Thursday, May 5, 2011

The story of SHARES..how simple they can be

We hear it Rozana..we live in one of the FASTEST GROWING ECONOMY of the world ..but how does that benifit us..THE COMMON MAN... let me show u the benefit..something that could be as easy as sixth grade mathematics
The share bazaar..when a lay man hears that word the first glimpse that comes to his mind is a news channel and the rush of parallel lines at its bottom...but i wish he could have known  what wonder this share market can do
Let us assume an average Indian guy who plans of investments upto 10,000 would generally go in a post office or a bank aiming to double the sum in something like seven years.But if he invests the same amount in the share market let me show you what can happen:
Let us aim at a daily profit of 0.5% on our investment i.e we aim to invest in a share of Rs 50 that would grow upto like 50.25 at the end of the day..which is'nt a big deal..or a share of 1600 that would grow up to 1608...calculating at this rate what we earn daily on our investment of 10000 is Rs 50..so at the end of the month you would have gained a sum of 1500 and at the end of the year something like 18000...your investment is still safe...and the worst part is that at the end of seven years we have like 1.25 lakhs and the investment
Now imagine and compare this with what an ordinary indian guy does..but is a daily profit of 0.5% so easy...no its not...i am no economics or commerce graduate(i am yet to touch any such books coz i dint study those subjects in school either) other than  i do have a regular glance at the newspapers...take an instance that happened yesterday...hero honda declared to give a 1750% dividend to its share holders...now i would definetly be intrested to invest in hero honda and assuming i did so...the share that was priced at 1600 in the morning grew upto 1697 at the end of the day...a profit worth 6% i.e 12 days of work done for me in a single day...there can be instances when the vice versa happens but then we have next 29 days of the month to cover it up..:)
As a factor of safety i would also like to state that though the sensex went 250 points down today still we had like 20 companies whose share went up by more than 0.5% http://www.bseindia.com/sensex/mktwatchR.aspx?filter=gainer*group$all$a
Now if even 1% of the indian population invests we could have $2.5 billion of investment in the share market and that would definetly boost up the economy.So instead of letting your money rot in the banks go for the share market and be a part of the INDIAN GROWTH..:)



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