One word that is being used a little bit too frequently these days in India is ‘Investment’ and not only the business people & the traders but also the common households & the students are using this particular term quite often. Now, you may relate to this as you too might have heard your friends, known ones or someone from your family members talking about making investments for future returns. Else, if not them then at least you might have seen some or the other kind of investment related advertisement upon television and upon the various social media platforms.
These advertisements may be regarding making investments in the Stock Market Shares or the Systematic Investment Plans (SIPs) of the Mutual Funds or maybe some other kind of investments. The one thing that you might have found common in all these advertisements is that they all encourages you to make investments. Moreover, you might have also noticed that in order to encourage you to make investments, these advertisements conveys you the message that your investments would generate you a Higher Rate of Return in the future. Therefore, if analysed carefully then these advertisements sells the idea of you being rich!
Now, here comes a very debatable question that is there anything wrong in being rich? Well, in my opinion there is nothing wrong in being rich at all, if the wealth is acquired by the fair means. More importantly, who does not care about future? Almost each and every one of us wants to generate a fortune for ourselves, which we can access in our future days. So, these advertisements are designed in such a manner that they prompts you the idea of making make investments, at the same time making you believe that it is your lottery ticket to get rich.
Interestingly, no matter how cheesy these advertisements may sound but they are not wrong. The claims made in the advertisements when you are encouraged to make investments believing that it will make you earn fortune are not wrong. It is the truth of the modern and globalized economy that just by making correct investments and selling out the purchased shares at the right time, anyone can become truly rich!
If you are reading this article then I am sure most of you must have read about Warren Buffett, an internationally big name in the list of richest people and world’s business or the Big Bull of the Indian Stock Market Rakesh Jhunjhunwala! My guess is that now you also know that what made them super rich, yes of course, it is their investment strategies. The question that occurs now is that how the investments in various portfolios can make people rich! To understand this we first need to understand that what is an Investment? Well, Investment is the dedication of an asset to attain an increase in value over a period of time. Investment requires a sacrifice of some present asset, such as time, money, or effort. In finance, the purpose of investing is to generate a return from the invested asset.
Now, what do we understand from going through the concept of an investment? It is simple; you do not need to put so much pressure upon yourself to understand the concept of an investment by going word by word. I will lay it out for you in a simpler manner, when you put your money into something like in the stock market or in the mutual funds, then the ‘Principal Amount’ put by you is considered your investment. Now, begins the game, as the investment advertisements only projects the half-truths and never shows the ugly side of the investments. As, whenever you make any kind of investments, there comes 3 Possibilities, which are Up, Down & Stagnant.
It is not possible that each time whenever you will make an investment your investments are going to make you rich only. Neither it is a concept of Binary where you will get only two outputs, so if your investments are not making you rich then this does not always mean that your investments will completely fail you. Your investments may leave you hanging at a position where you would not see a rise or a fall and the value of your investments would be more or less near to your principal amount only!
Aren’t these some interesting aspects about the market investments? Well, now I guess that most of you would have understood that how these investments makes a person rich or not rich. Moreover, if you are someone looking up to carry out investments, then I have a vital piece of information for you. Investments are of various kinds and it is not only about placing your money on a winning horse!
The most common and the legal kinds of investments that you can make are in – Stocks, Bonds, Mutual Funds and ETFs, Bank Products, Options, Annuities, Retirement, Saving for Education, Alternative and Complex Products, Initial Coin Offerings and Cryptocurrencies, Commodity Futures, Security Futures & Insurance! In addition, you need to remember that timing plays a very crucial role in making investments, so always understand the nature of the market at the time of making investments and you will witness a desired result from your investments in the market.
Written By NEEL PREET – Author of the Books, Voice From The East (2016); Journey With Time Place And Circumstances (2018) & Indian Defence Files (2021).