Tuesday, April 21, 2015

A good reason to invest in equity for the long term

Many investors may be scared of investing in equity as the risk is high. Moreover, a fall in the markets can cause heavy losses to the portfolio.
A friend of mine recently made a great comment on the stock markets. He said, in the long run, stocks can give a CAGR of 10-25% (an annual growth of around 10-15% continuously year on year). Even if the stock corrects by a big margin, say 25%, it is only on the last year's price and I still have many years of appreciation intact.
This is very true for a large number of large cap stocks.
Something to keep in mind while investing in stocks.
This make it a good reason to invest in equity in the long run.

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