A lot of people start investing in mutual funds, thinking they will get around 12% returns every year.
I used to think the same.
But over time, I realized that this expectation itself causes most of the problems.
Mutual funds don’t give fixed returns.
Some years are great, some are average, and some can even be negative. That’s just how markets work.
The issue is not returns. It’s how we react to them.
I’ve seen people:
- Stop SIPs when markets fall
- Exit investments too early
- Chase funds that performed well recently
And then wonder why they are not building wealth.
From what I’ve learned, a more realistic way to look at it is:
- Equity mutual funds: around 10–14% over long periods
- Debt funds: around 5–8%
- Hybrid funds: somewhere in between
Not guaranteed, but reasonable expectations.
What actually seems to work better:
- Staying invested for longer periods
- Investing consistently instead of timing the market
- Not reacting to short-term fluctuations
The biggest shift for me was this:
Instead of asking
“How much return will I get this year?”
I started asking
“Am I investing correctly for the next 5–10 years?”
That changed everything.
If anyone is interested, I wrote a more detailed breakdown here (no signup or anything):
https://niyyam.com/what-returns-can-you-expect-from-mutual-funds/
Would love to hear how others think about return expectations.