Many people are asking is it safe to invest in stock market. One says, my father lost money in stock market. How can I sure I wont lose my money too ?
Most likely the father lost money in stock market because he was trading. Trading means buying and selling stocks constantly by trying to "time" the market. That should be left to an expert. It is not the right way of investing.
Right way of investing is long term investing. It's between ten or twenty years. But will my stock grow at 20% every year ?
No, it won't. For example, one year, your investments will fall by 20%. The following year, it will rise by 30%. The next year, it falls again by 10%. And so on. It will be a roller coaster ride. But, if you put tiny amounts of money every month over a ten ot twenty year period, the average growth will most likely be 20% per year IF-and that a big IF- you follow the simple money-cost-averaging.
Is that realistic 20% growth per year ? Stock Market Analyst says, they did not pull this data from thin air. They based this projected growth from the history of the market 20 years ago. They found out - If the person invested small amount of money consistently in top notch companies every month, the average growth yearly was 20%.
So, money-cost-averaging is investing small amount of money consistently each month over ten or twenty years. Only in great companies. And that's the secret of the wealthy.
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