Here we go again with the allure of high returns! It reminds me of the story of a child in India, eager to fly a kite during the Makar Sankranti festival. He wants the kite to soar high quickly, but if he releases the string too fast, the kite might just crash. Investments are a lot like that; chasing high returns without understanding the risks can lead to losses.
Let’s get one thing straight: Seeking 10-15% returns per month is extremely ambitious and comes with significant risks. Traditional investment avenues in India like Fixed Deposits or Sovereign Bonds give annual returns in the range of 5-7%, which translates to less than 1% monthly.
For returns as high as what you’re aiming for, one would typically look towards equity markets. But even the stock market, using a balanced investment approach like the Roots and Wings philosophy, can provide on average 12-15% annually. Here, Roots symbolize the foundational elements of solid companies: strong balance sheets, competent management, and consistent returns. Wings, on the other hand, signify the aspirational growth aspects: rising revenue, profitability, and a trajectory towards market leadership.
But even then, achieving 10-15% monthly is beyond the norm and would require aggressive trading strategies, which are not only risky but can also be stressful. Speculative instruments and strategies, derivatives trading, or betting on highly volatile stocks can sometimes give such returns, but they can also result in severe losses. Remember, higher the returns, higher the risks.
For those who prefer a steady climb rather than a potential roller-coaster ride, the LSG framework (Liquidity-Safety-Growth) by Jama Wealth offers a more measured approach. It emphasizes a judicious asset allocation in line with one’s risk profile.
To sum up, while the lure of high returns is tempting, it’s crucial to understand the risks involved. As the legendary investor Benjamin Graham once said, “The essence of investment management is the management of risks, not the management of returns.” If you need guidance navigating the investment landscape, consider seeking out a SEBI registered investment advisor or investment advisory services like those at Jama Wealth to craft a strategy tailored to your goals and risk appetite.
