The Power of Compounding – The Economic Times


Compounding has the potential to do wonders for your investment returns without doing much hard work. It can make all the difference between a mediocre investment strategy and one with robust long-term results. Of course, it requires patience to stay invested and not get swayed by external factors; but if you let compounding do its work, your returns can grow exponentially over the long term. The critical factor is the starting point. The earlier you invest, the greater the benefits that can accrue from compounding. It’s a concept that can reap rich rewards when investing in mutual funds too.

But how does the
power of compounding work in mutual funds? Does compounding work magic when you invest in mutual funds through the SIP route? And what are some of the basic steps that you can take that can help you benefit immensely from compounding? Read on to find out more.


Helpful information for investors: All Mutual Fund investors have to go through a one-time KYC (know your Customer) process. Investors should deal only with registered mutual funds, to be verified on SEBI website under ‘Intermediaries/ Market Infrastructure Institutions’. For redressal of your complaints, you may please visit . For more info on KYC, change in various details & redressal of complaints, visit This is an investor education and awareness initiative by Nippon India Mutual Fund.

The information herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. The document has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. The sponsor, the Investment Manager, the Trustee or any of their directors, employees, associates or representatives (“entities & their associates”) do not assume any responsibility for, or warrant the accuracy, completeness, adequacy and reliability of such information. Recipients of this information are advised to rely on their own analysis, interpretations & investigations. Readers are also advised to seek independent professional advice in order to arrive at an informed investment decision. Entities & their associates including persons involved in the preparation or issuance of this material shall not be liable in any way for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including on account of lost profits arising from the information contained in this material. Recipient alone shall be fully responsible for any decision taken on the basis of this document.


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