With the Employees Provident Fund Organisation (EPFO) starting to invest in stock markets, Minister of State for Finance Jayant Sinha on Thursday said empirical evidence suggest that equity market perform better than any other asset class over a long period of time.
“All of those empirical evidence is also corroborated by the Indian equity markets, which have been volatile. But in the long-run, they have demonstrated quite impressively, it is almost better than any other asset,” Sinha said at a conclave organised by Pension Fund Regulatory and Development Authority.
Sinha said data suggests that systematic investment plans and average costing approach generate the best returns for long-term investors, making a case for EPFO investing up to 15 per cent in stocks.
Average costing approach allows investors to accumulate stocks when the markets are down.
“As you know there is an ability for EPFO to go up to 15 per cent in the equity markets (investment)… the benefit of average costing should be available to people saving for retirement because the equity markets will go through ups and downs,” he said.
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