Tips for getting higher returns from Stock Market | Motilal Oswal

How can I double my equity while trading in stock market

The desire to double one's money stems from a deep component of our investor psychology—the risk-takers in us who want a fast buck. However, two connected factors must be addressed while making such efforts: time and danger. This relates to both your risk tolerance and time horizon, as well as the characteristics of the investment itself, such as the time it may take to double, which is a consequence of the investment's riskiness.

 

  • Risk Tolerance and Time Horizon

Your investing time horizon is a critical factor in determining how much investment risk you can take on, and it is mostly determined by your age and financial goals. A young professional, for example, is likely to have a lengthy investing horizon, which allows them to take on a large amount of risk since time is on their side when it comes to recovering from losses. But what if they're saving for a home purchase in the next year? In such a situation, their risk tolerance will be low, since they cannot afford to lose a significant amount of money in the event of a market drop, which would threaten their main investment goal of purchasing a home.

  • How long does it take to double one's money?

The Rule of 72 is a well-known formula for determining how long it will take for an investment to double in value if it grows at a rate of 8% per year. Simply multiply 72 by your estimated yearly return. The number of years it will take to double your money is the outcome. Doubling your money is a realistic objective that most investors may aim for, and it is not as intimidating as it may seem to a beginner investor.

  • The Traditional Approach - That advertising isn't too far off the mark when it comes to the most conventional method of doubling your money. Investing in a good, balanced portfolio that is diversified between investment-grade bonds and blue-chip companies is a great strategy to double your money in a reasonable length of time.
  • The Opposite Approach - Even the most conservative investor understands that there comes a moment when you must purchase, not because everyone else is doing so, but because everyone else is selling. Nobody is advising you to invest in rubbish stocks. The idea is that strong assets may get oversold at times, which creates a purchasing opportunity for investors who have done their due diligence. The price-to-earnings ratio and book value are two valuation indicators used to determine if a stock is oversold. For both the broad markets and individual sectors, both measurements have well-established historical standards. Smart investors scent a chance to double their money when firms fall substantially below these historical norms for superficial or structural causes.
    • The Way of Speculation - Aggressive tactics including options, margin trading, penny stocks, and, more recently, cryptocurrencies, may be the quickest way to super-size the nest egg for those with a high risk tolerance and some investing cash that they can afford to lose. Everyone has the ability to rapidly deplete a savings account. Shares equity may be used to speculate on the stock of any firm. Options may boost the success of a portfolio for many investors, particularly those who have their finger on the pulse of a given sector.
  • What is the one most effective method for doubling your money?


Your risk tolerance, investing time horizon, and personal preferences all play a role. Most individuals benefit from a balanced strategy that includes investing in a diverse mix of shareholder equities and bonds. Those with a larger risk appetite, on the other hand, may want to invest in more speculative assets while others may seek to double their money via equity brokers.

Related Articles: Follow these 5 Expert Advices to Get Started with Investing | 4 Investment Mistakes New Stock Market Players Must Avoid at All Cost | 5 Rules Every New Investor Must Know Before Investing |  10 common mistakes made by SIP investors | 4 Smart Must-Follow Investment Tips for Beginners in India

  • Open your FREE Demat Account in 5 Minutes
+91|
Select State
Select City
By submitting your details, you are authorising us to call you or send promotional communication even though you may be registered under DND
angle-up