Returns from Stocks:
Normally, it takes 10years for seeing the magic of compounding but the rationale for this is that we are assuming growth of 10–12% annually.
There are some stocks that can duck this norm either compound faster
Example 1: Atul Ltd (Chemicals)
If an investor had bought 20 stocks for INR ~37,600 in August 2016(5 years back), these stocks would be worth INR 1,81,736 in August 2021. (Dividends are not included)
Stock Return of 382.93%
Example 2: Hindustan Unilever (FMCG)
If an investor had bought 20 stocks for INR ~17,261 in August 2016(5 years back), these stocks would be worth INR 47430 in August 2021 (Dividends are not included)
Stock Return of ~175%
Strategy for Stock Investing
So the point is to buy good stocks and sit tight. The principal will bring in dividends and appreciation in value.
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