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Incase of long term investors there might be minuscule people who have lost money through stock markets. If they have made their investment after a long analysis of the target company. I am not talking about impulsive buying or buying done on basis of word of mouth or by listening to 'blah, blah' of certain 24*7 hrs investment TV channels.
This means stock market investing are always a long term bet where the returns might surpass average returns from bank FD's etc. However there is always risk involved in here, which can infact be minimised if investment is done after thorough analysis of the company by checking it's last 3 years balance sheets, management quality etc.
I'll give a example, If during last couple of years any share analyst put a buy on kingfisher airlines stock then the reason for putting 'buy' can be that he is paid by the company for bringing fresh money, or his analysis/mental power is worst then a retarded human being because the company 'Kingfisher Airlines have never come into profit since inception because of following two basic reasons:
1. Management quality is poor, with no analysis/mental ability present to run businesses. 2. Airlines company is very hard to get into profit in India, due to heavy taxation.
So it comes out to be again to this oneliner: 'stock investments are longterm bets after thorough analysis of dna of company to invest into'
Always invest for longterm in stock markets, for eg a person who invested in Reliance Industries in August 2002, His investment is up by over 5 times in 2013(yesterday's price), Such returns easily surpasses the returns from conventional investment options like bank FD's or govt bonds). On the downside, since the returns on stock investments are not guaranteed, you risk losing everything on any given investment. eg. If during early 2000's anyone invested in IT companies, he would have lost all his money after the dotcom bubble burst, when many companies went bankrupt.
Investing for long-term in single stocks is a risky affair, like we say if you put all of your eggs in a single basket, sometimes that basket may fail, breaking all the eggs. Other times, that basket will hold the equivalent of a winning lottery ticket. So it is better to diversify your portfolio(Even for a long-term perspactive). This diversification would also help in avoiding volatility of stock markets.
Still in 10 year plus time category of investments, stock markets returns are on top. Even if you had invested in stocks at the highest peak in the market, your total after-inflation returns after 10 years would have been higher for stocks than either bonds or bank FD's. This is because stocks allow investors to own companies that have the ability to create enormous economic value. Stock investors have full exposure to this rise in stock value, which no other longterm investment can match.
HAPPY TRADING!
Incase of long term investors there might be minuscule people who have lost money through stock markets. If they have made their investment after a long analysis of the target company. I am not talking about impulsive buying or buying done on basis of word of mouth or by listening to 'blah, blah' of certain 24*7 hrs investment TV channels.
This means stock market investing are always a long term bet where the returns might surpass average returns from bank FD's etc. However there is always risk involved in here, which can infact be minimised if investment is done after thorough analysis of the company by checking it's last 3 years balance sheets, management quality etc.
I'll give a example, If during last couple of years any share analyst put a buy on kingfisher airlines stock then the reason for putting 'buy' can be that he is paid by the company for bringing fresh money, or his analysis/mental power is worst then a retarded human being because the company 'Kingfisher Airlines have never come into profit since inception because of following two basic reasons:
1. Management quality is poor, with no analysis/mental ability present to run businesses. 2. Airlines company is very hard to get into profit in India, due to heavy taxation.
So it comes out to be again to this oneliner: 'stock investments are longterm bets after thorough analysis of dna of company to invest into'
Always invest for longterm in stock markets, for eg a person who invested in Reliance Industries in August 2002, His investment is up by over 5 times in 2013(yesterday's price), Such returns easily surpasses the returns from conventional investment options like bank FD's or govt bonds). On the downside, since the returns on stock investments are not guaranteed, you risk losing everything on any given investment. eg. If during early 2000's anyone invested in IT companies, he would have lost all his money after the dotcom bubble burst, when many companies went bankrupt.
Investing for long-term in single stocks is a risky affair, like we say if you put all of your eggs in a single basket, sometimes that basket may fail, breaking all the eggs. Other times, that basket will hold the equivalent of a winning lottery ticket. So it is better to diversify your portfolio(Even for a long-term perspactive). This diversification would also help in avoiding volatility of stock markets.
Still in 10 year plus time category of investments, stock markets returns are on top. Even if you had invested in stocks at the highest peak in the market, your total after-inflation returns after 10 years would have been higher for stocks than either bonds or bank FD's. This is because stocks allow investors to own companies that have the ability to create enormous economic value. Stock investors have full exposure to this rise in stock value, which no other longterm investment can match.
HAPPY TRADING!
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