Use this calculator to simulate sensex returns from 1980 onwards. This gives you an idea of how the stock market works. If you average sensex returns over a 15-year or 20-year period you will get somewhere like 10%-15% so staying in equities for a long time is crucial. Howeverwhen you start investing can affect your corpus. You can get a feel for that with this calculator.
Don't get worried about the wild swings in the corpus. With a well balanced porfolio all financial goals can be met provided the adequate amount is invested.
We use past history because that is all we have. The future can be very very different. It is however our hope that in the long run we will get decent returns that beat inflation. We have history on our side to bolster our hope!
Update: the simulator now returns CAGR for constant SIPs.
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