By Nitin Ghai (Certified Mutual Fund Distributor)      

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When it comes to mutual funds, most conversations are about returns.
“12% CAGR, 15% CAGR, double your money in 5–6 years…”

But hardly anyone asks the more important question:
👉 “What are the chances I will lose money if I invest?”

That’s the real worry investors carry in their mind.

So let’s flip the script. Instead of only talking about “average returns,” let’s see the probability of loss across different holding periods, based on historical data of the Nifty 50 Total Return Index (1992–2024) — a fair benchmark for diversified equity mutual funds.

• 1 year: Around 1 in 4 times (24%) investors ended up in loss. Worst cases were brutal — during crashes like 2008, losses touched –40% to –50%. But the best years gave +90% returns. That’s why short-term investing is risky.

• 2–3 years: The odds improve. About 80–90% of the time, investors made money. The worst 3-year stretches were only slightly negative, while the best 3 years doubled or tripled wealth.

• 5 years: Almost no case of loss. Even if you started at a bad market phase, by year 5 history shows you were likely in profit.

• 10–15 years: Virtually zero chance of loss in history. Instead, wealth multiplied 3–4x with annualised returns in the 12–15% range.

* Data quoted here is historical (based on Nifty 50 TRI rolling returns) and meant only to illustrate the benefit of long-term investing. Please consult your advisor before investing.

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Now add SIP (Systematic Investment Plan) into the picture. Instead of putting all your money in at once, SIP spreads it across market highs and lows. That reduces your chances of catching a “bad year” and further lowers the probability of loss.

So yes, mutual funds can give attractive returns. But the real story is this:
📌 The longer you stay invested, the lower your risk of loss — until it almost disappears.
📌 And the power of compounding turns patience into wealth.

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Disclaimer: Mutual fund investments are subject to market risks. Past performance is not a guarantee of future results. Educational purpose only, not investment advice.

🔖 #MutualFunds #SIP #Investing #WealthCreation #FinancialPlanning #PersonalFinance