How To Invest Rs 10,000 In India for High Returns? Investing is the best way to grow your money. Gone are the days when people kept their fortune (gold) buried below their land. Everyone is now interested in making more money with their investments.
“How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case.” – Robert G. Allen
However, when I look around, very few people know how to invest their money intelligently. Many are even not aware of the investment options available for them in India. So, today I am going to suggest the best way on how to invest Rs 10,000 in India for maximum returns. Therefore, be with me for the next 8-10 minutes to start your journey of financial investment as a successful investor.
There are a number of investment options available in India to invest Rs 10,000 or more. Here are the few options and the expected average returns in a year duration:
- Savings: 4–6% per year
- Fixed Deposit: 6–8% per year
- Mutual funds: 10–18% per year
- Stock Market: 15–25% per year
Besides, other investment options available in India are Real estates, gold, silver, currencies, commodities like petroleum etc. However, for an investment of Rs 10,000; these are little out of scope.
So, How To Invest Rs 10,000 In India for High Returns? Among all the options mentioned above, Investment in the Stock market and Real Estate are the ones that has consistently out-performed all the other investment options in long duration. However, investing in real estate won’t be possible with an amount of Rs 10,000 until you take a lot of credits.
Hence, Stock market is the best option available for investment of Rs 10,000 to get maximum returns.
Here is a graphical comparison of returns on Stocks, bonds, gold etc for a period of over 200 years.
Note: Although the above graph doesn’t show returns from Indian stock market, however, stocks (in general) follow the same trend compared to other investment options all over the world. Please ignore the figures in the chart.
Now. let us analyze the past of Indian stock market and find out -how much return you might have got, if you had invested Rs 10.000 in some good famous companies, a few years ago.
Eicher Motors (over 80 times returns in last 10 years)
Products: Royal Enfield, Eicher Trucks etc- If you had invested Rs 10,000 in Eicher motors 10 years back, then currently your return would have been over Rs 8,00,000 i.e. 8 lakhs. I wish my dad had bought the stocks of Eicher motors instead of Royal Enfield ‘bullet’ bike 10 years ago 🙁
Page Industries (over 50 times return in last 10 years)
Products: Innerwear & Leisurewear (JOCKEY) etc- If you had invested Rs 10,000 in Page Industries 10 years back, currently you would have been sitting of a huge pile of over Rs 5,00,000 i.e 5 lakhs. Wish people had paid more attention to their underwears :p
Also Read: How to follow Stock Market!
MRF (Over 17 times return in last 10 years)
Product: Tyres- If you had invested Rs 10,000 in MRF 10 years ago, you would have got a handsome return of Rs 1,70,000 i.e. Rs 1.7 lakhs now. Just if the bike servicing guy had noticed how many people are using MRF tyres and had bought few stocks of MRF Tyres then, he would have been a rich happy man by now.
If you want to get in-depth knowledge about Indian Stock Market, I will highly recommend you to buy this book: How to avoid loss and earn consistently in the stock market by Prasenjit Paul
Symphony (Over 12 times return in last 5 Years)
Products: Domestic air coolers, industrial air coolers, and water heaters -If you had bought the stocks of SYMPHONY worth Rs 10,000 just 5 years ago, you would have got a return of over 1,20,000 i.e. 1.2 lakhs now. Huh, I enjoyed the air cooler but ignored the company 5 years back. My bad 🙁
Eicher Motors, Page Industries, MRF, Symphony; all are famous and common companies in the Indian market, which every Indian knew about. Most of the people have directly or indirectly used their products. Further, we can also notice that all these multi-bagger companies (companies which have given multiple time returns) have given great product/service to their customers, which resulted in constant sales and growth.
How To Invest Rs 10,000 In India in Stock Market?
Here are few tips on how to invest Rs 10,000 in India in stocks to get maximum returns:
Do the research carefully:
Invest in the company, not the stock. If the company is doing great, the stock will also perform well. Overall, research the company carefully before buying a stock. Understand the company first. Learn about its product and services. Study the company’s fundamentals. If you want to read more about how to select a stock, you can find it here: How To Select A Stock To Invest In Indian Stock Market For Consistent Returns?
Invest in just one stock:
Everywhere there is a hullabaloo about diversification while investing- ‘Do not put all your eggs in the same basket’. However, in reality, the concept is different if we expect maximum returns from small investments. Do not diversify your portfolio when you are investing Rs 10,000. Instead, invest in just one great stock. Diversification is used when you are investing a huge amount of money like Rs 50k or above. It’s the big bets only which can help you to get great returns. Diversification kills the profit when the investment in small.
- Let’s understand this with an example. Suppose, you invested Rs 10,000 in a good stock. The stock gave a return of +50% percent in a year. Then, the total return amount will be Rs 15,000. Now, let us assume another scenario in which you invested Rs 10,000 in 3 stocks. The return on the stocks after a year are +10%, +50%, and +15%. The overall return amount will be Rs 12,500 (+25%). All the three stocks cannot give similar returns and one of them might be most fundamentally strong. If only you had invested in the most fundamentally strong among the three, you would have been able to get a double return (from 25% to 50%) on your investment.
- In addition, there is not much to lose for small investment like Rs 10,000. People diversify their portfolio so that they won’t lost lakhs of rupees (and become bankrupt) if their investment failed. However, if you are planning to invest just Rs 10,000; then the reason for investment must be that you have extra savings and you want to get a good return on the investment. In such cases, go for a big sure shot.
Invest in what you know:
You don’t need to find an unknown hidden stock to get multiple returns. There are a number of common well-known stocks (Eicher motors, Symphony, Page Industries, MRF etc) which have given multiple times returns in the past and will give in the future. Look for a growing company around you. Study if it’s listed on the stock exchange. Learn the fundamentals of those stocks. And if they are fundamentally healthy, invest in the stocks. This is the effective way to find a multi-bagger, which every common man can easily find.
This concept was introduced by the legendary fund manager Peter lynch in his best selling book ‘ONE UP ON THE WALL STREET’.
Invest in Mid-caps:
These companies have the potential to become a large-cap company in the long term frame. They have a high growth rate compared to the large caps which have already reached a saturation and the chances of giving multiple time returns are highly unlikely. In addition, Mid-cap companies have the good capital to stay out of debt and live a long life. A good growth mid-cap stock can easily become a multi-bagger.
Few people advice to buy penny stock or the small-cap stocks for getting high returns. However, for the small caps, the chances of the company growing broke is little high. Many small-cap companies are also not able to sustain in harsh economic conditions which is sure to come once or twice in the long-term period. Therefore, investing in small-cap companies has more risk than reward.
That’s all. I hope this post ‘How to invest Rs 10,000 in India for maximum returns’ is useful to the readers. If you want to read more about stock market investment, you can check out this post: 10 Reasons To Start Investing In Stock Market
In addition, do comment below if you have any doubts or suggestions on how to invest Rs 10,000 in India in the stock market. I will be happy to receive your feedback. #HappyInvesting
If you are new to stocks and confused where to start, here’s an amazing online course for the newbie investors: INVESTING IN STOCKS- THE COMPLETE COURSE FOR BEGINNERS. Enroll now and start your stock market journey today!