Returns and Results of Stock Market in Previous Years
The Stock market has given a better result and return over the last many years. The returns offered by the stock market are better than the general interest rates in the market.
The market is seen to be cyclic. The bullish market is followed by bearish market and again bullish market. It is seen that the bullish market is followed by a bearish market for 20 percent of time.
The length of the period can differ but on an average the bull market ends for about 4 years and bearish market ends for about 1 year.
Thus if the investor invests for a short term and invest before the bearish market the investor ends up in losing money. However if the investor stays invested the investment will grow and he will end up in getting good returns. Thus the way to become a millionaire over the time is start investing at the beginning of the life and continues investment with regular intervals.
The investment will grow over the years and the person is likely to become a millionaire at the time of his retirement. The results are seen to be slow but they will give a good positive output after many years of investment.
The market will ultimately grow and will give positive returns as the years will pass. If a regular investment like 5000 Rs per month is invested the amount will add up and the total amount after many years will be a huge sum. This is based on the concept of time value of money.
The real strategy is to invest in a diversified portfolio.
One should not take the risk to invest in only one stock. In this case the risks are higher. Instead the investor should invest in different stocks of different sectors. The idea is one should not put all eggs in one basket. One should keep few eggs in different baskets. One can take the advice of the financial institutions to provide the equity tips to select the stocks which will turn profitable in future.