Simple Investing Strategy for Beginners
Without analyzing stocks, without analyzing financial statements and without even studying accounting, you can make good returns in the stock market. How can you make good returns in the stock market by understanding just one basic thing? Even if you understand this basic thing and follow a simple investing strategy. If you do then you don't even need to look at investing, let's start.
First of all, let us look at some facts, firstly, more than 90% of the people suffer losses in the stock market, secondly, more than 85% of the mutual funds are not able to make returns even equal to the index in the long term, and the third fact related to this is that the maximum Mutual funds perform in comparison to the stock market index in the long term, but friends, this is not a new thing. Great investor Benjamin Graham had said in 1950 that the biggest enemy of the investor is no one but himself.
Mutual funds were started to protect investors from their wrong behavior.
He said that in investing, our behavior is more important than our mind. People become smart by reading things and they forget to make their behavior smart due to which despite having intelligence, they actually suffer losses in the stock market. Friends, mutual funds were started to protect investors from their wrong behavior, the basic theory of which was that there will be an expert fund manager who will find good stocks for us and will not make mistakes like common people and as we have See friends, the actual performance history of mutual funds tells a different story and the mutual fund which was started to give good returns to the people.
Big mutual funds have very smart fund managers.
85% of those mutual funds are not able to generate returns equal to the index in the long term because it is worth thinking that very big mutual funds have very smart fund managers who have done HD in Finance from good universities. They are very smart in numbers but still all these fund managers are under performing in the stock market and this is not only about India.
Be it that country or UK, the performance of mutual funds there is also similar. Now friends, let us bring a twist in the story and let's move towards history. Friends, millions of years ago, humanity used to live in the forests and there we survived by hunting. Then about 12000 years ago, agriculture started and we started our own production. Then in the 18th century, the Industrial Revolution came due to which human productivity increased millions of times. And then in 1990, commercial Internet came which changed the whole world. And after all, friends, what is the meaning of all these things? The meaning of all these things is that humanity is on a one-way highway of progress.
Human productivity will continue to increase and the economy will also continue to progress along with it.
And we have always been increasing our output by adopting new processes and technologies. In 1960, India's GDP was only 37 billion dollars and the per capita income was about 83 dollars. Now in the year 2024, India's GDP is approximately 3.5 trillion dollars and the per capita income is around 2400 dollars, that is, India has increased its product availability by almost 100 times in the last 64 years alone and there is no doubt that in the coming This progress will continue even in 15 to 20 years. India's GDP, which is around 3.5 trillion dollars today, will definitely reach 10 trillion dollars in the next 15 to 20 years. And friends, this is the simple basic thing that we have to understand about the stock market. No matter how many times India gets crushed, no matter how many companies and banks get corrupted, no matter how many industries slow down, human productivity will continue to increase and the economy will continue to progress along with it.
Friends, now we know two things or should we say two facts very well, firstly, 85% of mutual funds are not able to generate returns equal to the index and perform well in the long term and secondly, India's GDP which is the economy. It is guaranteed to go away in the next 10 to 15 years.
Then why don't we, friends, instead of investing in individual stocks, invest in low performing mutual funds and invest directly in the Indian economy which is guaranteed to boom in the next 10 to 15 years. Is this logical? Yes. You absolutely have to find people and you don't have to watch any other video on investing. You just have to start the ship once in the lowest cost Nifty or Sensex index fund. Then without you, show no smartness. You have to keep investing with complete discipline. And friends, if you do this then believe me after a few years you will feel proud of your decision.
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