When newbie investor Rahul lost 50% of his capital after a market correction, he attributed it to his bad luck. Not ready to give up Rahul plowed in additional funds to make a fresh start. However this time again he was unsuccessful.
One day he came across an online ad about an astrology service explaining the role of astrology in the stock market and how astrology can change one’s luck in the stock market. In a final attempt to succeed in the stock market, Rahul thought of giving it a try. The online astrology service charged him Rs. 10,000 in return for predictions based on astrology for a period of 6 months.
However, nothing changed for Rahul. He was still making losses. Frustrated Rahul quit investing in the stock market altogether without understanding the real reason for his losses; investing in random stocks, trending stocks, investing based on generic stock market tips, and intraday trading.
Like Rahul, many investors attribute their failure in the stock market to their bad luck or misfortune and look at exploring the role of astrology in the stock market for quick gains.
In this article let’s dispel the myths about the role of astrology in the stock market and understand the practical way for success in the stock market.
According to Britannica, astrology is defined as a type of divination that involves the forecasting of earthly and human events through the observation and interpretation of the fixed stars, the Sun, the Moon, and the planets.
Further, it is believed that a thorough understanding of the influence of the planets and stars allows those with thorough knowledge of astrology predict the future. Historically astrology has been always considered a science throughout its history, however over the last few centuries, modern science has opposed the theories of astrology.
Role of astrology in stock market success is still unproven
While there have been many claims and counter-claims regarding the actual effectiveness in the role of astrology in stock market, there is no actual evidence to prove it.
The majority of investors lose money in the stock market due to haphazard investing methods including trying to catch the market highs and lows, investing based on stock market tips received from generic sources, intraday trading, and investing in fundamentally weak stocks.
In the short term, stock prices and stock markets are subject to fluctuations. These fluctuations may be caused by numerous reasons such as political, global, or economic instability. Those who believe in astrology may attribute these political, global, or economic instability to unfavorable movements of planets. While they may or may not be right nobody can accurately predict when the instability will end or the direction of the markets in the near-term.
On the other hand, investing in fundamentally sound stocks after detailed research for the long term is a proven way for success in the stock market. Markets generally tend to stable over a long-term period and generate high returns. Historically returns of equity investments have outclassed all other asset classes including real estate and gold in the long term.
Here are some real examples of how long-term investment in fundamentally sound stocks have created wealth in the stock market.
If one had invested Rs. 10,000 in the stock of HDFC Bank in the year 2000, the worth of the investment today would be approximately Rs. 4,00,000 today.
If one had invested Rs. 10,000 in the stock of Reliance Industries in the year 2000, the total value of the investment would be approximately Rs. 4,50,000 today.
If one had invested Rs. 10,000 in the stock of IT giant TCS in the year 2000, the total value of the investment would be approximately Rs. 5,50,000 today.
If one had invested Rs. 10,000 in the stock of MRF in the year 2000, the total value of the investment would be approximately Rs. 9,00,000 today.
The actual returns would be much higher if we also take into consideration the numerous dividends and bonus shares issued by these companies.
If you look at the above examples, you can see that all of the above stocks belong to different sectors. HDFC Bank belongs to the banking sector while Reliance Industries belongs to the oil and petrochemicals industry. TCS belongs to the Information Technology sector while MRF belongs to the tyre industry.
What’s common among these stocks? They are market leaders in their respective segments with visionary management and strong financial performance.
These are just 4 examples. There are countless other examples of fundamental stocks that have handsomely rewarded patient investors.
Research & Ranking’s model portfolio has delivered a whopping 429% since inception creating huge wealth for patient investors.
This phenomenal wealth creation is a result of careful stock selection based on in-depth-research by our team of research experts with several years of experience.
Now that you know the real secret of wealth creation from the stock market, the big question is ‘Do you still need astrology to predict the stock market’?
While the role of astrology in the stock market is highly doubtful, fundamental investing for the long term is a proven way to create wealth. An apt quote for the situation by William Shakespeare is “The fault, dear Brutus, is not in our stars, but in ourselves”
Read more: How Long-term investing helps create life-changing wealth – TOI.