Equity Investing at a glance (Part 2)


In Previous Blog I have explained one side of Equity Investing, here’s another side of Equity Investing.

Here’s is the returns of well-known companies (or Products) over a period of last 10 years (01st Jan 2008 to 31st Dec 2017), it includes effect of year 2008 crash.

Company Name
Absolute Returns
CAGR over 10 Years
1. Reliance Industries (Petrochemical)
27.88%
2.49%
2. State Bank of India (Banking)
30.54%
2.70%
3. Videocon (Consumer Electronics)
-97.62%
-31.20%
4. Bharti Airtel (Telecom)
6.46%
0.63%
5. ICICI Bank (Banking)
40.13%
3.43%
6. Reliance Communication (Telecom)
-95.15%
-26.11%
7. Larsen & Toubro (Construction)
35.58%
3.09%

Fixed Deposit
115.89%
8.00%
                                                            Source: Vaibhav Khandelwal Research, BSE Website

* Dividends paid by companies are not included in these returns.
* CAGR stands for Compounded Annual Growth Rate.

After seeing both sides of Equity Investing, its bit confusing & risky to invest in Equity Market.

So what to do (Here’s simple guide):
  • If either you or someone in your network have understanding of Direct Equity Investing, then only go for it, otherwise invest in Mutual Funds (SIP). 
  • Invest after consulting with Professionals, Mutual Funds or Portfolio Manager. 
  • Follow Businesses, not Stock Prices. 
  • Never invest whole capital in one business, go for diversification but only to some extent.
Return of Index over a period of last 10 years (01st Jan 2008 to 31st Dec 2017), it includes effect of year 2008 crash.

Index
Absolute Returns
CAGR over 10 Years
1. BSE Sensex
67.88%
5.32%
2. NSE Nifty
70.00%
5.45%
In upcoming blogs I will discuss about why some companies have outperformed and some have underperformed in past and will also discuss about some businesses, till then “Re-Think about your Financial Goal & Financial Plan”.
Post your queries & suggestions.

Thanking You.

“If you buy things you do not need, soon you will have to sell things you need." – Warren Buffet

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