Good things in life never come easy

Equity investing is almost the only way for most of us to create wealth. Equity is inevitable to create wealth. The path is clear. It is the journey which is difficult.

Markets do not provide returns in the way we like. A stock may not deliver any returns for many years and provide many years return in a single year. Markets can test your patience greatly. Some give up precisely at the wrong time, only to see that stock soaring subsequently.

Markets go through years of positive returns, negative returns and no returns. Our initial experience varies based on when we entered the markets. If in first few years of investment we see negative or no returns, we tend to give up.

That's why we suggest equity for a period of not less than five years. Good and bad years get evened out over this period. Over 5 years of investing horizon, 80 per cent of returns come in 20 per cent of time. This means you need enormous patience during the 80 per cent period to reap the reward in the remaining 20 per cent.

Patience is the most difficult trait to develop. Patience involves pain and none of us like pain. But without patience and developing the understanding that returns are never linear but always lumpy, it is impossible to create wealth.

Only few create wealth from markets because the journey is not emotionally easy. Unless you learn not to react to your emotions, develop right understanding and enormous patience, it is impossible to create wealth.

Nothing meaningful in life can be achieved without pain so is wealth. Wealth or lack of it makes enormous difference to our life on earth. So, embrace pain and patience.

Happy Investing!

(The author is SEBI-registered Investment Advisor. He is Founder & CEO of Ananya Research Investment Advisors. View expressed in the article are his own)