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Mutual funds

 

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Why to Invest

Suppose you have had (Indian rupees) Rs 10000 in 1990. what is the value of the money in 2006? Let us see.

We will take following cases

 

a) you have invested in bank

b) you have bought gold for that amount

c) you have invested in stocks

d) you have invested in land

Today’s value of the money is shown in the table

 

 

Year

No. of years

Bank

Gold

stock/mutual fund

stock/mutual fund

stock market

stock market

amount

rate

amount

rate

amount

rate

amount

rate

amount

rate

amount

rate

1990

0

10,000

8

10,000

6.5

10,000

12

10,000

20

10,000

30

10,000

50

2006

16

34,259

8

27,390

6.5

61,304

12

184,884

20

665,417

30

6,568,408

50

 

 

 

 

 

 

 

 

 

 

 

 

 

 

total profit %

243

174

513

1,749

6,554

65,584

 

Land investment yields varying return from time to time, varying with geographical locations

Best yield may be 7000 to 1000% less than stock market. 

It is shown in detail below

 

year

No. of years

Bank

Gold

stock/mutual fund

stock/mutual fund

stock market

stock market

amount

rate

amount

rate

amount

rate

amount

rate

amount

rate

amount

rate

1990

0

10,000

8

10,000

6.5

10,000

12

10,000

20

10,000

30

10,000

50

1991

1

10,800

8

10,650

6.5

11,200

12

12,000

20

13,000

30

15,000

50

1992

2

11,664

8

11,342

6.5

12,544

12

14,400

20

16,900

30

22,500

50

1993

3

12,597

8

12,079

6.5

14,049

12

17,280

20

21,970

30

33,750

50

1994

4

13,605

8

12,865

6.5

15,735

12

20,736

20

28,561

30

50,625

50

1995

5

14,693

8

13,701

6.5

17,623

12

24,883

20

37,129

30

75,938

50

1996

6

15,869

8

14,591

6.5

19,738

12

29,860

20

48,268

30

113,906

50

1997

7

17,138

8

15,540

6.5

22,107

12

35,832

20

62,749

30

170,859

50

1998

8

18,509

8

16,550

6.5

24,760

12

42,998

20

81,573

30

256,289

50

1999

9

19,990

8

17,626

6.5

27,731

12

51,598

20

106,045

30

384,434

50

2000

10

21,589

8

18,771

6.5

31,058

12

61,917

20

137,858

30

576,650

50

2001

11

23,316

8

19,992

6.5

34,785

12

74,301

20

179,216

30

864,976

50

2002

12

25,182

8

21,291

6.5

38,960

12

89,161

20

232,981

30

1,297,463

50

2003

13

27,196

8

22,675

6.5

43,635

12

106,993

20

302,875

30

1,946,195

50

2004

14

29,372

8

24,149

6.5

48,871

12

128,392

20

393,738

30

2,919,293

50

2005

15

31,722

8

25,718

6.5

54,736

12

154,070

20

511,859

30

4,378,939

50

2006

16

34,259

8

27,390

6.5

61,304

12

184,884

20

665,417

30

6,568,408

50

2007

17

37,000

8

29,170

6.5

68,660

12

221,861

20

865,042

30

9,852,613

50

2008

18

39,960

8

31,067

6.5

76,900

12

266,233

20

1,124,554

30

14,778,919

50

2009

19

43,157

8

33,086

6.5

86,128

12

319,480

20

1,461,920

30

22,168,378

50

2010

20

46,610

8

35,236

6.5

96,463

12

383,376

20

1,900,496

30

33,252,567

50

 

Risk ,Safety, high returns:

Yet there is the risk element in stock market. So we have to judge our risk capacity and decide the portion of our money to invest in it. At young you can take more risk. But not at old age.