By Devraj Singh Kalsi
Reading stories of investors with the foresight to invest in the right kind of stocks that created wealth for them is truly motivational as it showcases their bravery. Without much technical data to support their decision-making decades ago, it is rather difficult to believe the sound fundamental homework they conducted before tossing their hard-earned money into the choppy seas of equity markets.
The sight of a charging bull on the road is certainly a fearful sight, but the bullish run on the bourses warms the cockles of the heart when you read your money has fetched four-fold, multi-bagger returns in just a few months and you wish to plough back the profits and stake the capital on another dark horse that only you know can pull off a major rally that takes all financial experts for a ride. You really wish God to whisper the name of the stock that can make you a billionaire and save you from the struggles and uncertainties of a writer’s life.
Not all writers churn out best-sellers to get hefty paychecks from publishers and there aren’t too many maharanis or dowagers left to sponsor an indulgent lifestyle in exchange of literary companionship.
Stock market, despite all the risks, offers a window of opportunity for writers to build a retirement corpus. There needs to be a smart sense of investing to get a rocking portfolio that draws envy from experts who wonder how this non-financial wizard operates. If profit is indeed imagination, writers are also entitled to imagine it in abundance.
Optimism and positive outlook is important as the stock market is similar to life in many ways. You have to be patient and stay invested for long term as those who saw their wealth perish during the recession of 2008 without suffering a heart attack were able to bounce back with double their earnings in just a decade. This is the most recent story of stock market success that is read out as a template to every investor who thinks it is the place to gamble away all you are left with.
The story of recovery is supported by facts and the financial experts give credible example of a modest investment of how a few thousands has given over fifty times in certain stocks and this makes you determined to try your luck when the EMI[1] lifestyle fails to leave behind much for you. Driven by the greed to grow wealth manifold, middle-class families now talk of mutual funds, IPOs, and shares. Homemakers and students also invest some amount in blue-chip shares to fund their lifestyle needs. With the share market giving handsome returns consistently, hopes are high that 2024 will repeat the successful rally seen in the previous year.
With elections lined up, the aspect of volatility is a concern. With nations going to war like having a tournament, nobody knows how this year is going to pan out. But the strong fundamentals of the economy and a robust banking system fuel hopes that even if it is a slower than expected, it would still be a good year for the stock market indices. The fear of another recession does not intimidate the small investor or the big player as diversification mitigates the risks involved. He continues to park his funds in the leading sectors promising double-digit returns.
For a salaried middle-class householder, the stock market makes it easy to meet the growing demands of his family without stress. Greed is no longer a bad word and a better option than trying out foul means to fund big dreams. This paradigm shift in the mindset is the biggest achievement in a decade.
Now you hear parents proudly declare they have bought blue chip shares of the best companies and leading banks to ensure higher education and marriage of their kids. With stocks entering the life of the new generation, the older generation is also forced to do a rethink. The liberalised economy with a huge market size is not going to make the banks fail. With retail banking turning out to be more attractive than corporate banking, with housing and car loans growing, it is most unlikely they will crash. The instances of recent bail-out by the government further cements the faith of investors.
Buy business class tickets with stock market gains and go for a holiday trip abroad. Relish the experience of five-star exotic dining with family and friends. Everything is possible if you scoop up a big chunk of profit by selling your shares. You do not mind spending it as the windfall gain came sparkling just like your Diwali bonus to sponsor your fancy outings. The ‘live for the day’ mantra makes people free from guilt as they know they have not wasted their hard-earned money but sponsored the treat with the profit earned from the stock market. Some divine force collaborates and delivers lucrative returns to make life a roller-coaster ride for you!
When it comes buying consumer durables, a similar mindset prevails. The stock option is the best way to bring home a smart LED or a side-by-side refrigerator by utilising the profit from the shares to avoid the pocket pinch. Meeting the rising aspirations, ranging from branded apparel to gadgets and luxury watches to durables, in the times of inflationary market trends without banking on a salary hike is quite within the realm of possibility.
Exercising prudence and displaying the tendency to create wealth for the long term, even if the shares do not deliver positive returns in the short term, there is always the scope to deny you have put it in the wrong basket and keep boasting that the fundamentals are strong and your research analysis says the chosen stock would soar twenty times after a decade of staying investing to deliver windfall gains. It is most comforting to forget the investment and continue with the journey to buy profitable stocks instead of mourning over the lost opportunity. Such is the philosophy of life that matches with the snakes and ladders kind of movement of stock indices. One has to move ahead in life and look forward to better times instead of mulling over the wrong choices and decisions made in the past.
When you see your driver or the housemaid trading in shares and offering you tips regarding the best picks for the day, it is time to realise you are a late entrant in a market that has already broken the class barriers with commendable success.
[1] Equated Monthly Instalment
Devraj Singh Kalsi works as a senior copywriter in Kolkata. His short stories and essays have been published in Deccan Herald, Tehelka, Kitaab, Earthen Lamp Journal, Assam Tribune, and The Statesman. Pal Motors is his first novel.
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