Indian Stock Market News, Equity Market and Sensex Today in India | Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

Long term investing: Points to ponder
Tue, 3 Dec Pre-Open

At Equitymaster, we often come across queries like what kind of returns one can expect from the equity markets in the long term. If only, answer to the question was that simple. For the kind of returns one can expect depends upon the time horizon and stock selection skills. And most importantly, investor's behavior. Infact, the latter is so important in investing that there is a separate discipline - Behavioral investing that deals with different aspects of investor attitudes and their influence on investing decisions and returns.

We have the cases of legendary investors like Mr. Warren Buffet or Mr. Peter Lynch who have earned spectacular returns over the years. And then there are retail investors who have burnt hands in stock markets. The latter are mostly the people who get carried away by the bull run, buy at the top of the market cycle and are the first to get out at as soon as a correction takes place. These are the people who become victim to the herd mentality and lack confidence since they base their investment decisions on the basis of popular opinion, regardless of their own analysis about the company fundamentals, valuations and most importantly a self analysis that includes assessment of the risk appetite, return requirements and the investment horizon.

So what explains the success of a few in the equity markets? It indeed requires a much disciplined approach to make gains in the equity markets. To ensure long term returns in the market, it is important to thoroughly examine the earnings quality, management quality and to make necessary adjustments for favorable macro conditions that may make the current earnings look good but may not stay in the future. Once you arrive at an intrinsic value and know that you are not overpaying for a stock, you will automatically be confident about your investments and will not get influenced by any random news that could make you doubt your investment decisions.

Last but not the least; equity investing is inherently fraught with risks and volatility. Despite making right investment decisions, there may be times when a stock does not perform well irrespective of how strong the respective company's fundamentals are. In order to minimize these risks, we believe one should always follow the principle of asset allocation while investing in equities.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

Read the latest Market Commentary

What else is happening in the markets today? Dig in...

Equitymaster requests your view! Post a comment on "Long term investing: Points to ponder". Click here!


Views on News

Beware of the Oil Rally (Fast Profits Daily)

Mar 8, 2021

Don't jump on to the bullish crude oil bandwagon.

Are Investors Losing Confidence in Franklin Templeton Mutual Fund (Outside View)

Mar 8, 2021

PersonalFN highlights the outcome of forensic audit report ordered by SEBI and checks if investors are losing trust in Franklin Templeton Mutual Fund.

The Bubble Noise is Getting Louder. Should You Be Fearful? (Profit Hunter)

Mar 8, 2021

With the smart money passing its verdict, should you be fearful of a stock market crash?

The Best Stocks in a Volatile Market podcast (Views On News)

Mar 5, 2021

Rahul Shah on the qualities that make for a good investment in an up and down market.

A New Super Cycle in Metals? (Fast Profits Daily)

Mar 5, 2021

In this video, I'll tell you if there is huge money to be made in metals or if there is more to the super cycle story.

More Views on News

Most Popular

It's the Beginning of a New Bull Phase in Smallcaps (Profit Hunter)

Feb 24, 2021

Last time the smallcap index crossed 19k a big correction followed. Here's what makes it different this time.

Make Rs 5,000 Per Day Trading the Market (Fast Profits Daily)

Feb 25, 2021

In this video, I'll show you how to get started on the path to daily trading profits.

The Hidden Tesla in My Great Indian Wealth Project (Profit Hunter)

Feb 23, 2021

An Indian company founded three decades ago in a garage caught my attention...

Gold 65,000 and Silver 84,000 in 2022

Feb 26, 2021

In this episode of the Investor Hour, India's #1 trader, Vijay Bhambwani, talks to us about the stock market, his new targets for gold and silver, the best long-term investment opportunity, and a lot more.


India's #1 Trader
Reveals His Secrets

Secret To Increasing Your Trading Profits Today
Get this Special Report,
The Secret to Increasing Your Trading Profits Today, Now!
We will never sell or rent your email id.
Please read our Terms


Mar 8, 2021 (Close)