If you have invested 10K in Wipro company 20 years ago, now the value of it would be around 1200 Crores. OMG how did I miss this chance. “Dad, why you did not think about this, why you did not invest in share market” I asked. “share market is full of gambling” he replied.
This post is meant for the people who are new and ready for investing.
forget about the 1990s, now in 2021 did you invest in stocks? Yes, people still exist. Still, many people think that the share market is only for the big players in the market and not for you and me. But, the fact “if you have invested 10K in ‘xxxx’ company 20 years ago, now the value of it would be around 1200 Crores” is never false right. At least on average, the stocks prices might have gone up to half of it or even equal to the value current inflation right.
So summing up, to beat the inflation or at least to safeguard it you need to invest. so I built my way of trapping the money and boom the magic of getting rich with utmost safe is revealed. of course, there are many ways of doing it. This post covers the stock market way of investing.
Technique behind the trapping money
of many ways of building my fortune, I believed one would definitely work and makes the fortune. That is through mutual funds.
understanding mutual funds
when talking about investing, it is very similar to swimming, you need to dive into the water for learning to swim, you cannot learn it by watching the ‘how to swim’ video on YouTube. You need to dive in the real water, wait you cannot dive directly into the Big waters like the ocean either, so risk comes into the picture. you have swimming pools for that just like that do not directly dive into the direct stocks and lose yourself. there are swimming pools here as well so you can choose how deep you go considering the risk. These swimming pools in the share market are called mutual funds.
What Mutual Funds do I choose?
In terms of shares and share marketing, there is half a word already there marketing. So do not fall for the marketers saying you to invest in this and that, instead try to get the insights of it. Some of the insights like how old is it or what is the value of it, who are actually holding funds in this mutual fund’s etcetera.
Apart from all these, the main key point to be checked is on what the money you give is invested on. Yes, though you do not need any deep knowledge of all individual companies doing and their work, you should have at least some idea of what the companies are and what kind of work they do. As always, here is an example to understand it better.
Consider IT industry in India, some of the IT giants in India are Infosys, TCS, Wipro, Tech Mahindra, and the company you and I are working in. On average three out of five people are engineers, Imagine the number of engineering colleges, Imagine the number of students coming out of these colleges as graduates looking for jobs in these tech giants. what about IIT’s and NIT’s. Huge right! Yes now look at the scope of this industry, it is not even steep and it is almost vertical. Do you think the IT Industry is going to end in the near future, again the future I am referring to is not 10 -20 years consider the next 100 years even, still there is a scope right? The EV’s are already in the market so what after EVs, so I think the IT industry has incredible scope. so I have decided to invest in IT. Okay wait, IT is an industry and the money I am going to invest on is a single company and there are fair chances that a company can lay off and there is no guarantee.
Obsoletely yes, history has the shreds of evidence for it. Sathyam computers is a great example. So how do I overcome this? This is where mutual funds come into the picture.
Mutual Funds Deep Dive
So now you have mutual funds which mean you invest in different stocks rather than investing in one stock. This gives more advantages with fewer risks. So with the mutual fund, you invest in more than 5 companies at a time so even if one goes wrong the other would be there saving your money. In turn these mutual funds has different kinds, different sectors of stocks, we just spoke on IT, so what if you need some stocks on it and some on finance, yes go search for it, and choose which one you believe in, This is how you choose mutual fund. If you are still confused for choosing the sectors even, there always a room for these kinds of people. There are some mutual funds where there are different kinds of sectors involved.
For example: Out of 10 stocks one stock is from IT, the other from finance, the other from agro, the other from infrastructures likewise. you can invest in this kind of stock for a safe play. These kinds of mutual funds are very strong and do not fall easily unless mankind is next to extinct, at this stage why would you even need money. And if you are worried about even investing in this then please living on this planet earth. So it is up to you what you invest in, If someone says some ‘xxxx’ fund is the best and everyone invests in it. do not trust them directly do this kind of analysis at least before investing. Do not dump your money somewhere you are not even aware of and start investing.
click here to see what mutual funds are there
In the upcoming post, I would post my investment strategy and on what mutual funds did I invest in and why I choose them.
Thank you 😉
Dude Ideas 