In quest for quick gains

Posted by Anand Kumar on 10 July 2010
Last update on 7/10/2010 12:00:00 AM. Total replies 0

trading vs investments

Every stock market entrants usually enters the markets thinking that he can make millions in no time. They try to ignore the fact that they are trying to gamble.

After few years they go out of the market blaming the markets because they have lost heavily while gambling.

We would like to highlight the differance between investing and trading.

At the end of the day in a trading scenario one has to loose and one has to earn. In the process your broker makes some money. Now a days even some big PMS are trying this method to increase the profits for there broking arms.

People think they make lots of 10% gains in couple of days by trading. They boast about gaining heavily each day.

Even if you are making 2% gain for atleast 50 days in a year by trading you will end up making Rs. 1.5 crores with a capital of Rs. 1 lacs in 5 years and Rs. 200 crores in 10 years and Rs. 3000 Crores in 15 years.

Show me 1 guy in this earth who has done this.

Against this take a scenario you invest Rs. 1 lac today and buy solid counters which can give 30% a year. Keep booking profits when scrips handsomely beat your expected returns. Shift counter when it becomes overvalued hold cash when you do not find attractive buys.

If you can achieve 30% for 15 years you will be able to grow your Rs. 1 lac to Rs. 50 lacs in 15 years.

Is 50 lacs less? A FD does not even grow to Rs. 4 lacs in this period. More over you get dividends.

Be prudent be realistic. Know why you should buy that stock. Understand you need to book profits. Learn to be patient with your cash in hand or your stock holdings.

Be a winner.

Ananda Kumar
SMall caps india

This page is visited 344 times so far.