Take heart if you are losing money in the markets. If you stay invested for a five-year term, it may just pay off. There are reports that 87% of India's oldest mutual funds have outperformed their benchmark indices over a 5-year period.

Investors should have a three to five year horizon is an often repeated line. The reason is that 54 out of the 62 diversified equity funds in the market with at least a five-year track record have outperformed their benchmark indices.

Magnum Contra leads the pack. It outperformed its benchmark index by 24% with 63% returns over a five-year period. Large cap fund Reliance Growth follows with 62% returns. It has outperformed its benchmark by a similar number. And SBI Mutual Fund's Magnum Global ranked third; it has overtaken its benchmark by 20% over five-years with 59% returns.

However, eight such funds have fallen behind their benchmark indices over this period.

Top laggards include LIC Mutual's Equity Fund and Birla Mutual Fund's Dividend Yield Plus. They have underperformed their benchmarks by 5-9%. LIC Mutual's Growth Fund too has not proved itself.

But what's interesting is that in the last six months, which is a good example to see both the upside in the market towards the end of 2007 and downturn in early 2008, only two out of the 62 funds with a five-year track record have managed to hold strong.

While all other funds have shown negative returns, HSBC Equity Fund has given positive returns in the last six months. This large cap fund has outperformed its benchmark by 8%.

Sahara Mutual's Growth Fund has also proved strong in the last six months. And this shows that patience always pays, especially when it's about your investments.

by Pooja Meswani, CNBC-TV18

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