Mostly people look for capital gains. Not sure why …maybe it is the media effect or friends effect..

Sadly not enough data is available in India about the returns – even company websites do not have the details. For e.g. I cannot know how my shares have fared if I bought Wipro in 1980 for Rs. 10,000. If there is a website where I can check out how much I recd. as dividends (assuming I bought more shares on that day with the dividends)…I will be able to calculate the GROWTH OPTION returns in that company. Believe me, it will be amazing…

here read this note : ” To build wealth in equity people look for capital gains…Not if you want to build real wealth. Studies have shown that over the last 20 years, a full 43% of total stock market returns have come directly from dividends. Yet the current average yield on the S&P is only 1.7%!”

Similarly if you look for good shares giving say 2-4% p.a. dividend yields, you will build good wealth over a long period of time…like i said in a FB post not long ago…my mothers investment in 4 digits in Hero Honda now gives her dividends in 6 digits….this is without reinvesting the dividends…of course there is time 1985 to 2011 – 26 years!!

so believe in value investing, SIP, and the power of compounding. Believe me, there is no short cut for creating wealth….

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  1. Totally agree with you subra.. No Shortcut to wealth.. Temporary gains in the stock market are driving people to get rich quick schemes.

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