You don't need Long Time to see the Compounding Effect

I have been investing in the market from the last 8 years and as you can see that I can actually see the compounding effect in the last 2 years where the current amount is much more than the invested amount.

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So it actually took me 6 years for the compounding to kick in. So that's why you don't need a long time to see the compounding effect. And this is just the beginning, if I remain invested this compounding effect can rise like anything. My investment is also increased in last 8 years. I remeber I have started investing with just Rs 1K and now I am investing some good amount in the market.

Along with that there is small up and down in the graph because I have invested lumpsum as well as done some rebalancing. As of now in Equity, you can see only 3 funds because these are active funds like small cap, flexi cap and mid cap. Whereas most of my money is in large cap and that too using the passive fund or index fund.

I have moved most of my money in the index fund as 90% of the funds doesn't beat the index. Like if I take my ETF startegy, I have around 21% returns in last 1 year whereas the Nifty 50 has given 23% returns so my startegy is giving me 1% less returns in last one year.

But I will continue with my ETF strategy because that is giving me returns every month and this compounding will help me in future when I have good sum of money to invest. Like booking profit every month. Since the market has gone down in last 3 days, I didnt got any sell but I am getting buy signal. So I am actually buying the dip but one at a time. I am not adding any new capital to buy because of the volatility of the market.

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