As Indian stock markets witness their longest losing streak since 1996, a Reddit user has ignited a debate about the long-term viability of mutual fund investments. The user questioned whether mutual funds could eventually be perceived as a scam if Indian companies fail to perform over the next 25 years.
“The young generation is heavily invested in stocks, some of us are investing most of our salaries in stock market. I just want to understand what can happen if say in next 25 years Indian companies can’t perform which can happen due to many reasons," the user wrote, adding "Even in 2025, the stock market is not realistically representing company performance."
The user added, “Historically, before 2010 very few of us were investing in stocks but now most of us have demat accounts and are heavily influenced to invest in stocks and most influencers give historical data as reason which does not make sense as we can't analyse the stock market when so many people are investing as market might have boomed just because so many of us started investing.”
The post triggered a flurry of reactions. While some dismissed the concerns, others acknowledged the risks and pointed to broader economic factors.
“Mutual funds are not a get-rich-quick scheme, but they ensure you don’t die poor if you follow a proper strategy," one user responded. "Diversification is key. Mutual funds have existed for nearly 100 years, and the last major collapse was decades ago."
Others linked market growth to economic progress. “India must get rich before it gets older. If not, by 2040, we’ll be stuck in the ‘Middle Income Trap,’ stalling company earnings and, in turn, stock prices and mutual fund NAVs,” one commenter cautioned.
Another pointed out that while India’s stock market has grown, its economic momentum has slowed since 2012. “Policymakers need fundamental reforms for the next growth phase. The market isn’t in a bubble—it’s just catching up with economic reality.”
Skeptics also weighed in on investor behavior. “Only 12% of Indians have demat accounts, and just 8% invest in mutual funds. Most people don’t have the patience for prolonged losses and will cash out when things get tough,” a user explained. “Capital markets aren’t for the weak-minded. Only those with the grit to navigate downturns will survive.”
Some reassured investors about mutual funds' built-in risk management. “Fund managers rotate stocks based on performance, just like Sensex and Nifty do. If you’re worried, consider a balanced approach with FDs, SGBs, or bonds.”
The debate highlights the uncertainty surrounding India’s economic future and the stock market’s role in wealth creation. While concerns about bubbles and downturns persist, many believe disciplined, diversified investing remains the best long-term strategy.