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| Equities are the most lucrative investment asset class that outperforms every other asset class in the long term. Logic is very simple – If you want maximum return on your investment, you ought to be an entrepreneur and be successful – forming a high calibre team, orchestrating a successful business model, investing in infrastructure and innovating to create valuable business. Being an entrepreneur requires passion, confidence and considerable investment of time in building the business. There are plenty of examples in our country of people who have done that – Dhirubhai Ambani (Reliance), NR Narayanamurthy (Infosys), Ratan Tata (Tata Group), GD Birla (Birla group). The list goes on and on. |
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| If you can do that – you are on your way to building an enormous wealth for yourself, your family and society. But if you do not want to take that risk, there are a lot of blue chip companies with excellent proven business track records that have generated enormous amount of wealth in reasonable period of time. So you can instead invest in the companies with promising businesses by buying their shares and becoming their shareholders (owners). It’s the next best thing to being an entrepreneur – owning companies with promising potential. That’s what stock market investing is all about – buying good promising companies at right price and build wealth as these companies grow. |
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| If one were to rely just on the salary income to build wealth, the odds of amassing wealth are not in one’s favour. In the times of high inflation, those just relying on fixed deposits or fixed income instruments are just eroding the purchasing power of their money. If the fixed deposits give you a 7% and inflation is 9%, you are actually having negative real returns. So in the disguise of keeping your money safe in fixed income instruments, the value of your money is actually getting eroded. |
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| Equities in the long term will give you the best returns on your investment, provided you buy good companies at good prices. So you should either spend time yourself in identifying such opportunities or you rely on a good advisor. As discussed, investing in equities is the next best thing to being an entrepreneur. |
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| For more information, please contact us. |
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