The best way to earn money in the stock market is through the long term investments. Why?
Here are the top 10 Successful Stock Market Investors:
- Rakesh Jhunjhunwala
- Ramesh Damani
- Raamdeo Agrawal
- Vijay Kedia
- Nemish Shah
- Dolly Khanna
- Ashish Kacholia
- Chandrakant Sampat
Why are they successful? Because they are long term investors! You can Google them to learn more about them.
As per the latest corporate shareholdings filed, Rakesh Jhunjhunwala publicly holds 30 stocks with a net worth of over Rs. 10,427.2 Cr.
As per the latest corporate shareholdings filed, Radhakishan Damani publicly holds 9 stocks with a net worth of over Rs. 78,023.6 Cr.
I am not going to list all the assets or portfolio of the above investors, but I hope you get an idea.
Now coming to your question, you could easily make 1 cr from an investment of 10 lakh in 10–15 years.
If you have invested 10 lakh in any of these companies in 2009, then let’s try to calculate the profits:
Now investing 10 lakh in a single company can be dangerous, but if you could have just invested 2–3 lakh in any of these companies then also you could have generated 1 cr.
There are two ways of making a profit through investment, and these methods are used by various leading investors globally for making more money. Let us understand about them in short:
1. Trading: A lot of people think that both of them are the same, but they are very different. Trading always aims at making a considerable profit within a short period irrespective of rising or fall in the market. They work in a different pattern and know how to earn in both rising and falling markets.
When the market is rising, they buy more shares and sell them at a higher price in a shorter time frame. On the other hand, when the market is falling, they make profits by selling at a higher price and buying the stocks when the price is low. Thus, it involved trading in a short span that can be one day or just a couple of days.
It can be really risky at times because of the quick fluctuation of the stock prices, so you should indulge in trading only when you have the experience; being a beginner, you might end up with a massive loss.
2. Value Investing: As per Warren Buffet, you should always invest in the long term else do not think of investing in stocks. You should invest in companies on which you can rely and hold your shares for years. The benefit of long term investing is that you get the advantage of dividends, rise in stock price because of the increasing profit of the company over the years, and stock splits.
Another advantage is that you ride out of the fluctuations that happen in the stocks with the belief that eventually, it would recover. Thus, if you hold stocks for a longer time, its outcome is exponential growth with immense wealth.
Now, you have to decide which way you want to go as trading can help you make profits, but value investing would help create wealth.
Right now, there are many stocks which can be bought for Long-term investments.
- Bajaj Finance
- Avanti Feeds
- Delta Corp
- Sterlite Technologies
- Credit Acces Gramin
- Edelweiss Financial Services
Disclaimer: All stock recommendations and comments are the opinions of the writer. All investors are advised to conduct their own independent research into individual stocks before making a decision.