Can Stock Market Make You Rich?
Want To Become Rich? Try Stock Market
Many people dream of becoming rich overnight without lifting a finger. Whether these day dreamers will get rich or not, I can't say, but in most cases the chances are pretty slim. For to get rich and to stay rich you have to work, and sometime work very hard. But if only hard work makes you rich why are not majority of people getting rich, assuming they work hard? Fair question. Plot kinda thickens by the time you reach this point. The answer is - these people don't invest wisely. Yes, good investment is a better half of hard work (Income). To get the best results, both income and investment have to work in tandem.
So What Kind Of Investment Makes You Rich?
Every form of investment is designed to make the investor rich, but the degree of returns vary from instrument to instrument. So the key to success is to identify the medium which will give the best results. First, let's just glance through the investment options you have at your disposal - Mutual Funds, Fixed Deposits or Equity investment (Stock market).
Mutual funds and fixed deposits are considered relatively safe investments as compared to stock investment, however in terms of returns, they lag way behind. So in order to secure highest returns the only alternative you have is stock market. A timely and well-informed investment in stock market can pave the way for considerable wealth. But like all good things, stock investment comes with its own set of challenges.
Isn't Stock Market Extremely Risky?
Stock market investment comes with a statutory warning that it is subject to market risk, so yes, it is extremely risky. But there are ways to minimise the risk to a great extent. But don't get bogged down by the risk factor of market, there is a great growth potential to be chanced upon. For example, if you don't want to go for high risk stocks you can invest in blue-chip stocks which are considered moderately safe.
But investing your entire capital in blue-chip stocks might not be a good idea as blue-chip stocks, though safe, move on a very sluggish pace. As most of the big corporations' stock have already reached their value, it becomes difficult to get considerable upside on these stocks. So, the true growth potential lies in mid and small-cap stocks. But going by the general rule of market - growth comes at the cost of high risk.
Ask The Expert
Identifying undervalued stocks is a work of patience and utter diligence. You have to examine all the details of the company i.e. management of the company, its business sustainability, Y-O-Y growth, balance sheet, debts, etc. After analysing all the details you get to see the potential of the company. However, this task takes a lot of time and only experienced people can comprehend the jargon-ridden literature.
For the retail investors, best alternative is to avail the services of either stock advisory firms or portfolio management service. Stock advisory firms specialise is providing multibagger stock tips which give good upside in a stipulated time frame. The experienced stock analysts of these firms analyse every last detail of the company and only recommend stocks that promise good returns. To get good results, it's always better to pay for a good advice. And yes, if played right, there can't be a better tool of wealth creation than stock market. Happy investing!
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