The word stock market is an enigma to most people as they fail to realize a few basic principles of investment. The modern investment theory may be questioned for complex analysis & fancy terminology which is beyond the understanding of an ordinary investor. However, adhering to basic investment principles can provide anticipated results.
Coined by Benjamin Graham in his books “The Intelligent Investor” and later exercised by the mythical Warren Buffett, it points out that an investment manual should be on the philosophy of “value investing” viz buying a good stock when they are undervalued and holding them for a long period of time.
To validate this investment strategy in India for investors with higher returns expectation, the time horizon of investment becomes an imperative consideration.
The long-term story of investment will definitely reward you with huge returns with this particular investment strategy, provided it is implemented with due diligence. However, a short-term expectation may not be favoured by this strategy.
For an investor to yield a value of compounding effect through investment, it is of utmost importance to keep it for longer tenure.
Apart from this strategy, spotting a value stock should be carried out with comprehensive study and to avoid systematic errors associated with human emotion.
If these factors are taken into consideration, then the investors in India can take advantage from the realm of emerging economy.