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20, 30 & 40 years are the Value Investing Period!
Stocks are like Trees!
 

We can compare Stocks as Trees!!

One of the question newbie investors ask is: Why i wanted to hold stock for 10 years?  Let us try to answer the question.

In the stock market, we can make profit/loss by buying/selling:

  • Every Day
  • Every Week
  • Every Month
  • Every Year
  • Every Decade
  • So i should not sell?

    In long term investing we buy stocks which are considered as Plants. In the long run some of the plants will grow as Trees! Still we do not sell them as there is no limit for Tree Growth. Instead, we use the Fruits given by it.. They are Dividends!

    So what if Tree was ruined?

    Yes. We agree that point. We cover the risk of company going bankrupt through Diversification. The Infosys investors had invested in TCS, Wipro & Pentasoft too. Among them Infosys reaped 1000 times growth, Pentasoft was closed down.

    Those who have invested in Infosys for eg: 1 Lakh Rupees are reaping same 1 Lakh Rupee as Dividends (after 20 years)

    This is the Power of Stocks!

    So we buy a plant, make it a tree & consume the fruits.. It is okay to occasionally cut some branches of the tree on peak times of bull run :)