why would you want to invest in stock markets in the first place...

Before asking yourselves on what all needs to be known to make a successful investment, you bet you get the answer to why you want to invest in the stock market?  Until and unless you have the answer to the 'why' - you never gonna make a fortune out of your investments in equity.

Investments are something that help you create assets. Assets are something that gets you money on a recurring basis. We would be financially independent if we have more of assets than liability i.e. if we have more source of earnings than source of expense.

Now if we know investments create assets, we need to know what all kind of investments are possible and what are the associated risks with it. 

1. The easiest way to keep aside some money for later use is through savings i.e savings account with bank. This might yield you returns upto 4%. Which means 1 lakh invested would turn 1.04 lakh next year.
2. People dont find it difficult investing in bank fixed deposits FDs. This can provide return upto 10%.
3. Investing in gold is not a bad idea either. We somehow feel the gold prices would never come down. This has given a consistent 7.5% return over the last 30 years.
4. Fortunately few identify long term bonds and government securities and invest in them for long periods of time. This has returned over 12% value on investment from 1980's.
5. Investment into equities becomes the best choice since its return is as fascinating as 18% from 80's.
6. Real estate would be the winner in terms of ROI, but we need to know the disposable money we need to have to buy some land. 

Like most of you I too am an employee. So given these options, what priority would I assign into each mode of investment? Always I need to keep in mind, my investments should return me more than what inflation treats it. Inflation being at 8% would more likely rule out option 1 and 2. Investing in gold might turn risky as it may have storage hazards, moreover its return over a broad period isnt attractive as well. Its definitely better if we go with options 4 and 5 to begin with and later do well with option 6. 

If we can keep aside 1000 rupees every month, then investing into selected stocks are definitely bound to give excellent returns. There are no better means to save for future with the low disposable income we have. Over a long term perspective you might not regret putting your hard earned money into capital market. So its all the 'why?' that needs to be ringing alarm in your ears.

Get your gear ready, because we are going to learn together on how to make successful investments.. watch out this space for more.