Long-term asset creation in Share Market

(मराठी आवृत्ती)

Share market is indeed high-risk area for investment. I have been discussing an idea to create assets in share market with many of my friends (Nakul, Yogesh, Manoj and many). As the saying said, Big things can't be built overnight, similarly asset can not be created in a single day or even in short term. One of the traditional way of creating long term asset is buying a house. In my opinion it is a huge liability, you buy it once and keep paying over a long term (home loan) plus taxes, maintenance and then you get a house. 

Is it possible to create an asset in high-risk area like share market?

If you act smartly, yes it is possible. There are many different ways to do it. One of the way is as below

I bought 30 shares of Asian Paints @1370 Rs. in May 2019. As of Dec 2020, the share reached to Rs. 2770. It is more than 100%. Side note: I am not a good share market investor. Somehow due to strong fundamentals and holding it more than 1 year it gave me these returns. Not all my share decisions were such a good decision. 

I sold 13 shares @2700 in Dec 2020. It gave me back Rs. 35000. In May 2019 I had invested Rs. 34250. The tax and brokerage amount is already adjusted. Now I have left with 12 shares for which I have not paid a single Rupee. These 12 shares has to be locked in the account for next 20 years. This will work like an asset. 

If one can collect such shares in the portfolio, one can definitely create long term asset in share market. 

Few after thoughts

1. Should I not track those shares? 
1. In high risk area, stop-loss is very important. Share market will keep on rising but when to exit from investment is also important. Nothing in share market should be kept with closed eyes. Keep tracking the price. If it falls drastically or fundamentals of company is shattered. simply sell the stocks and get out of it
2. What is the right price to exit?
1. There is no single answer for this. Whenever you say the time is right, get out of it.