Lachhuka Insights

Dated 01.01.2026

 

General

It has been observed that Equity has given better return over a longer period of time. BSE Sensex has moved from 100 in 1980 (base year) to around 85000 now. NIFTY 50 has moved from 1000 in 1995 (base year) to around 26000 today. If we see Mutual Funds, HDFC Flex cap launched in 1995 at Rs. 10 is more than Rs. 2000 today.

But the Equity Market is volatile and there are periods of negative returns too.

As our goal is to accumulate funds to meet certain objectives, we will discuss only SIPs (Systematic Investment Plans) similar to Bank Recurring Deposits.

It is therefore important to identify the timespan required to meet the goal. Care must be taken to keep emergency funds in debt or liquid funds, especially the ones having no exit load.

If the investor has no enough corpus in hand for emergency funds, it is advisable to park a part of monthly savings in bank recurring deposit or SIP in liquid fund to create the corpus.

After meeting all these emergency needs, everyone has to save something for the retirement or even the goals like higher education.

There is no same set one rule for all. Different people have different needs.

Some people have ancestral house and there is no need to buy one.

Some people have pension income with some having it inflation adjusted one.

There are some, whose medical expenses are covered lifelong by the employer.

Some pensioners have to support their children after retirement, while some people can depend on their children.

Some may have forced retirement savings by way of PF and Gratuity entitlement, while some may not have the same luxury like Gig workers, Self-Employed Businessmen and Professionals.

Different situations demand different style of investment.

Whatever be the situation, a portion of savings must go to equity with enough patience to hold.

Returns comparison:

	03.11.1995	31.12.25 (Near figures)	Times (Approx)
HDFC Flexicap	7.88	2050	260
NIFTY 50	1000	26000	26
GOLD	4680	136000	29

 

The above table demonstrate that even the passive fund like NIFTY 50 (which is almost static for a year) almost matches with returns in Gold (which is more than 50% up in a year), while actively managed mutual fund outsmarts substantially.

There is no other way to accumulate a self-dependent fund.

We should not be shy of taking the help of an expert, if DIY (Do it yourself) is difficult.