Let us first clear the myth that everyone has whenever they hear the word “share market”.
Share Market is common man’s last alternative for investment. (Yes you caught us on that, last alternative is Cryptocurrency!)
If you considered “Fixed Deposit” safe and risk free then you may be wrong. According to Financial Resolution and Depository Bill which was recently passed in the parliament, if a bank becomes insolvent your deposits are secured up to Rs. 1 lakh only! Yes you read it right, your deposits above 1 lakh may never be returned to you if a bank goes bankrupt.
Let us compare returns of some investment alternatives over the last 15 years:
Average Annual Return of Fixed Deposits: 8-12%
Average Annual Return of Gold – 9.75%
Average Annual Return of BSE Sensex – 21.73%!
Mutual Funds Sahi Hai! – The 10 – year average annual return of top three fund house is 16.05%. A good alternative for direct investment in stock market.
Now let us take few examples from everyday life to prove why stock market is a good investment option:
- Maggie – Nestle: You must have had a bite of Maggie in your life at least once, price of which has increased only Re.1 in the last 5-Years i.e. from Rs.5 to Rs. 6. Whereas, its owner Nestle has given a return of 81% in the last 5 years!
- Colgate-Colgate-Palmolive: Colgate has been a part of everyone’s life and a small pack of it costs just Rs. 10. However when it comes to its owner i.e. Colgate-Palmolive, its stock price has increased exponentially over the last few years. Company has given a return of more than 50% in the last 5 years.
- Good Day/Bourbon/Little Hearts etc. – Britannia: There is not even a single household in India which has been left untouched by Britannia. It has been complimenting our bed tea for decades. Britannia offers biscuits at a price as low as Rs. 3 but has given a massive return of 794% to its shareholders in the last 5 years.
Now whenever you buy any of the above products, think about the money you could have made by investing in the shares of these companies!
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