You might have heard people saying that the Stock market has given a better result and return over the last many years. Return of investment offered by the stock market is better than the general interest rates in the market. The stock market is seen to be cyclic as the bullish market is followed by the bearish market and again bullish market. This is clearly observed that the bullish market is followed by a bearish market for 20 percent of the time. Here, the length of the period can differ but on an average, the bull market ends for about 4 years and bearish market ends for about 1 year. Therefore if the investor invests for a short-term and invests before the bearish market the investor ends up in losing money. On the other hand, if the investor stays invested the investment will grow and he will end up in getting good returns.
Therefore the way to become a millionaire over the time is to start investing at the beginning of the life and continues investment at regular intervals. Your investment will grow over the years and the person is likely to become a millionaire at the time of his retirement. Here results are seen to be slow but they will give a good positive output after many years of investment. The stock market will ultimately grow and will give positive returns as the years will pass. When a regular investment like 5000 Rs per month is invested the amount will add up and the total amount after many years will be a huge sum. It is truly based on the concept of time value of money.
It is said that the true strategy is to invest in a diversified portfolio. You must not take the risk to invest in only one stock. Here, the risks are higher. You must invest in different stocks of different sectors. You may also take the advice of the financial institutions to provide the equity tips to select the stocks which will turn profitable in future.