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Wednesday, 9 September 2015

How much money you can make in Indian stock market?

There are 2 possibilities when it comes to investment strategies.

  1. Earn fixed returns (Fixed deposits, Bonds)
  2. Earn dynamic returns (stocks) 

If you do not want to take any risk, put your money in fixed deposits or Bonds. They will get you around 10% annual returns.
Fixed deposits and bonds are considered as the safest investment options. You put money x amount of money and get back (x+ 10% of x) amount at the end of one year.
For example - You invest 1 crore today in bonds or fixed deposits and get back 1 cr and 10 lacs at the end of 1 year for sure. No risk..No matter what happens!

If you are happy to take risk, you can put your money in stocks. Stocks can give you maximum returns if you are lucky. But if you are trapped in market turmoil, you could incur huge losses as well.
So consider this option only when you are take on the stock market by horns. You can easily earn 20%-50% annual returns by investing the amount in quality stocks with strong fundamentals.
I usually recommend stocks in sensex to people as sensex companies are well established and market leaders in the industry they work in with solid business models.

Overall I will say that you can earn unlimited returns in stocks but the key thing is that you never know how the stock is going to behave in future. You need to balance the trade off between risk and profits.


What do you think on this topic? Please express your opinion or ask any question through comment below. You can write to me at reply2sagar@gmail.com

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