Video Editor: Sandeep Suman
Is investing in equity market risky?
or
Is it a brilliant way to gain large profits?
What are the ways in which you can invest in equity market? What are the common errors that people make while investing in equity market? Dr Gaurav Mashruwala answers many such questions in this episode of Dhan ki Baat.
Equity = Stock Market
Equity can also be referred to as the stock market because we share the ownership. Whenever we buy shares from a company, we become a sharing party to its ownership.
There are ups and downs in the market as the company makes gains or incurs losses due to government policies, economic conditions or obsolete technology used by the company. These are a few of the many such reasons behind the fluctuation of the price of the company which may lead to profits or losses. But if we keep investing in equity for long, the chances of gaining profits is very high.
According to Mashruwala, if you can’t invest for a longer period then you must not invest in share bazaar.
When Will You Start Getting Profits?
If you have any cash that you may need only after a decade, you must invest in equity market. For instance, if you are 30 years of age and have 15-20 years left before your retirement, you can invest your retirement corpus in equity market. If you have young kids who will need money for higher education in 15 years or so even then you can invest in equity market.
There are two-three ways of investing in equity market.
Make an online broking Demat account. However, there are two skills necessary for such investments. First, you should have knowledge about the industry. You should know how to read balance sheets and quarterly reports and only then you should invest. Second, if you know how to invest but you lack time, don’t invest in equity market with a direct portfolio. But there are still other ways to invest, such as mutual funds.
A lot of mutual funds are invested in equity market. Then there are different specifications like large, mid and small cap funds. Your advisor can make a portfolio for you. But when investing you should be aware of your aim. Are you investing in equity, gold, real estate or debt? Always focus on the aim and accordingly select the asset class.
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(This story was first published on Quint Hindi and has been translated by Anmol Saini.)
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