Why Most Indians Don't Invest in Stocks for the Long Term?

Indian stock market surged today and #sensex climbed by 1000 points. This will surely brings cheers to many stock market investor. Lately the market nose dived, and now getting back to their original position. Last 4-5 month the investors have seen some serious blood bath in the stock market. The Investors alwsys see the stock market as the best investment option, still they unable to hold onto their portfolio for long duration. Especially when it comes to new investors. If stocks are such a good option for growing wealth, why do so many Indians still avoid them, especially from a long-haul mindset?

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Majority of the investors hold onto their stocks for less than 5 years. This short-term approach makes it almost impossible to beat the market fluctuation. At the same time Investors were very quick to panic and sell their stocks when the market drops. Stock market investor face many challenges which makes them not to sustain longer. Choosing the right stocks and spending time in keeping a close watch is time raking process. By the time they get to any point, the market fluctuates and everything gets upside down.

When it comes to stock investment, the longetivity has alwsys been a prime factor that decide the return on the investment. It is alwsys suggested to hold onto the portfolio for longer duration. Stocks can beat inflation over the long term because companies can generally increase their prices and profits alongside inflation, allowing their stock value to grow as well. This is especially true for companies that can easily pass on rising costs to customers, like consumer staples, which maintain consistent demand even during high inflation periods. To effectively beat inflation with stocks, a long-term investment approach is crucial to ride out market fluctuations and benefit from compounding returns. Here are some key points which highlights how stocks can outpace inflation:

• As the economy grows, companies tend to see increased earnings, leading to higher stock prices over time.

• Companies can often adjust their product prices to match rising inflation, allowing them to maintain profit margins.

• Investing in sectors like consumer staples can provide stability during inflationary periods as people still need essential goods regardless of economic conditions.

• Not all stocks perform equally:
  While some companies can easily adjust to inflation, others may struggle to pass on costs, leading to lower returns.

• Even with the potential to outpace inflation, the stock market can experience periods of volatility.

• To mitigate risk, it's important to diversify your portfolio across different sectors and asset classes.

Stock market return is always ride on market risk. One should remain familiar and aware before putting their hard money into cresting a wealth.

In good faith - Peace!!

Posted Using INLEO