Magic of compounding — Stock Market is best investment as compared to other assets

The value are available by you of 1 rupee at different rate of return from the equity investing. You’ll be amazed to observe how one rupee could be compounded annually therefore much at different price of return from collateral investing. There is absolutely no other asset course which can give a lot more than 12% come back in the long run. There is one asset class, that may supply the fabulous return greater than 12%, which is definitely Equity.

 

No.of years 12% 15% 20% 25% 30% 35%
1 1.12 1.15 1.20 1.25 1.30 1.35
2 1.30 1.32 1.44 1.56 1.69 1.82
3 1.40 1.52 1.73 1.95 2.20 2.46
4 1.57 1.75 2.07 2.44 2.86 3.32
5 1.76 2.01 2.49 3.05 3.71 4.48
6 1.97 2.31 2.98 3.81 4.83 6.05
7 2.21 2.66 3.58 4.77 6.27 8.17
8 2.48 3.06 4.30 5.96 8.16 11.03
9 2.77 3.52 5.16 7.45 10.60 14.89
10 3.11 4.05 6.20 9.31 13.79 20.11
11 3.48 4.65 7.43 11.64 17.92 27.14
12 3.90 5.35 8.92 14.55 23.29 36.64
13 4.36 6.15 10.70 18.19 30.29 49.47
14 4.89 7.08 12.84 22.74 39.37 66.78
15 5.47 8.14 15.41 28.42 51.19 90.16

 

Indian stock market average return is 15% to 18% in 15 years.

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Wealth can be created, not by timing the market, but by time in the market. Suppose you get annually 12% return from the equity, your money can be 5.47 times in 15 years. If you get annually 15%, your money can be 8.14 times in same period. If you get 20% annually, your money can be 15.41 times in 15 years. Is there any asset class which can beat equity in 10 to 15 years? Solution is NO. So equity investment is best investment for the long term. Stay invested at least for 7 to 10 years.

For more Stock Market Articles: Small caps,Large Caps,Multibaggers,Compounding formula

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