Many people earn in short term trading but forgot to invest for long term purpose
For example
You earned rs 20000 a month
What if you lost rs 20000 next month
Hence? Zero
You won't be sad. You will say..i have lost what I have earned from market..
But what about opportunity cost??
Lets take same example again
You earned rs 20000 profits
Now you can invest 10%-15% out of that that profit earned
Now next time you know your limits?
RS 18000
Even if you lost rs 18000, you would be having those rs 2000-3000 which are safe to a extent
I used the word to a extent as nothing is permanent in stock market.
Keep investing what you earn from market.
Now repeat this scene 1 and scene 2 for
1 month
1 year
10 years
20 years?
Did you notice??
Scene 1 and scene 2 comparison
RS 0 and rs 3000 saving
RS 0 and rs 36000 saving
RS 0 and rs 3.6 lakhs saving
RS 0 and rs 7.2 lakhs saving
Above saving have been just savings
If you have invest same in mutual fund and any other investment machine
You would have earned more
Example - year 2008
People lost what they earned
But would have saved if they had invested
Same bubbles have been in earlier times.
So.
Never forgot to invest when you are enjoying short term gains
Article by vibhor Varshney
SEBI registered research analyst