Why to invest for long term?

 

For middle class salaried investors, it’s important to focus on long term investing.

You don’t have to play stock price target game.

That buying and selling based on targets makes only brokers rich through commissions.

Since you have monthly cash flow as your salary, you can easily save consistently in FD and then invest that amount in good shares when market/ particular stock is down.

 

Money in absolute terms has more value than returns.

Even if you get 50% returns by trading on 5 lakh amount, it won’t change your life. Next time, you might lose money in trading as it happens with most traders.

Trading drains your energy, focus and valuable time which you can otherwise invest to learn newer skills like cooking, photography etc.

 

But if your 5 lakhs amount invested becomes 25 lakhs over next 5 years, it has potential to change your life.

You can invest that 25 lakhs to buy flat, land or another good share.

When investing, analyze if this company’s marketcap can go 5x over next 3 to 8 years.

It may take 1 year or 10 years for marketcap to become 5x or it may even become 20x based on sector tailwinds. Because no-one knows about the future. Only God and liar can tell accurately about future. One can just predict general trend based on management and sector track record.

But it will help to make you money without much worry. You will be able to sleep peacefully at night even if that stock goes down occasionally.

Middleclass investors have limited amount of capital. So its better to invest in sound businesses and stay invested over business cycles for long term.