Warren buffet has been screaming for people to compound wealth in the markets. What you are discounting is how many investors will stay the course leaving their MFs untouched for 30 years disregarding market swings etc etc. If this correction continues you will see redemption pressure overnight. Let me ask you something, Take USA and China for eg. youngsters there still dont know anything about investing and compounding. Ive met people who have studied and who work in investment banking and dont understand simple compounding. You tell an Indian that you wont make money for the first 10 years they wont be interested in holding their investments.
I cannot understand why everyone doesnt just dump money in MFs. Or for that matter in the USA index funds. Results dont show overnight, nobody does it.
Due results coming only after long periods of holding, retail investors dont put large amounts of money in MFs. They will buy insurance policies, they will buy products, cell phones. An Indian on 50k a month minus monthly expenses wont put more than 2.5k a month into MFs I guarantee you. And when the time comes to buy his house he will redeem his investments. Everyone starts, no one sticks to the plan. You are 26 today. 10 years from now I wonder how many of your friends will increase SIP or even hold their investments.
I will tell you something, in the next 10-15 years there will be huge in flow into MFs and funds. No doubt, people will know more and get more educated I agree. Everyone will invest in MFs. Not many will have the common sense to go and buy these amc companies from the open market and ride the theme. End of the day, I can virtually guarantee you that no one will take investing seriously enough to hold investments for 30 years to see results/ no one will invest big enough to see a massive return even post compounding. Nobody will dump 10-20-30-40 lakhs today and leave it for the next 30 years.