Then there's the case of investing in highly leveraged companies. Even here, the
base rate is pretty low. But people still tend to invest in them on the premise
that they will make huge returns.
At the other end of the spectrum are investments that have pretty high base rates. Take equities for example. History has shown that equities tend to have the best long term returns of any asset classes. But people still fall for the gloom, boom and doom stories and shun equities.
Then there are certain industries like FMCG, IT and pharma where again base rates has been high. Thus, it would do your portfolio no harm if majority of your portfolio is comprised of companies from these sectors rather than sectors like airlines or textiles that have pretty poor base rates.
Thus, before getting carried away by any sales pitch, it will help if you take into consideration the long term base rate of the stock under discussion. Investing where the base rate is in our favour is a huge long term advantage to have we believe.
At the other end of the spectrum are investments that have pretty high base rates. Take equities for example. History has shown that equities tend to have the best long term returns of any asset classes. But people still fall for the gloom, boom and doom stories and shun equities.
Then there are certain industries like FMCG, IT and pharma where again base rates has been high. Thus, it would do your portfolio no harm if majority of your portfolio is comprised of companies from these sectors rather than sectors like airlines or textiles that have pretty poor base rates.
Thus, before getting carried away by any sales pitch, it will help if you take into consideration the long term base rate of the stock under discussion. Investing where the base rate is in our favour is a huge long term advantage to have we believe.
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