Saving for growth

Time and again we reinforce the point that for an investor looking to really grow their savings, one cannot afford to ignore equity-based investments. However there is another set of investors that ask questions such as: where should I invest my savings in order to make maximum gains from rising markets? The straight and honest answer to this question is - we don't know, and in all probability, nor does anyone else. There are two problems with asking this question. One, the person posing the question wants certainty; and two, they want the maximum possible gains. If they make 10 per cent during a rally and later discover that they could have made 12 per cent some other way, they consider themselves to have failed and the person who advised them to be a complete fool. Let's take a moment and figure out what we mean by investing for growth. In simple terms, it means investing for the long term in order to grow your capital. Fundamentally, there are two ways of investing in a business. One is to lend money to it and the other is to own a part of it. When you lend money to a busi

This article was originally published on October 05, 2020.