The above is such a simple and yet profound statement, shared by Vinit Sambre, CIO at DSP Mutual Fund, during a conversation we had last month. Back in the day, information inefficiencies used to be a huge arbitrage in equity markets. However, with the advent of technology, it has become increasingly less significant. So, the longer you stay patient and invested, the better your chances of higher return. You just had to see the traders’ data released by SEBI recently.

As per the study, only one out of 10 traders made profits in FY 21-22

The good news about time (when it comes to investment horizon at least): most of us have it in abundance 😊

Then why is it difficult to use time to create meaningful wealth? Answer: Uncertainty

Human beings hate uncertainty in their lives. We are ill-trained and not really conditioned to handle uncertainty in our lives. Mind you, it’s not as if we despise uncertainty in all settings. We love it while watching a movie or our favourite sporting contest. We just don’t like it our own lives (courtesy this wonderful  The Knowledge Project podcast  with Executive coach Carolyn Coughlin)

As you can imagine, as an equity investor, uncertainty is a real certainty and hence the challenge of staying on course for long periods. Let me share an example. During the covid crisis (Mar 2020) and prior to that Lehman collapse (also known as Global Financial Crisis, 2008-09), equity markets corrected and thereafter saw a V-Shaped recovery. Now the next time we see a similar deep and sudden correction, we would again expect a V-Shaped recovery. Markets might not play out in similar fashion, and we might end up frustrated.

Uncertainty is not Risk

And it’s important to know the difference between the two. Seth Godin has written about it beautifully in one of his blogs. This is what he says about uncertainty and I quote.

Uncertainty implies a range of possible outcomes.

But a range of results, all uncertain, does not mean you are exposing yourself to risk. It merely means you’re exposing yourself to an outcome you didn’t have a chance to fall in love with in advance.

 Read more about it here : Uncertainty is not risk

So let’s buckle up and start expecting uncertain outcomes as investors ( in life as well, but that’s not our domain really). That’s a ‘certain’ way to building wealth for your passion.

Disclaimer: Any calculation shown in this post is only for illustrative purposes  and based on prevailing tax laws and the past performance of a fund or investment is not an indicator of it’s future performance. The data used in this presentation has been taken from several sources. Neither BuckSpeak nor any of its employees or Subir Jha vouches for the authenticity of the data. Investing in mutual fund comes with market risk. Please read all Scheme Information Documents (SID) /Key Information Memorandum (KIM) and addendums issued thereto from time to time information and other related documents carefully before investing. Past performance is not indicative of future returns. Please consider your specific investment requirements before choosing a fund. Investment should be done in consultant with a financial planner/consultant, who would recommend products aligned to your needs and risk profile. There are no guaranteed returns.  Neither BUCKSPEAK NOR ITS EMPLOYEES, makes any warranties or representations, express or implied, on products offered and would be responsible for any losses from these investments. The company earns commission from Asset Management Companies when the user buys mutual funds. However, the recommendations on funds is not influenced by the commission earned