About the Stock :
Stock market is a Casino, only the very few lucky ones make money, says an investor when he was asked why he doesn’t invest in equity. Another says stock markets are only for gamblers, prices go up and down every day how can I buy something whose value changes every minute? How will this create wealth for me? Another says it is only the informed few who know where to make the money and when, as in only those who have access to insider information can buy and sell and make good money.
The reality is however far away from all the above mentioned arguments of not investing in Equity. It is not big amounts saved which will create wealth for the investor. Small amounts invested regularly and carefully in good companies can result in a large amount of wealth being created.
Let’s see a few examples of wealth creation by having invested small amounts and holding on to Investments over long periods of time.
If an investor, would have invested Rs 1 lakh in the TCS (IPO) at a price of Rs 850, his valuations would be approx. Rs 13Lakhs after two bonus issues were declared by the company one in July 2006 and other in June 2009. This is in addition to the tax free dividends received yearly.