Having spent over 15 years in Capital markets and knowing that over 80% of new account holders are first time investors and most of them find it difficult to understand and sometimes experiences which led to believe it’s place for gambling, I’d like to share my insights through what I like to call.
But before moving onto W’s of it” I’d like to set a reasonable expectations that one can have from markets.
We will never be rich/Crorepati from the stock market overnight.In fact, may be not in 1 or 2 years unless of course we start with 1 Crore. Be patient enough to give time to investments to grow and take advantage of time. Remember, Rome was NOT Built in a day.
This term has always baffled me. Actually, makes me wondering that how long is long enough to be considered as long term?? Some experts say, 1 year and someone like billionaire investor Mr. Buffet says it’s holding onto stocks forever. In my opinion, both the statements are very unreasonable.
Agree that we can’t be expecting marvelous returns from market in a year but holding onto our investments for eternity won’t do much good to us other than giving sense of security or building wealth for our generations to follow. We won’t be living to enjoy it.
Whatever the case may be, one thing is sure that we must be patient with our investments and have a long term view. The longer, the better.
Now, to W”s of it-
Some invest to earn daily income,some trade full time and make or atleast try to makeliving out of it because of freedom it provides. And then there are people looking to recover their previous losses with almost similar approach with led them to losses at first place. For me, when I had started working, it was to join inFIRE (Financial Freedom & Retire Early) movement. Identify your why for yourself.
Thankfully, we are long past the period where Broking Companies used to provide its clients a designated Relationship Manager and that RM’s only job was to make us buy any crappy and/or blue- chip company just because they have a feel for it and/or heard about it. Further worse was to make us learning about F&O market and its strategies.
It was like preparing a toddler for Olympic run, you can imagine the results for yourself. No concrete research, none so ever. RMs main job was to generate enough revenue to justify his cost and may make hefty incentives out of it.
Nowadays, stock brokers are more advanced and using technologies like AI, for research and providing recommendations and icing on the cake is all of that is coming at a cost of peanuts, thanks to discount brokers.
Do remember, as a beginner, we must stick to basics and invest in companies with actual profits, long history of deliveringfavorable results. Most of these companies, you already must have heard in your daily routine.
As a saying goes “Right time to plant a tree was 20 years ago”. Start early, reap maximum benefits. You would be surprised to know what a difference couple of years can make in your overall portfolio. Since we are sticking to basics, just know that a 25 year old investing 10K monthly in stocks will have higher corpus than a 35 year old starting with 15K a month till 60 years of age.
Make a monthly routine to invest in stocks to yield maximum returns, corpus 5-10 Cr is in pretty must achievable if we can follow just the basics of investment.