Many new investors hope to see big returns within a few months. This belief is common because we often hear stories about how someone bought a stock and saw it rise quickly. However, in reality, sustainable investing involves adopting a long-term view and understanding that potential results do not happen overnight.
One way to develop a long-term view towards investing is by focusing on megatrends. These are structural themes – such as the rise of renewable energy, digital payments, or healthcare access – that have a widespread impact and unfold over time.
They are shaped by changes in technology, policy, and consumer behaviour, and often take years to evolve. An investor looking for quick results may lose patience and exit too early, missing the later years when compounding over time may potentially reflect in the portfolio.
What time horizon really means
To put it simply, an investing time horizon is how long you plan to stay invested before you need the money. This could be:
- Short term: A few months to a year
- Medium term: Two to five years
- Long term: Five to seven years or more
The time horizon for structural themes is usually in the long-term category. That is because it can take several business cycles for a theme to mature, with ups and downs along the way. For example, the electric vehicle market is growing, but mass adoption, charging infrastructure, and supporting industries may take many more years to fully develop.
Understanding your time horizon helps you decide how much patience you will need and what kind of short-term ups and downs you are willing to accept.
Also Read: Megatrends in Flexi Cap Funds
Why patience matters for structural themes
Patient investing allows you to stay consistent during the slow early phase of a trend. Structural themes often face challenges at the start. These challenges could look like changing government regulations, high costs, or lack of awareness among consumers. Over time, these hurdles may be overcome, but only if the underlying trend is strong and backed by real demand.
When you hold your investments long enough, you give the companies or sectors time to potentially grow their revenue, expand their markets, and improve profitability.
How to understand long-term investing
Think of how to invest for the long term like planting a mango tree.
- In the first year, you may not see any fruit.
- In the next few years, the tree may start to grow slowly.
- After a few years, it may start giving you mangoes and over time, the harvest may grow.
Selling early is like cutting the tree before it bears fruit!
Another way to see it is like building a city. You start with roads and basic utilities. At first, there is dust, noise, some inconvenience, and little visible progress. But, with time, homes, markets, schools, and offices may start to appear, and the city may come to life. Structural themes need a similar sequence of groundwork before potentially yielding results.
At the same time, it is important to be aware that not every megatrend plays out as expected. Therefore, thorough research, regular monitoring, and diversification are key.
Mutual funds and structural themes
While noticing megatrends is an important mindset shift, investing in them directly can be challenging. Choosing the right companies, judging valuations, and timing investments require expertise. Mutual funds can provide a practical route to participate in such themes, since professional fund managers study these structural shifts, diversify across multiple sectors and companies, and adjust portfolios as conditions change.
For many investors, this can be a more efficient way to align with megatrends without having to track every development themselves. At the same time, mutual funds remain market-linked products, so returns are not guaranteed and patience is still required.
Tips to cultivate a long-term mindset
- Set clear goals: Know why you are investing and when you will need the money.
- Focus on the big picture: Follow how the structural theme is progressing, instead of following short-term price changes.
- Be realistic about timelines: Many trends can take 7–10 years to show full potential.
- Stay informed but avoid overreacting: News can cause short-term market swings, but these may not have an impact on the long-term story.
- Review, but don’t obsess: Check your investments periodically to assess if they still match your goals, but avoid making frequent changes without substantial reason.
Also Read: What is Green Energy Megatrend
Conclusion: Growth takes time
Structural themes evolve over time. While the early years may test your patience, the later years have the potential to result in growth. The idea is to make sure that your investing time horizon is in tune with the nature of the theme. At the same time, resist the urge to rush results.
Growth, whether in markets or in nature, rarely happens all at once. It is a steady process, and the investors who understand this can potentially benefit over time.
At Bajaj Finserv Asset Management Ltd, we aim to harness the power of megatrends by offering investors access to themes shaping the world’s future — from clean energy to technology, innovation, demographic shifts and more. Many of our funds follow a megatrends investment approach to help you participate in these long-term shifts, with a focus on growth potential and diversification. Build your future-focussed portfolio with Bajaj Finserv AMC.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
This document should not be treated as endorsement of the views/opinions or as investment advice. This document should not be construed as a research report or a recommendation to buy or sell any security. This document is for information purpose only and should not be construed as a promise on minimum returns or safeguard of capital. This document alone is not sufficient and should not be used for the development or implementation of an investment strategy. The recipient should note and understand that the information provided above may not contain all the material aspects relevant for making an investment decision. Investors are advised to consult their own investment advisor before making any investment decision in light of their risk appetite, investment goals and horizon. This information is subject to change without any prior notice.
The content herein has been prepared on the basis of publicly available information believed to be reliable. However, Bajaj Finserv Asset Management Ltd. does not guarantee the accuracy of such information, assure its completeness or warrant such information will not be changed.The tax information (if any) in this article is based on current laws and is subject to change. Please consult a tax professional or refer to the latest regulations for up-to-date information.
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