Long term profits vs short term gains

Every now and then we get this input that if you stay in stock markets for sufficiently long period, you will surly get good returns. But what is a sufficiently long period ? 2 years , 5 years , 15 years.

Anybody is bound to loose patience if the investments are not resulting into any kind of positive returns for months & years.

On the other hand, my expenses are on monthly basis. I need to pay my rent every month , need to buy groceries every month , need to pay school fee every month , need to pay my EMIs every month.

In such  a scenario, how will my investments in stock markets help me in my day to day living ?

If my objective is long term returns only , Should I invest only that much of money which I save after paying all the bills? In this case also, I don’t know whether these investments will really support me at the time of need or not. If I want to en-cash them after 2 years, what are the chances that they will be giving me positive returns. So, may be I am better off with a safe bank deposit in such  a scenario.

But , what if I want to take benefit of higher returns in stock markets ?

There must be a way , wherein my investments can capture long term benefits as well as pay me something on monthly basis also .( You do not know which company’s will survive 15 years from now).  Is this possible ?

Yes, this is possible. You can set up a trade wherein you are taking long term benefits of markets with short term gains. Short term gains are like small rent which you are capturing from the long term investment you have made for capital gains. So , even if in long term you are not getting huge returns, the overall returns look very attractive with small small short term monthly returns you have already pocketed. Additionally , these monthly returns are supporting me in my day to day living also.

Achieving this balance of monthly returns vis a vis long term returns is a sure shot way of creating wealth through stock markets. And let me tell you, its not rocket science. It just requires proper understanding of tools available in the markets such as stocks, index , futures & options. We need to combine our trades judiciously in these segments to achieve these goals.

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