Expecting consistent returns every year

When your advisor tells you that you can expect say 12 per cent returns, compounded annually over 5-10 years, you naturally expect these returns to show up every year in your portfolio.

But, the idea of suggesting 'long-term' investment is based on the fact that you may witness losses in the interim. If it were possible to generate returns consistently in equities, then why would anyone invest in fixed deposits at all?

Consider this: when you invest in stocks or mutual funds, you become a business-person. No matter what you do professionally, you end up doing business in this case.

Sure you are not involved actively in the business. But you are like a sleeping partner or a non-working partner.

Does doing business suit you? Similarly, is equity your cup of tea? You have to ask these questions to yourself. Losing your peace of mind over your equity investment is not worth it.

You have to be strong. Else, don't do it at all.