Is this the time to invest in the stock market?
Let’s say you have a million bucks you don’t immediately need. What do you do with it? Keep it in your savings and make 2% per annum — that’s 2 full tanks of petrol per year! What about fixed deposits? 6 full tanks? 8 at best? For a whole year!? No thanks. If you’re thinking of buying dollars or any other forex, I will explain in a later article “why”, but just know it’s not the best idea as an investment, and in the current context, not a very easy one to execute either.
Crypto is hot right now. Bitcoin and Ether are consistently breaking their ATHs, (and the world of NFTs are definitely worth looking at, albeit cautiously). Bitcoin is a great store of value — dethroning even gold in its wake for the simple reason that bitcoin was supply-limited from inception, while increasing quantities of gold end up serving a decreasing marketplace. Historically, people found value in physical goods (gold being its most prime example), but while the rest of our lives move online, we have begun to see less value left in the physical world. Better to convert those bulky gold jewellery in your safe into tiny digital bits and store them in a digital vault, and have their value grow exponentially in a digital-driven world. While Bitcoin is a great store of value, trading it seems foolish and unnecessary. NFTs on the other hand are worth exploring but quite complex if you’re not a tech nerd. I too am in the middle of understanding it myself, but what I do know for certain is this — whatever you think about it now, Blockchains are poised to be a big part of our future. Blockchains are the lifeblood which sustains Bitcoin, NFTs and countless other innovations, and if so many advances stem from a single source, it simply becomes the new normal — just as the internet itself became the lifeblood of the digital revolution, or Oil the lifeblood of the industrial one. We are at a pivotal time in that era staring at its birth square in the face, but so far, the existential complexities of the real world, has made that bold new world, seem just as chaotic.
That leaves us with the stock market. Say what you will about this pandemic, but a lot of companies have made a shit load of money. Some, even “ship-loads” of money. Not hypothetical future earnings, but cold. hard. cash. And owning part of these companies now gives us a personal stake in it. Even if you got a reasonably well performing business of your own, unless it’s an export-oriented, logistics-related, or need-of-the-hour product based firm, I’d wager you didn’t have a better year than any of the ones before, These guys however, made enough for all of us.
We have a problem with our stock market getting a bad rap over the years, but it’s truly troubling to see it being used as a political tool. A well-functioning stock market is essential to the well-being of our economy — we just need to agree on this one point. But making the stock market sound like a common gambling den, only appeals to those who are drawn to that trade. Its a self-fulfilling prophecy that helps no one. It would be better to liken it to a game of chess, where intelligence, patience, and discipline are the winning traits. Any government should understand, that to fix a nation’s problems, its people must be given a decent livelihood, and an honest way of expanding it. Comparing trading to a gambling problem is the exact opposite of that. Nevertheless, despite the myriad efforts to stifle it, the reason stock markets emerge strong while the rest of the world is in shambles, is proof that the system works. Let it be.
There are times to discuss which stocks are worth buying, but this is not it. Monkeys would seldom go wrong darting our market these days. As long as you’re looking at sensible companies with business models that make sense to you in the current context, it doesn’t matter if you put your money on expo, or dipd, or rcl— holding them will increase your investment. Because even if the capital gains don’t titillate you, the dividends alone will keep you satisfied.
Keep believing. Keep investing.