INVEST vs TRADE 2 (cont...)

We had taken only strong and good companies as example.

In first part Nifty moved up strongly in 2 years period (Jan 2006 to Jan 2008) but why Unitech gave profit, Sasken gave loss and Infosys with no loss &and no gain.

In second part Nifty crashed a lot Jan 2008 to July 2008 but here Sasken gave profit, Unitech gave loss and infosys still remains at same price.

Why we had taken this topic at this early stage is because most of them enters the market by saying I will invest for 3 years or more horizon in good company and will not care about the stock within that period.

Let us consider 3 different individuals each had invested Rs. 10,000 in Jan 2006 & their values on Jan 2008 as well as on July 2008.

X invested in Unitech: Rs. 6,25,000 + (Jan 2008),,,,,, Rs. 2,25,000 (July 2008)

Y invested in Sasken: Rs. 1,870 + (March 2008),,,,,, Rs. 3,300 (July 2008)

Z invested in Infosys: Rs. 10,000 (Jan 2008),,,,, Rs. 10,000 (July 2008).

Every one looks at X and there by investing their entire savings in a single company for longer term say 5 years or 10 years. One factor which really hurts is even professionals, financial consultants and analysts are also recommending this. No one cares what happened to Y and Z.

Few Questions for Today:

Can any one predict and recommend you that "This particular stock will give you exactly this percentage returns in next 5 years"?

Can any one predict the exact price of Gold in next 2 years?

Can any one predict the exact price of Oil in a year time?

World is full of uncertainity and stock market is no exception. So Friends this is not the right place for investment with guaranteed returns in fixed time period. The better place for you will be Bank's FD or RD, Govt Bonds etc...

Those who have risk appetite and ready to swim in the stock market can come with us to learn and get maximum benefit in the coming posts.