Know The Now – Riding the volatility

In the last decade, the Nifty has had multiple instances of drawdowns greater than 20% and has returned a CAGR of only 6.53%. This has led to investors posing the same tough questions to their fund managers and advisors, that they have demanded answers for in every market correction: “Why was my capital not protected?” And they get the same responses – the unexpected event that triggered the fall, volatility is part of the nature of equities as an asset class and the futility of trying to time the markets to prevent any losses (with some of the more articulate managers even channeling Amitabh Bachchan lines from gangster Bollywood movies).