Most of the young investors think that “How I can double the money in due course of time?” Given macro-economic concerns and inflationary pressures, today’s youth has realised that there is no point in putting their hard-earned money in banking products (such as stocks, FDs, etc.). This is because these products are not able to beat inflation. Doubling money is that prospect which everyone wants to achieve, and it is not that difficult to double you investment. While there are numerous ways through which we can double the money in due course of time, everything boils down to time line and risk tolerance. There is no requirement to purchase speculative investments to double the money in due course of time. This can be achieved after carefully balanced portfolio or even after having a one super low-risk bond. However, it is very important to be patient and not in huge rush.
If you plan to invest a certain amount, you can achieve substantial growth which can double the money in due course of time. Therefore, because of the compounding of returns, you can grow your wealth over time. Earning money and then doubling it is something to look forward to.
Several individuals look and analyse ways to invest their capital in a hope to double it or grow it over time. There are situations in which you can double your money in just a few minutes like in a casino or while trading options or futures. That being said, these investments are very risky and you can lose all your capital in just a second.
So are there any legitimate ways through which you can double the money in due course of time or generate a healthy return which should help you maintain your living standards irrespective of the rate of inflation? Yes, there are such investments! I know it seems impossible, but let us look at some real-life examples.
Investing in stocks
Stocks, bonds, and mutual funds are considered as most common investment avenues and these have higher risks in comparison to savings products. That being said, stocks have been classified as an asset class which has offered highest average rate of return. However, there is no guarantee of profits at the time of purchasing them. If the company doesn’t do well or some global uncertainties have impacted their business operations, the price can fall and investors can lose their money. However, there is other side of the story too! There are stocks which have the potential to generate significant returns and can also double the money in due course of time.
- Patel Engineering Limited: Patel Engineering Ltd. was founded in 1949 and has been categorised as a major infrastructure and construction services company situated in India. The company’s experience spans across different sectors of infrastructure industry from dams, tunnels, micro-runnels, hydroelectric projects to real estates and townships. This stock has gone up by ~300% in just 6 months. Yes, you read that right! The stock has proven to be a multibagger one. Do you know that that means? If you would have invested just INR1,00,000 on 25th February 2023, your investment would have grown by ~300% (i.e., by INR3,00,000). Therefore, on 25th August 2023, you could have walked away with INR4,00,000 (INR1,00,000, your initial investment and INR3,00,000, your profit).
Now, this is not the only success story. There are several other stocks which have generated strong returns in a short span of time.
- Precision Camshafts Ltd: This company has been categorised as one of the leading camshaft manufacturers in the world and it manufactures all types of camshafts under 1 roof. The company has established mutually beneficial engagements with several Original Equipment Manufacturers (OEMs) globally. The stock price of the company went up by ~150.6% in just 6 months. Therefore, an initial investment made on 25th February 2023 of INR1,00,000 would have grown by ~150.6% (i.e., INR1,50,600). Therefore, at the end of the day, you would have walked away with INR2,50,600 (i.e., INR1,00,000, your initial investment and INR1,50,600, your profit). The company has a global manufacturing footprint, with strong financial position.
Therefore, there are certain stocks which have delivered strong returns in a very legitimate manner. Everything boils down to timing and your risk appetite.
Now, you’d think that stock investments are quite risky. Well, there are mutual funds which have delivered phenomenal returns in the past.
Investing in mutual funds
- Quant Small-cap Fund: The primary investment objective of this scheme is to generate capital appreciation and offer long-term growth opportunities by making investments in small-cap companies. Given its NAV movement, this mutual fund has generated one-year return of ~209% (as on 10 May, 2021). This means if you would have invested a lumpsum amount of INR1,00,000, your investment would have generated a return of ~INR2,09,000. In comparison to stocks, mutual funds are less risky because of the principle of diversification. Therefore, individuals with lower risk appetite can go for mutual funds.
This is not the only mutual fund which has generated such strong returns.
- ICICI Prudential Commodities Fund: The investment objective of this scheme is to generate long-term capital appreciation through creation of portfolio which is invested mainly in equity and equity-related securities of companies that are engaged in commodity and commodity related sectors. Given its NAV movement, it has generated 1-year return of ~191% (NAV as on May 10, 2021). Therefore, an investment of just INR1,00,000 would have grown by ~191% (i.e., INR1,91,000) to INR2,91,000.
If you think that investing directly in commodities is risky, you can go for mutual funds which have exposure to commodities. Such mutual funds have strong growth potential because of their promising underlying assets.
The greater the expectation of potential return, the greater the risk. One commonly known protection against risk is obviously time. This is what young people have. We know that the stock market can go up or down and there have been instances where this market has gone down for months or years. However, “buy and hold” approach tends to pay-off.