Problems pave way for invention. Similarly, StockBasket was introduced to eradicate several problems of investors. Before trying to know why StockBasket was created, let’s dive into the major problems associated with investing.
Problems of investors:
Wealth destruction strategy: Many investors are unaware of the fact that only less than 20% of stocks are good quality stocks and the rest accounting around 80% stocks don’t beat the expected returns. Here is the study of the StockBasket research team:
Many investors fall prey to investing in wrong stocks due to lack of knowledge or inadequate research and hence they walk on the path that ultimately leads to wealth destruction.
2. Churning of portfolio: It has been found out that investors churn their portfolio way too much. The average holding time for investors is just 2 years! Due to this, investors don’t benefit from the power of compounding.
SAMCO presents StockBasket – India’s first buy and hold investment platform with an objective to create long-term wealth.
StockBasket research team has handpicked excellent quality stocks with its authentic research based on its proprietary framework of over 25 parameters of evaluating stocks.
StockBasket is a basket of expert-curated stocks designed for long-term wealth creation. With reasonable diversification of stocks of around 6-20 good quality stocks in one basket to produce optimum returns for you.
StockBasket is designed with a minimum investment horizon of 5 years so that retail investors don’t churn their portfolio and enjoy the benefit of compounding in the long-run of investment.
Who should invest in StockBasket?
There are many retail investors investing in quite an unorganized way. They ultimately fall prey to investing in wrong stocks that can potentially harm their wealth creation. Also, such investors churn their portfolio too much and hence they miss the benefits of long-term wealth creation.
StockBasket is created with a principle that every investor whether he’s big or small, should have access to wealth creation via the Stock market and invest in an organized way so that they don’t lose wealth. Enlisted below are the profiles of our retail investors and their needs:
· A long-term investor, who knows wealth can only be created by staying invested in quality stocks for a long period
· A student, who wants to make an investment for the first time.
· A salaried professional, who started working a few months or years back and has saved up some money to invest in a good and safe asset class.
· A seasoned investor, who has created some wealth in equity markets and understands the nitty-gritty of the stock market.
· A senior management professional, who does not have the time to track markets but wants to create wealth in the stock market.
What if a one-in-a-million chance strikes you and you fail to achieve the target corpus in 5 of your tenure of investment? All the constant monitoring and rebalancing of the StockBasket research team will all be in vain and so will be your subscription fees needed to constantly look after the performance of your basket.
StockBasket works on the principle of “We Don’t Make Money, If You Don’t”. This simply means that all your Subscription fees will be refunded to you if you fail to make the target corpus for a tenure of 5 years as specified in the StockBasket.
StockBasket is meticulously made by its research expert team that evaluates around 4500 stocks with their proprietary framework and research.
From this, the research experts team identifies the top companies that have the potential to outperform in the coming years. The universe of StockBasket is selected with the philosophy of buy and forget. They pass the 5-year Bond test. This test gauges how the businesses would perform and make money if the markets were to shut down and we came back after 5 years.
StockBasket includes these top companies stocks in their minimum 5 years of horizon basket which helps retail investors to gain considerable wealth and enjoy the long-term compounding associated with it.
Types of StockBaskets:
StockBasket has been designed keeping in mind of retail investors like you. It is built based on these following 4 variables in mind.
Financial goals: If you have a certain goal like planning an International Vacation with your family then the International Vacation Basket can be the best-suited investment option for you. Our research team has kept in mind all such goals and designed baskets as per these goals.
Long-term theme: If you think a particular sector like healthcare will benefit in the coming years then you can invest in Health and Wellness Basket.
Risk appetite: Our research team has taken into consideration the investor’s bandwidth of risk appetite from low-risk to high-risk and have created baskets: 5-Year Low-Risk Basket and 5-Year High-Risk Basket accordingly.
Time horizon: We have created baskets with a minimum of 5-year investment horizon to help you gain the benefit of compounding. However, if you wish to stay invested for longer periods like 10 years then 4x Target in 10 Years – Lite can be the best option for you.
Most dreams and goals come with a financial cost attached to it. Following your dreams can be expensive if not planned well in advance. Do you know how much will your dreams cost you? Considering one’s standard of living, financial goals which may include providing for children’s higher education and other expenses like retirement it becomes important for a person to plan his future wisely. What if there is a way to not only have a stable future but at the same time maintain your standard of living and the changing lifestyles. Investing is the most effective way to achieve this, having said that it is crucial to understand the timing of investing in ensuring growth in your wealth.
Investing early and the difference it makes might come to you as a surprise. Investing is usually associated with old age especially when it comes to reaping its retirement benefits, but little do you know about the major benefits of investing early for retirement or any long term financial goal.
MAGIC OF COMPOUNDING
The most important benefit of investing early is the power of compounding which is referred to as the greatest mathematical discovery of the world by Albert Einstein. But why is this tool so important and powerful? The following example will help you understand the concept of compounding and make you believe how beneficial it is to start investing early considering the difference it makes compared to investing at a later stage in life.
Let us take an example of 2 potential investors, Ramesh (age 25 years) and Suresh (35 years). Both of them have a common goal of investing for retirement at the age of 60. Ramesh starts investing early and he invests a sum of Rs 10000 @7 percent (with a contribution of Rs 10000 every year thereafter). As Ramesh turns 60, after 35 years of staying invested he earns a sum of Rs 1489135. At the same time, Suresh who began investing at a later stage in his life with the same investment amount of Rs 10000 @7 percent (with a contribution of 10000 every year) was able to accumulate only Rs 686765 at the age of 60, after 25 years.
VALUE OF INVESTMENTS AFTER COMPOUNDING
HOW TO MAKE YOUR MONEY WORK FOR YOU
This question highlights the power of compounding, wherein the money you invest and the yearly interest you earn on it is reinvested from time to time (here it is on yearly basis) along with an additional contribution if any (Rs 10000 in the above example). As a whole your initial investment, the interest earned on it and the interest you earn on that clubbed amount (initial investment + yearly interest) when you keep reinvesting works to build your wealth. Thus the number of years or duration for which a person stays invested becomes very important when it comes to earning higher returns. This is practically possible if you start investing early because the power of compounding proves to be fruitful that way.
Age is not just another number when it comes to investing. Taking a decision to start investing at an early stage of your life, say in your twenties gives you exceptional advantages in the form of time and ability to tackle or overcome the investment risks that might persist at a later stage. An investor’s age has a considerable impact on the amount of risk he or she can withstand. At a later stage in their life, people shy away from investments, especially individuals reaching retirement age. It is better to start investing early so that you have enough disposable income to cover your risks which otherwise would be saved for retirement.
SMART WAY TO CREATE WEALTH
A person does not require a lot of money to build his wealth neither does he need to possess professional investing skills and knowledge. Smart and timely investments can help work wonders for first-timers or beginners in the world of the stock market. StockBasket is a platform for such beginners to make smart investments from a long term perspective using the basket approach. Each basket consists of expert-selected stocks that help to reasonably diversify the risk and at the same time, help you create wealth. These stocks are carefully selected using SAMCO’s research system and give exposure to high growth, high return companies to an investor.
In the end, to summarize the above points, it is wise to start investing early considering the benefits of early investments viz. the power of compounding and the age factor.