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The power of holding good stock in long term.


Have you ever considered that your bank account is getting 13,08,000 rupees per year without doing nothing? Yes, you read well. Yes, this is possible.

In this post, we are going to discuss how a knowledgeable investor can earn 13,08,000 rupees per annum by purchasing good company's stock at a decent price and keeping it with him for a long period of time.


Now, let's do the analysis of the bonuses and splits given by Infosys.

1993: 100 shares
1994: 200 shares (1: 1 bonus on 30/06/1994)
1997: 400 shares (1: 1 bonus on 18/06/1997)
1999: 800 shares (1: 1 bonus on 25/01/1999)
1999: 1,600 shares (2: 1 divided by 30/11/1999)
2004: 6,400 shares (13/4/2004 to 3: 1 bonus)
2006: 12,800 shares (1: 1 bonus on 14/4/2006)
2014: 25,600 shares (1: 1 bonus on 2014/2014)
2015: 51,200 shares (1: 1 bonus on 24/4/2015)
2018: 10,2400 shares (1:1 bonus on 09/04/2018)

Let's assume that you bought 100 shares of Infosys in 1993.

Your initial investment will cost you 100 shares × 95 = 9500

Today, the market price of Infosys share is 620.

Net admirable value = 102400 × 620 = 6,34,88,000

Your small investment of Rs 9,500 in 1993 is would now 6.34 crore today.

In addition, Infosys has given dividends to investors in the last 25 years. Let's calculate the dividend given by the company in the last two years.

For the last two years, Infosys announces annual dividend to shareholders.

2016 : Rs. 24.26
2017 : Rs. 25.56

Believe that you would have bought 100 shares in 1993, which would be converted to today's  102400 shares.

Now, we calculate the annual dividend.

Dividend (2017) = 25.56 * 51,200 = 13,08,672

Dividend of Rs 13,08,672 in just one year.

Even if you do not sell your shares, and you keep those stocks with you, you can still enjoy the dividends given by the company throughout the life. Apart from this, your capital will continue to grow and it will also be appreciated. This is a great example to show you how beneficial it is to hold a good company's stock for a long time.

Besides Infosys, there are many companies in the Indian stock market which give superior return to investors over the past several decades. Absolutely, you can also create wealth in a wonderful way if you buy stocks of fine companies at a decent price and hold them patiently for a longer period. Although value investments may not be beneficial for a short period, but in the long run, it certainly provides enjoyable benefits. A patient investor always earns decent return on his investment in the long run.
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Comments

  1. Unknown23 November 2018 at 01:19

    This is truly amazing .. But we need to give enough time to mature our investment.. And second one is to find good company for investing.

    ReplyDelete
  2. Unknown23 November 2018 at 22:14

    This post is like inspiration to us .. the value of long term time frame is absolutely unmatchable..keep it up..

    ReplyDelete
  3. Unknown7 December 2018 at 10:28

    I would like to add some more name like symphony, Eicher motor, escorts limited, wipro these companies give handsome return to the investors over the past few years..

    ReplyDelete

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