No. Never. Are you CRAZY???? It’s a Gamble!!!! I don’t like to take risk. I’ll rather put MY MONEY, in MY PIGGY BANK.
If this is your approach to investing in the Stock Market, I’ll suggest you read this article
Yes, Yes, You’ll say, “I know this high risk, high return theory.
What else do you have to say Mr. Einstein??” …. We’ll yes, the theory
stands true, but there are many many important aspects beyond it. So
let’s pick them up, one by one
1. High Returns : Taking the long term and an
extremely conservative perspective, we have to agree that there can be
no other traditional methods of investment which yields higher returns
than the Stock Market. Lets say you invested Rs. 1 Lakh in the stock
market in the year 1990. If you would withdraw that money today you’ll
get some Rs. 26.5 Lacs (Sensex touched 1000 points in 1990, and it’s at
26500 points today). So your investment has swelled up by 26.5 times in
24 years, just by sitting on your investment.
Tell me which traditional source of investment gives you this kind of
return? FDs??? OR ULIPs ??? OR PPF ??? OR Govt Bonds??? OR your
favourite Mutual Funds(Which anyways invest most of the money in the
Let’s take a very rosy picture of your investment where you earned a
constant 12% return on your investment, COMPOUNDED annually. The Same
money would have fetched you just a little more than Rs. 15 Lacs. And
mind you my dear friend, this is a very high constant rate of return for
any other type of investment where you just sit on your money.
You can counter me, saying property can be a good investment. Yes,
infact it is an excellent investment. No doubts about it. But then
you’ll have to do a lot of brainstorming. Invest your money in interiors
of Rajasthan, OR invest in Gurgaon OR Delhi. But again than investing
in reliance and Infosys and ITC would have fetched greater returns. Here
we are talking of Sit on your Money, Apply no Brain Investment. J . And
Stock Market gives a superior return, is a no brainer.
2. Highly Liquid Market: For friends, who might have doubts about investing in land is better or stocks, this point will clear your doubt.
Stock Market is a highly liquid market. You will always have an option
to sell your stocks instantly, in case you need money in some urgent
In case of land, you will have to find a buyer who can give you your
desired amount for your land. Remember the buying and selling rates of
land vary a lot. This delay in searching a good buyer itself defeats the
whole purpose of needing your own money urgently in times of need.
Same is the problem with other types of investments. Remember breaking
FDs in times of need. OR paying the exit load to the Mutual Funds
Company. Restrictions on PF and Bonds.
3. Added Incentives: This is a supplement to the
first point mentioned above. We need to keep in mind that companies also
give regular dividend and bonuses to their stockholders. So if we add
that also to the 26.5 times return we calculated above, we are in for a
very very handsome bargain. Looking like a lucrative preposition
already? Wait my friend, there is more to it.
4. Opportunity to reinvest : Best part about
investing in stock market is, even if the market falls, and prices of
stocks come down, it is still not considered as a threat but rather an
opportunity to reinvest at lower rates. This helps to bring down the
average price of purchase and thus leads to overall increased ROI.
Example : You buy “X” stock at Rs. 1,000. Market falls and the price
of stock comes down to Rs. 800. This gives you an opportunity to buy the
stock again at reduced prices, thus bringing down your average price
per share to Rs. 900, instead of original Rs. 1000
Thus investment in stock market always provides you with opportunity to earn greater profits.
5. No minimum investment required : Unlike other
lucrative investment options like investing in land, where we need to
make heavy investments and thus tend to be a burden on us or work as a
deterrent in investing, stock market poses no such problems. You are
free to invest whatever amount you can spare for investment. You are in
control of your money.
6. Advantage of investing for short periods of time :
This feature makes stock market, perhaps the most sought after
investment option. User has the liberty of not only long term
investment, but also short term and intraday (buying and selling on the
same day) trading. It gives you a chance to exploit the market
conditions in short term scenario and make quick money. Stock market not
only helps to fulfil your long term investment goals, but also take
care of your short term investment needs.
7. Flexibility and ease of investing : Investing in
stock market is the easiest, least time consuming and No pain in neck
type of investment. All you need to have is a demat and bank account. In
today’s world with online trading at your fingertips, you can
instantaneously buy or sell shares, transfer funds between your trading
account and bank account with click of a button. Just Think, can you do
any other invest with such ease? It is even simpler than paying your
8. Regulatory Framework : Gone are the days of
Harshad Mehta type scams in the stock market, which made investors vary
of investing in the stock market. Over the years, organizations like
SEBI have established stringent regulatory framework to protect the
interest of investors. Investing in Stock Market today is one of the
safest types of investment.
We hope, that after going through the above, our friends who were
hesitant of investing in the Stock Market, must have changed their
perception on the same.
Have a happy and profitable time investing!!!