfast shareholders. The other companies in this elite group show similar stories: periods of steep decline followed by tremendous long-term growth.

The takeaway? Short-term market crashes are mere detours in an otherwise upward journey for fundamentally strong businesses. Investors who resisted the urge to sell these great stocks in despair - and instead held (or even bought more) during the downturns - were richly rewarded. On average, these ten stocks have compounded wealth at roughly 30-50 per cent annually over two decades​, turning every Rs 1 lakh invested into crores.

In essence, volatility is the price of admission for extraordinary returns. The market will have its scary moments, but quality companies tend to not only recover, they prosper. Staying invested through the turmoil is what separates those who merely temporarily lose money on screen from those who build life-changing wealth.

Suggested read: The futility of market timing

Ronald Read: The janitor who built an $8 million fortune

Our final story drives home that long-term investing isn't just for conglomerates or finance wizards - it's for everyone. Ronald Read was a gas station attendant and janitor in rural Vermont, earning modest wages and living a frugal life. Yet when he passed away at 92, he shocked everyone by leaving behind an $8 million stock portfolio for his local library and hospital​. How did he do it? Through patient, consistent investing over decades in businesses, he understood.

Read never earned a high salary; he simply saved diligently and put his money into blue-chip, dividend-paying stocks like Johnson Johnson, Procter Gamble, JPMorgan Chase, andGeneral Electric​. He avoided anything he didn't understand (no chasing hot tech trends or speculative fads), and he never tried to time the market. Instead, he held his stocks through every up and down, quietly reinvesting his dividends and letting compounding work quietly in the background. Over roughly 40 years, this unassuming janitor's steady investments snowballed astonishingly. By living below his means and never selling in panic, Ronald Read was able to turn a series of small, regular stock purchases into an eight-figure fortune​.

His story is a powerful reminder that building wealth doesn't require extraordinary skill or insider knowledge—just extraordinary patience and consistency. You don't need to be a millionaire to start; Read certainly wasn't. But by thinking long-term, sticking with high-quality companies, and staying calm in the face of market volatility, even an ordinary individual can achieve extraordinary results. Ronald Read's legacy shows that anyone can harness the power of compounding, regardless of income level, as long as they stay the course.

Suggested read: How a car mechanic donated over Rs 29 crore to a hospital

Investing for the long run - Your path to peace of mind and prosperity

These stories all share a common thread: the real "secret" to wealth in the stock market is time in the market, not timing the market. Buying fundamentally strong companies at reasonable prices, and holding them long enough, allows the twin engines of earnings growth and compounding to exponentially increase your investment's value. Yes, there will be bumps along the road - sharp crashes, bear markets, and periods when your portfolio's value falls. But as the examples of Asian Paints, the top 10 multibaggers, and Ronald Read each show, those who stay invested through the storms come out far ahead of those who jump ship.

This ethos is exactly why we created the Long-Term Growth Portfolio. It's a carefully curated set of 10 high-quality stocks chosen for their strong fundamentals and long-term growth potential. In other words, the kind of companies you'd want to buy and hold for years. Our team of experts reviews and rebalances this portfolio periodically, so you can invest with confidence that you're always holding solid businesses at fair value. It's an ideal vehicle for a stock SIP (Systematic Investment Plan), allowing you to regularly invest a fixed amount and build your stake in these companies over time. By investing steadily and sticking with it, you are essentially following the proven formula behind all the success stories above - only now with the convenience of professional research and management.

Bottom line: Don't let short-term market fluctuations derail you from your financial goals. Embrace the long-term, quality-first approach - and consider making the Long-Term Growth Portfolio the foundation of your journey. It's not just an investment plan; it's a mindset of patience and discipline that can give you true peace of mind and the prosperity that comes with compounding. Take that first step today: explore our featured story on the Long-Term Growth Portfolio and think about starting your own stock SIP. Your future self will thank you for it.​