When should
be invest in shares ?
The above
written question is in the mind of various investors. Unfortunately, many of us
are not able to find the difference between saver and investor. India is
country of great savers but poor investors. Most of us enter in share market
for short term gain but become investor forcibly when the rate of our shares
drops below from the purchasing price.
Investing
require three main things. First is investment period, second is well
understanding of the asset in which you are going to invest and third is know
about the risk. In this article I will pick the 2 example of stocks which had
created extra ordinary wealth.
In 1993
Infosys came with IPO of Rs 95 per share. If you had bought 100 shares of Infosys
for Rs 9,500 at 1993, the value of that Rs 9,500 has become today Rs 5.05
crore.
|
Year
|
Corporate Action
|
Shares
|
|
1994
|
1:1 Bonus
|
200
|
|
1997
|
1:1 Bonus
|
400
|
|
1999
|
1:1 Bonus
|
800
|
|
Nov-99
|
Split to Rs 5
Face Value
|
1600
|
|
2004
|
3:1 Bonus
|
6400
|
|
2006
|
1:1 Bonus
|
12800
|
|
2014
|
1:1 Bonus
|
25600
|
The value
of 25,600 share of Infosys today is 5.05 crore without including dividend. Keep
in mind dividend is tax free amount which company gives to its shareholder.
The other
wealth creator is Wipro. The IPO had come in 1980 Rs 100 per share. If you had
bought 10 share of Wipro at that time worth Rs 1000 then, the value of that Rs
1000 has become today worth Rs 56.05 crore.
|
Year
|
Corporate Action
|
Shares
|
|
1981
|
1:1 Bonus
|
20
|
|
1985
|
1:1 Bonus
|
40
|
|
1986
|
Split to Rs10
Face Value
|
400
|
|
1987
|
1:1 Bonus
|
800
|
|
1989
|
1:1 Bonus
|
1600
|
|
1992
|
1:1 Bonus
|
3200
|
|
1995
|
1:1 Bonus
|
6400
|
|
1997
|
2:1 Bonus
|
19200
|
|
1999
|
Split to Rs 2
Face Value
|
96000
|
|
2004
|
2:1 Bonus
|
288000
|
|
2005
|
1:1 Bonus
|
576000
|
|
2010
|
2:3 Bonus
|
960000
|
The worth
of Rs 1000 which you had invested in 1980 is Rs 56.05 crore today without
including tax free dividend.
The above
mentioned two example indicate the one thing very strongly that you should
invest in shares with the view of long term goal like retirement kitty,
children’s education and marriage etc. If you have not enough time to study of
stocks then you should invest in large cap equity mutual fund.
Please do
not try to time the market. For long term investor market is always good. For
example, since last one year market has given decent 60% return but many
investor has missed this market rally because they want time the market.
If you want more information
regarding investment or you need investment services, feel free to ask us. We
also conduct the seminar on investment and financial planning. If you are
interested for seminar in your city just drop the mail.
Warm regards,
Arvind Trivedi
Certified
Financial Planner
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