If you had started investing in equity shares/mutual funds in the year 1995 and stayed invested until 2015 (20 years) , your money would have grown NINE times !
This kind of return on investment is a gift for common investors without deep pockets.
As per a study done by Motilal Oswal , as many as 47 stocks jumped to 100 times their values in the last two decades .
These stocks are called 100 x stocks. This shows the wealth-building potential of equity investments in the long run.
If you had owned even two of these 100* stocks , you’d be sitting on a pile of wealth right now.
>> On an average, it takes the Sensex 30 years to rise to 100 times the value
>> On an average, it takes a capable stock 12 years to multiply 100 times its value.
This is lower than the time it takes the sensex to jump 100-fold. This means, stocks rise faster than the Sensex
To rise 100 times its value in 12 years, a stock would need to give a whopping 47% return /year.
- Agreed, it is easier said than done to pick such 100 * stocks, it is not impossible though. Armed with the right knowledge and framework to stock -picking one can definitely stumble into such winners in one’s investing period.
- One thing that makes picking such stocks easy is that it does not need the right timing. If the stock has the capacity to jump 100-fold, then it will do so no matter when you buy – sooner or later. So, it is not that only the early bird gets the worm.
The chances of succeeding are higher the sooner you pick these stocks. This period is called the opportunity period. If you buy the stock beyond this period, you may then have to wait longer for the stock to rise 100-fold. Shree Cement and Motherson Sumi had the highest opportunity period of eleven years each. This means, both these stocks could have been bought anytime from 1994 to 2004, and the stock prices would have risen 100 times even thereafter . Infosys and Lupin had a five & nine years buying windows respectively.
- “To make money in stocks you must have the vision to see them, the courage to buy them and the patience to hold them. Patience is the rarest of the three“- Thomas Phelps
Don’t stop SIPs / DIYSIPs in stocks when market corrects/falls. This is the time to accumulate more of a good stock.
Remember, our markets are not immune to global jitters and any dip is an opportunity to pick more .
- You don’t make money by standing on the sidelines, be an investor.
If you had spent INR 55000 in 2001 to buy a Royal Enfield motorcycle, you would now have an old rusty bike.
But, if you had invested INR 55000 in Eicher’s stocks in 2001(@17.5/Share), your investment will be worth INR 4.75 Crore now. This is a yearly return of 5750% per year on investment !!
Its stock price multiplied 2,902 times in 20 years. Wipro, meanwhile, jumped to 875 times its original 1994 value over the same 20-year period.
Stocks like Lupin took less than 20 years to cross the 100 multiple. It jumped 1170 times in less than 20 years – between 2002 and 2014.
We have used above three stocks to drive home the point that investing in stocks can really make you very very RICH!
Agreed that you may lose money in market, however, the upside potential is also incredibly profitable.
So, start trading gradually and as Arindam Chaudhary used to say ” Think beyond IIMs” , we ‘d say “Think beyond Property and FD”. 🙂
Recommended read: http://www.oracleinvestor.com/stocks/why-you-should-invest-in-shares/