Why invest in Indian shares?

Best website to learn Indian share market

This website, www.whyShares.Com is a website to learn Indian share market basics and how to start share market investment in India. The website also explains the reasons for investing in Indian stock market and how you can make a fortune for yourself by the time you are ready to retire. Share investment in India in the right shares is a sure way to build up your fortune slowly and steadily.

We have several pages that explain the basics of Indian Stock markets and how to start share market investment in India. The process of registering for a Demat Account and how to buy and sell shares online using Demat Account is explained in detail. The most important thing to know about investing in the share market in India is to find the right Indian shares for long term investment.

Investing in shares good or bad?

Many people are scared of investing in Shares because they think that investing in Shares is like gambling. This is not true at all. Please note that we are talking about investing in shares for long term and not trading in Shares and derivatives, which is a different thing altogether and is explained in our page about Derivative Trading in Futures and Options. It is mostly in Share Trading where people lose fortunes and the stories about lost fortunes in share trading which scares people away from the wise choice of investing in shares. Share trading on margin is for the professionals and this Share trading is bad for beginners in the share market.

The good way to invest in shares is to study the Companies whose shares you are buying into and you are convinced about their potential for long term growth. Also the best way to buy shares is to buy into diversified sectors, like for example equal proportion of your share investments in Auto sector, Banking sector, Pharma sector, FMCG (Fast Moving Consumer Goods), etc.

Advantages of investing in shares in India

The advantages of investing in Shares in India is that long term investment in shares of good Companies in India will appreciate in value more than the value of Bank deposits or investments in Properties or in Gold. how to make money in indian share market Investment in shares are for long term benefits and will serve as a very good source of income when you retire. We have several pages explaining the ins and outs of Indian Share Market and how to find the best Indian Companies to invest in.

The important to understand about the share market in India is that the share value of good companies keep on rising as the years go by. There are instances when the stock market crashes, but these crashes are only temporary and the stock market index will start rising again and become more valuable than before the crash.

To illustrate this we have below graphs of the actual values of the best known stock market gauge in India, the BSE SENSEX (Bombay Stock Exchange Sensitive Index). The BSE SENSEX index is a daily value obtained by adding the daily share price of 30 best companies in India who are judged to be well managed and stable (some companies share values are given more weightage).

We have below two graph charts of the BSE SENSEX index values, the first one on top is showing the BSE SENSEX index values from 2010 till 2015 May. You can see the jump in the SENSEX index during 2015 when it almost touched 30,000. The second graph of the BSE SENSEX shows the historical BSE SENSEX index values from 1991 till 2011 and shows when the big crashes of BSE SENEX happened and the reason for the crash.

BSE SENSEX index values 2011 to May 2015
BSE Sensex 1991 to 2011: Crash Report

With a stable Government in India, the SENSEX reached its historical high of 30,024.74 during Intraday trading on Wednesday, 4th March, 2015, but later declined. Going forward the Indian economy will get better and the share market BSE SENEX will zoom past 30,000.

The lesson learnt from looking at the above BSE SENSEX graph or charts is that there are periodic crashes in the stock market, which at the time of the crash is catastrophic, and makes world headlines. This makes many people to think that investing in stock or share market is very risky and better avoided. After the stock markets crash or bubble burst, it starts rising again and within a year or so, will surpass the highest value prior to the crash. This gradual rise in share prices is not world headlines like when there is a fall. So there is always this tendency in news reporting to shout about negative news, but is silent when the times are good.

The Share Market in India will always rise and surpass the highest values that were prevalent before any crash.

Biggest stock market crashes in India

In the map above 'BSE Sensex 1991 to 2011: Crash Report' you can see all the major crashes that happened in the BSE SENSEX over a period of 20 years from the year 1991 to 2011. The crashes never stopped the upward journey of the Indian Share Market. In hind sight, these are small dips in the constant rise of the Indian share market values over the years, but at the time the dip happened, it was a major crash of the Indian Stock market which hit headlines in all news channels and newspapers in India.

The first of the biggest stock market crashes in India happened in 1992, when the Big Bull of those days, Mr. Harshad Mehta, unleashed the biggest scam of all in the BSE SENSEX's short history till then. In the year 1992 the SENSEX more than doubled from around 2,000 in January 1992 to a high of 4,462 and crashed to a low of 2,529 in August, 1992. It was a traumatic experience at that time for those who had invested in the stock market, this author included. But as can be seen from the graph above and table below, the SENSEX recovered this blow and continued to rise over the years.

The next big crisis of the SENSEX was in 2008 when the world markets crashed. In 2008 the high and low of the BSE SENSEX was 21,206 and 7,697. This was a very critical year for the economies all over the world, but as you can see the SENSEX recovered even from this global crisis, and is today in 2015 at its highest peak hovering near 30,000. You can expect the SENSEX to continue to rise over the years. Those who lose money in the share market are those on the lookout for a quick buck, but the slow and steady investors in the share or stock market always make money.

BSE SENSEX index history, values from 1991 to 2014

The table below shows the Opening and closing value of the BSE SENSEX for each year starting from 1991 till today in 2015. The high and low values of each year is also given. There is a steady rise in the average value of the top shares in India represented by the BSE SENSEX.

BSE SENSEX index history 1991 to 2015

Other pages in our website www.WhyShares.com

Below are links to all the pages on this website and we hope you will make full use of all the great information about how to invest in Shares in India. So please Enjoy our website WhyShares.com