Bull or Bear, Long-Term Investment is always the Winner (Exclusive SS Pro Analysis)

Thu, Sep 13, 2018 5:14 PM on Exclusive, SS Pro,

~Rishab Agrawal

In the last five years, NEPSE has seen a run of bull market as well as bear market. Over this period the prices of stocks of all the companies have fluctuated immensely creating new highs and lows in terms of stock prices. This volatility affects the investors’ value of investment and manipulates their buy/sell decisions. For instant gains, traders tend to buy when the market is falling and sell when the market is gaining. But if we overlook the volatility of the market and think about the growth of the investment in the longer run, will it be beneficial? Will our investment grow despite the volatility of the market? The answer is yes, it will.

Using the recently launched software SS Pro, we can calculate the growth of our investment as per the latest data. SS Pro’s Investment Worth shows the present value of investment that was invested on some past date in a particular company. All we have to do is feed in the name of company, value of the investment and date of the investment. In just one click, SS Pro will calculate the present value of the investment and show the complete growth from the time of investment till the present day. This calculation also includes all the bonus shares and cash dividend received since the day of investment. Further, it assumes that the right shares issues by the company in which investment was made, was applied for by the investor. In this way, complete growth of the investment can be known leaving no stone unturned. Here is an exhibit of the investment worth calculator:

(Picture taken from SSPro)

Coming back to the issue of investment in the long run, we have assumed that an investor invested a sum of Rs.100,000 in each of the following companies on 10th September, 2013. Let us see how much the investment has grown in a period of five years and what is the present value of the investment.

Name

Symbol

LTP on 10/09/2013

Today's Worth

Annual Growth

LTP on 13/09/2018

Sanima Bank Limited

SANIMA

258

448,493.63

34.94%

342

Citizens Bank

CZBIL

258

293,075.07

23.95%

251

Siddhartha Bank Limited

SBL

382

325,253.22

26.55%

331

Sunrise Bank Limited

SRBL

230

299,448.79

24.48%

240

Prime Commercial Bank

PCBL

301

307,100.11

25.11%

331

Laxmi Bank Limited

LBL

352

276,468.11

22.51%

258

Machhapuchchhre Bank Limited

MBL

223

279,517.05

22.78%

229

Agricultural Development Bank

ADBL

260

346,207.40

28.14%

359

Muktinath Bikas Bank

MNBBL

370

923,574.13

55.84%

414

Shine Resunga Development Bank

SHINE

195

441,317.69

34.48%

286

United Finance Limited

UFL

154

246,404.60

19.73%

168

Hathway Finance

HATH

57

252,631.58

36.00%

122

Deprosc Laghubitta

DDBL

599

814,887.96

52.00%

661

Laxmi Laghubitta

LLBS

307

760,032.57

67.81%

985

Surya Life Insurance

SLICL

205

546,634.73

40.35%

531

Asian Life Insurance

ALICL

399

358,520.94

29.02%

599

Prudential Insurance

PICL

255

1,499,357.23

71.66%

765

NLG Insurance Company

NLG

466

437,908.67

34.28%

851

We assumed the date of 10th September, 2013 because since that date, NEPSE has seen both- bullish trends as well as bearish trends and the prices of the shares have fluctuated to new highs and lows. From the table above, we can see that investment of Rs.1 Lakh in each of these companies has resulted in annual return of more than 20% which is more than the average rate on fixed deposits provided by commercial banks in the last 5 years. This also shows that despite a volatile market an investor can realize higher returns in the longer run. The only thing to be careful about before investing is quality and prospects of the company. If the company has satisfactory past record and strong future plans, the investor can invest in the company and turn a blind eye towards the volatility of the price of share for a couple of years. However, being updated about news regarding the invested company will be in the best interest of the investors. Patience is key for good returns out of investments.

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