Up 50 percent. Then down 50 percent.
The average says zero. You are down 25.
75
What Rs 100 is worth after a plus 50 year and a minus 50 year. The two moves average out to nothing. Your money does not. It sits at 75.
Friend waves his fund statement at me, thrilled. Averaged 12 percent a year, he says, tapping the number the app prints up top. I asked what he actually turned his money into. Long pause. Because the average return a fund advertises and the return you compound are almost never the same figure. The gap even has a name.