Invest in share market is 100% risky but comes with great returns on long term investments of more than 10 years and especially if it’s Your Money-Your Account-Your Control without actually giving it to anyone to manage your funds.
Do you want to grow your hard-earned money by investing?
Do you want your surplus money to start working for you?
Don’t know which is the right kind of investment for you?
Is it Mutual Funds, PMS, SIP, Crypto, Jewellery, Real Estate, Fixed deposits, Bonds, or Stock Markets?
I remember the first time when I started investing, I had some thoughts that pondered my mind over and over again, whether I should take 100% risk or be 100% safe or balance out with both, be a trader or an investor, do I have the requisite skill & knowledge, minimum amount of funds to start with, my risk appetite, best time and top companies to invest in. I had no clue what I am getting into and now into investments in share markets for more than 15 years. Many of my friends and family members are keen to know more about investments in share market, which is the main reason for this article.
Investment is not a new concept and it is going on for ages. Right from the olden days till date, girls are gifted with jewelry, especially in India, for many reasons such as it carries prestige and is a status symbol, a great investment channel as Gold has mostly picked up well over the past 3-4 decades, also a fallback option in need of money.
My mother gave me a few thousand to invest out of her savings, which I conveniently invested in a Fixed Deposit on her behalf and left it there. Year after year we went to check on the status and renewed some of them and got some fresh ones too.
This went on for a couple of years, till I came across Post Office schemes, which were equally lucrative. So, I diversified a few thousand in Post Office Schemes too. Both Fixed Deposits and Post Office schemes were long-term games and a game of patience. We just parked our funds there, trusting the respective banks and government machines, sometimes even for a tenure of 8-10 years.
We also fumbled upon PPF, which not only saved taxes but also guaranteed a fixed return on investment of good 8-10%pa, with a lock-in period of 15 years. We grabbed that too. I always kept finding opportunities and picked them up immediately when they knocked on our doors.
There was also a time in the early 1990s when we were introduced to LIC policies, which were invested more from heavy returns point of view on maturity or as annuities after every couple of years in their various policy schemes. It was seen more as an investment than as pure life insurance against the untoward/untimely happening of an event. We went on paying premiums for 20 +years just to realize later that there was a difference between what we wanted and what we actually got into unknowingly.
Some of my friends recommended Chit Funds, which was apparently a new concept during those days, and I was also very hesitant to hand over my funds for the great returns promised. Though I also tried doing that as well. I gained big time initially then lost a small portion of my principal too.
All this kept on adding to my experience of what’s working and what’s not.
I saw my father investing in properties, which was equally very high on sentiments to have a property in your name and see it grow. It is still considered as one of the best investments to grow your funds. It’s again a game of patience, after a span of 10-15 years or maybe even more, not only that the resale value increases multifold, but also you get a regular rental income of approximately 3-4%pa as a return on investment. It comes with its own pros and cons, which I will be discussing in my next blogs and videos.
I did invest a few thousand in different Mutual Funds, some just 100% equity, some 100% Debt, a few others were a mix of both equity and debt. I lost my funds in some of them, and in some, I gained. This came with a very high cost of maintenance to be paid to manage my funds.
I was asked a few questions and based on my requirement, and urgency of funds, I was guided to invest in a particular mutual funds basket, without any knowledge of any of those sectors or the companies involved.
Most of our investment decisions were taken abruptly without evaluating other equity long-term investment opportunities with higher returns percentages and invested just to get returns and play safe without any risks.
You must have noticed all the assets that I just discussed required long-time investments and none of them were short-term quick returns, as we had a lot of patience. A similar mindset is now required as investors to stay invested for long-term periods to gain the maximum benefits.
I then opened a Demat account with a broker. I had no clue about how stock markets work. Then I started investing consistently in stock markets. I picked up a few big-known stocks and kept investing small amounts in them, which gradually multiplied.
Started off as a trader, then tried Trading in Stock Futures Derivatives, and went on to become an investor.
As a trader, I have always been a very aggressive buyer and seller in stock markets and have seen huge ups and downs in the portfolios that I have managed over the years with a net off ending mostly in profits.
I kept reading a lot of concepts everywhere about how companies are performing, which company is coming up with which products, what is its international business status, its investors, basically in and out of each and every company’s economics. It helped me a lot in taking the right trading decisions.
I went on to trade in Stock Futures Derivatives. It multiples your return but also is extremely high on risk, as it is not only investing in Equity which is risky but also investing in multiples of principal amounts, which is very tempting but one wrong step and your principal funds are eroded like sand slipping out of your fists.
All this went on for good 2 decades of my life from the early 2000s till date, when I finally realized the importance of being an investor. Each of the above investing options required extensive learning on the job by burning my fingers and standing up strong again and again, with a positive comeback always.
A lesson learned the hard way is that Investment requires a totally different mindset of having a lot of patience, to see returns on investment coming in slowly and consistently thereby expanding your portfolio value gradually.
Finally in 2007 after marrying Akalp Gupta, a Pro Fund Manager, with experience of 20+ years in Institutional Fund Management, who managed a Portfolio of more than $2Billion while in corporate life and now has ventured on his own. Equity manager, Equity advisor, and Investment Manager, Portfolio Manager, investor, and lot of market discussions within the family, we launched StockInvest2Grow.com and I have a good experience now.
Being a Chartered Accountant myself, made it much easier to analyze companies, study them and their future growth and identify the companies which might give reasonable returns in the years to come.
Even after sustaining some of the sharpest falls ever in stock markets either due to the Lehman brothers, or due to Covid, or the Russia – Ukraine war, I am still standing strong with all the portfolios managed by us.
Though markets are subject to risks and no one can estimate the percentage of returns that one can earn by investing in markets, else we would all have been God of our own money and multiplied at our own wishes and no one in this world would ever go hungry.
This is not a money tree either, to pluck from, whenever needed. Just like a tree that takes its own time to grow and start giving fruits after years, the real benefit of investing in Equity Stock markets starts flowing in only if no branch or leaf or fruit is cut before it reaps the real benefits.
Return on investment is like a roller coaster ride, some years you may gain 40-50% return on investment, and some years there may be negative returns, while some other years, you may just see 10-15% returns. But effectively it takes almost 10-15 years to start seeing average stability returns, which is the real worth of investing. It’s not a week’s or month’s magic wand. It takes years to start giving results.
Just like we as a child learn to walk, gradually start running, fall many times, get up, and then start all over again. We also invest rigorously in ourselves by upskilling for almost 20-25 years of our life to finally start earning after completing graduation or a master’s. Investing in markets is also a long-term plan of patience before it starts yielding good returns.
If we as humans need full 20 years to start earning some income for ourselves, suiting our skillsets, knowledge, passion, and interest, then money to work for itself should also be given enough time to start yielding returns, isn’t it?
Now that you are with me and are convinced about investing, you might be eager to grow your hard-earned money by investing and for money to start working for you, isn’t it?
In my 40’s now, Is it right time to invest in share market?
The stock market investment is very high on risk and should be invested in your earning days out of your surplus funds not needed immediately, so that you have enough time to reap the benefits and recover losses if any. Money once lost in stock markets can be earned again either as a salaried employee, as a professional consultant, or as a business entrepreneur over some years of hard work.
It is not an instrument for senior citizens above 70 years, as risk appetite is very low and their monthly life maintenance is fulfilled from regular incomes, unlike in Stock Investments. It’s best for them to keep their money in safe deposits with fixed-income-yielding instruments.
Minimum amount invest in share market?
To this, I would like you to close your eyes to visualize and assume the worst scenario where you have invested a certain amount and the markets are down by say 30-40%, see if this disturbs your sleep, do you have any feelings about markets volatility, if not, then market investment is the right choice for you.
It’s important to be neutral in Stock Equity investment. It’s like you have parked your funds in stock markets for say 10 years and forgotten. You should not disturb it in order to gain the best average returns after a span of 10-15 years. Eg, Invested 50Lacs, the portfolio is down by 40% to Rs.30Lacs, If this disturbs you, then invest say 30Lacs. Now if the portfolio is down to Rs.18Lacs, and that much loss is tolerable, then RS.30Lacs is the right amount to invest.
Investment in markets should be out of surplus funds that are not required to be touched for the next 10-15 years. There is no definite amount to start with. It varies with each person’s net worth and surplus funds in hand.
Guaranteed Return from invest in share market?
Do we have a guarantee that the real estate that we buy will have guaranteed X returns in X number of years? Property prices were dead in the past decade, which just picked up 5-10% in 2021…
Do we have a Guarantee that the university our child is studying in or will be studying, will fetch him enough salary and satisfaction to make a living out of it?
Investments in any instrument except Fixed Deposits, does not involve guaranteed returns. If anyone guarantees you returns especially on investments in Stock Markets, you need to be even more careful. Its better to expect less and get more in stock market investments.
Also if you have the surplus funds, it’s always better to get money working for you, else inflation will erode your money’s value completely over years. Eg, The same vegetables that you bought 10 years back costs you double or may be even triple now. So, if your money is kept idle, you may have to keep working to fulfil your regular needs and wants.
Best time to invest in share market
At any point of time, there are always good companies available to invest. There is no right time or wrong time to invest in share market. It’s the skill and knowledge coupled with experience, to select those companies, irrespective of index levels.
Don’t know which is the right kind of investment suiting my requirement?
Between fixed income and equity, for your immediate funding, if you have any running expenses, such as home loans, or car investment, for the next 10 years, you should be investing in fixed income yielding assets such as Fixed Deposits, Bonds, where the return is very less but the risk is zero and liquidation at any time is without any fluctuations, unlike stock markets, thereby keeping your principal money intact at all times along with definite small returns to meet your emergency or immediate requirements.
Should I be on 100% Equity(risk), 100% Debt(safe), or a combination of Equity and Debt(risk-safe)?
I would always recommend diversifying your investments into different instruments and not putting all eggs in one basket. Having said this, it’s best to have a combination of some fixed deposits, some bonds, and equity investments to play safe and earn stable returns with some certainty and at the same time earn high returns with very high risk and uncertainty.
Should I be a trader or an investor?
Trader requires continuous monitoring of funds throughout the day, thereby selling or buying at the right time, to gain maximum profits, which is never predictable, and you might never be able to capture that exact right price. Net off’s at the end of the year may not be worth the efforts put in to earn those profits.
The attitude that “My queue is longer than the others and I must shift to the shorter queue” doesn’t always work. Analyse and choose a queue and stick to it. No point changing queue frequently.
I don’t have the knowledge & skill to invest.
While It’s always best to keep upskilling in every field of interest. Stock market investments require real-life investment to gain experience along with the theoretical knowledge acquired. This may take a few years of your time. Is it worth the wait or should you take the help of professionals is your decision? It’s finally all about trusting the professionals partnering with you in your best interest and helping you scale your income. There is a saying in Hindi “Jiska Kam usi ko saje aur karai to danda baje” …..
Should I invest in share market?
What if I don’t get my money back after investing or lose it completely?
It is normal to feel discomfort and have the insecurity of not getting positive returns in some cases especially if invested for shorter periods of time or due to corrections in markets. To this, I would like you to get detached from the funds invested in stock markets and forget for some years and never lay any expectations in advance from stock markets. To your surprise one day, your fund should have scaled beyond your imagination also.
Is it good to invest in share market?
Do I have the appetite to bear the risk? Am I ready to take the risk?
If you had chosen a particular field at the age of 18years and are now making a living in another field ……..
If you have taken the risk to partner with someone in your professional life without knowing how long will both of you work together…..
If you have taken the risk to marry someone without completely knowing someone……..
If you have taken the risk to start your own business, which may or may not yield returns as expected…..
Then, you are already taking risks in your daily life. The only thing in life that is constant is change and change comes with uncertainty and uncertainty comes with risks.
We are all sailing in this boat and have taken several risks in our lives but when it comes to investing, all these fearful thoughts start disturbing us.
You might have heard the Hindi phrase “Waqt se pehle aur kismat se jyada kabhi nahi milta”
If you have to get the returns, you will get it, come what may………
I am a strong believer in the quote,
And, when you want something, all the universe conspires in helping you to achieve it.”. ― Paulo Coelho, The Alchemist
How to choose a professional to help me in my investment journey?
An investment partner is similar to your family doctor or family CA, who knows everything about your requirements and will help define your portfolio, in your best interest, thereby taking care of your maximum returns possible. It’s all about trust in him/her.
You have 3 options at any point in time in investing,
either
Learn to invest in share market and manage your funds yourself, or
Outsource to portfolio management service companies, or
have complete control of your own Demat account, and your money and partner with investment professionals to guide you. – “ Your Investment Partner”
How to invest in share market India?
You can apply to open a Trading Demat account among the vast choice of broking firms available these days with your KYC documents, and you are good to start investing in share market in India online.
3 Easy Steps to invest in share market
Open a Trading Demat Account with any Broking Firm.
Transfer funds to your Trading Demat Account to start investing.
Invest in Share Market.
Conclusion
Investment in share market is risky but yields great returns on long term basis. It needs time to grow. There is no right time to invest, you will get good companies to invest any time irrespective of index levels.
You might have heard about Your Learning Partner, Your Accounting Partner, Your Life Partner… Lets explore the world of being “Your Investment Partner” together.
It’s your turn now to comment below and let me know your thoughts on investment in share market.
When you are ready to invest, do connect with me at [email protected]
Cheers,
Tanuja Gupta, Co-Founder StockInvest2Grow.com
Investments very beautifully explained step by step and with logic at each stage. The author’s personal journey in this field adds to the credibility.
Thankyou Ramanan. I am glad you found the article useful and logical.
Simple and detailed on journey of investment. Completely agree that stock market investment experience and learning is gained only when we actually practice by investing our own money ourselves. Failing once in this is worth so much of the learning it will give and put us on the learning path to do it right the next time
Thanks Tanuja for sharing the article. Good job done 👍
Thankyou Teji. Yes, so true. Practical implementation consistently with sound knowledge of the Stock Market terminologies and respective companies, adds to the experience.