The quote about the stock market by Mr. Warren Buffet tells us what the stock market is doing with the money invested, but the Oracle of Omaha is a seasoned investor who has been investing for decades so it can be intimidating for a new investor wishing to enter the market.
A stock market is a place where wealth is generated or is lost. The investor can be anyone from a business tycoon to a salaried employee. The money is invested by opening a Demat account where paper money is electronically dematerialized. The companies list their stock on markets like NSE and BSE for the public to invest in. When buying a stock of the company you get what are called shares. They can be equity shares or preference shares. A broker is assigned to buy or sell the shares you have invested in.
What Buffet meant by using the terms “impatient” and “patient” is that investing is for the disciplined. It takes patience for an investor to invest in the market and expect a return on the money invested. This is why most wealth generated long-term is by investing in equity shares. This is possible by purchasing individual company shares and holding them for a long time or by investing in Mutual Funds by starting SIP’s (Systematic Investment Plans) to put a certain amount every month to invest in the market. An investor who wants to maintain discipline and feels a risk in investing a larger amount can select the option of SIP’s to invest with as low as Rs. 500 per month.
The advantage of investing in the stock market is the growth rate of money invested is higher than any other median of investing, for example, PF’s, RD’s, FD’s. Even property investments are not as suitable as the barrier to entry is expensive and the gains are extremely long term.
Companies conduct business, announce new products/services, have board meetings, hire staff, downsize staff, mergers and takeovers, media articles, etc. can all influence the stock market prices. Timing the market is not easy, that is the reason the general public is hesitant to learn about the stock market and invest their hard-earned money.
But…. technology and the risk-taking ability of the young generation of investors have greatly resulted in an ample amount of wealth pooled into the stock market. The use of technology and the amount of investments made in the market has resulted in the tremendous growth of wealth for the companies as well as the investors.
Events of the future can be uncertain, a person can have goals that he/she wants to achieve that requires capital, for example buying a new car, traveling abroad, wedding, buying a house, etc. Getting these goals close to reality is what the stock market can help do.
Getting into the stock market has never been easier than now with the use of apps that let you open a Demat account for free and charge small amounts of transaction fees.