According to me Investing is putting your money in real estate, gold, silver, bonds, stock market or might be in your own business by assuming that it will grow your money in future. In this post we will discuss pros and cons of investing in stock market.
Companies which require funds uses stock market and sells share for cash. By doing this they provide a platform for public to invest in their favourite companies. Most people in India don’t even think about stock market. The two main reasons are one is lack of appropriate knowledge and latter one is fear of bubble bursts.
I will write about the solution to above two problems in my upcoming posts. Now if we come to our main topic “WHY YOU SHOULD INVEST YOUR MONEY?” the answer is very simple to create wealth.
Developing country like India has lot of growth space compared with America which already reached a saturated stage. India population is mainly middle and lower middle class . The living quality is improving along with the time. To meet the requirements of the people companies of all the sectors such as consumption, auto, pharma etc has to increase their production to keep up with the demand. As a result of more consumption there will be growth in the companies which obviously bring profit. When the company runs in profit share value of that company increases and it pays regular dividend to the shareholders. Let us say you have invested in a company which has an annual growth of minimum 15%. It will double your money with in a few years as the power of compounding handles the rest of the game.
READ ABOUT POWER OF COMPOUNDING HERE – https://www.mintpaisa.com/the-power-of-compounding
Above screenshot of Nifty 50 shows the constant development of the companies. Nifty itself grown to 11 times in a span of 20 years. There are many companies which have beaten nifty in terms of growth. Many think that investing is a slow process of generating wealth but believe me over a long span of time you will definitely observe the change and way how your money works for you instead you working for money. One should learn Fundamental Analysis for identification of wealth creating companies.We will learn about it in my upcoming posts.