What my analysis tells me is that if DIY outperforms the corresponding index by 3-4% annualised, you will outperform the index even with a blended STCG cost of 6% on gains every year. Having said that, the outperformance is not that significant. Over a 15 year period, DIY with 20% CAGR will give you a 13x return on initial capital. Index fund with 16-17% CAGR will give you a 9-10x return on initial capital.
So in 15 years, 1 CR becomes 13 CR in DIY and 9-10CR by being in an index fund. The index fund will give you that return with 0 effort while DIY needs you to be disciplined with your effort over a 15 year period. I think the extra 3-4% return is only worth it if your effort is towards leveraged capital ( i mean if you are doing this on other people’s capital for a share of their profit as well ).
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