Why this the best time for investment?
- When you should start your investment journey?
- Why people do not invest during economic slow-down?
- Why you should invest during the slow-down?
- The historical return of the market
- Why this the best time for Investment?
Introduction: why this is the best time for investment?
Firstly, we should understand the basic concept of investment, what exactly it is? Investment is not about putting your money in a bank fixed deposit for 10-15 years neither it about putting your money in an asset, where there is no certainty of return. In India, most of the people think that buying a big house is a kind of investment or buying a luxuries thing. Think about this, is this an investment? If your answer is yes! Then what is your rate of return? Calculate what will be your house or car value after 10 years?
Find the people who had invested their capital in a big house (Until you are not buying these houses for commercial uses) and car and had become rich. Most probably you will not be able to find such people near around you. Then what is the real investment? Further, we will also discuss it in this article.
When you should start your investment journey?
This the most important question, “when you should start your investment journey”? There is no hard and fast rule for investment journey. If you will ask your friend and family members about your investment plan, this is not the right time for you. The most common answer what you will get is that; currently, you should focus on your study, career and other this and that thing. Very few people will guide you in a better way. The reason is simple, India is not an investment-oriented country but saving oriented. India has a tendency of saving money not to multiply. So, there are very few houses and families in India who teach their children to invest but everyone asks them to save.
Secondly, people also think that whole life is left for saving and investment. They do not know time is passing day by day and that day might not become when they will start their investment.
Look around you, your child, father, mother, friends and others. Who should invest at this point of time? Think about it. If you will ask me, I’ll say everyone should invest even 1-year-old baby.
So, according to my point of view, there is no good time or bad time and a perfect age for investment. You can start it from today, does not matter what amount you are investing. What matters most is that at least your investment.
Why people do not invest during economic slow-down?
Here, I have mentioned some reasons because of that people was not willing to invest in that time.
Highly educated people have a problem that is called “Analysis Paralysis“. Means people who have a high educational qualification, they analyse things too much. People always find a perfect reason for not investing. Because of the reasons mentioned below, highly qualified people will never suggest you invest. But when you will analyse the market since 2010-2019 you can easily find the difference.
2010 – Sovereign debt crisis.
2011 – Eurozone crisis.
2012 – U.S. fiscal cliff.
2013 – Federal Reserve to “taper” stimulus.
2014 – Oil prices plunge.
2015 – Chinese stock market sell-off.
2016 – Brexit, U.S. presidential election.
2017 – Stocks at record highs, Bitcoin mania.
2018 – Trade Wars, rising interest rates.
2019 – India GDP at 5 %
Every year there is a negative factor that demotivates you to not to invest. Then why market hits a new high every year? The answer is simple, there will be always a negative factor in the economy but the market never waits for the right time. It will continue with its pace.
Why you should invest during the slow-down?
There is a famous quote of Warren Buffet “Be fearful when others are greedy and be greedy when others are fearful”. This quote says that you should be more bullish on market or greedy when there is slow-down in the market or economy. Because slow-down is not permanent but growth is.
There is a reason behind this when the market starts correcting itself after slow-down then it gives a much more return than the normal days. How was the world economic conditions during 2008-2009 slow-down? Not good at all but what happened after that market made a new all-time high with a better return. Some will always find why not to invest but no one can stop the Market in the long run.
The historical return of the market:
Why this the best time for Investment?
Everybody knows that the market will not stop here neither this is the endpoint of the economy. Yes! I agree this is a crucial time for the Indian economy. GDP is less than 5% but you should also check-out the GDP growth rate in the year 2012.
The market came out from the recession of 2012 and now the market is trading at all-time high, NIFTY and Sensex both. That is Warren Buffett says “Be greedy while others are fearful and Be fearful when others are greedy”. But for this scenario, you can wait till the first budget 2021.
At last, always remember –
“One can create Money by investing in Bull Market but one can create Fortune by investing in Bear Market”.