Tuesday, May 24, 2022

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    What’s your basis of Investment?

    “We don’t get paid for activity, just for being right. As to how long we’ll wait, we’ll wait indefinitely.”

    – Warren Buffett

    Power of compounding, Investment in Mutual Funds, Investment in PPF schemes is some of the ways to make money, but what about its investment? A rational investor will always invest her/his money in a place where he gets regular income to fulfill his current need and at maturity get the principal amount to fulfill long-term needs. A business can be divided into small scale business, large scale business, labor-intensive having much human capital employed, and capital intensive having huge capital investment into machinery and infrastructure. 

    When businesses grow with a competitive edge then they get themselves listed on stock exchanges and the stock market rates are the true indicators of the business. According to the Motilal Oswal group, a business should opt for investment after tremendous research and study of hidden fundamentals, potential, and position of the company. Yearly CAGR and Financial statements depict a clear picture of the debt and liquidity of the company. The buy and hold approach also proves to be bespoke in the wheel. Return on net worth which means ROI, how much ROI will you get is another factor to decide investment in a business. Various ratios and percentages should be compared and evaluated before investment. A big portfolio should be made then filtering and sorting will be easy as at last only a few stocks will be left for long-term investment.

    I think prior investment self-financial planning and goal determination should be the priority.  Business channels like CNBC TV18, ZEE business, etc., seminars are great sources of information for investment.

    ALSO READ:   Covid-19: Boon or Bane?

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