InvestorQ : What is the meaning of the stability of returns?
Rutuja Nigam made post

What is the meaning of the stability of returns?

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Arti Chavan answered.
2 years ago
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An investor makes any investment with a perspective to earn returns on it, no matter what the time-frame of return is. The market is full of investment options where people have numerous investments to jump in and various strategies they can use to get the expected returns.

If I talk about investment in shares or stock market, this market is full of ups and downs and cannot really ensure what return the investors will receive. It is even possible that the investors get negative returns on their investments and end up being in the loss. So in this market, there is no stability in returns and hence it can go from the desired percentage to any percentage.  One can end up being in super profit or ultimate loss.

Stability here does not mean certainty of returns or a fixed percentage of return over investment, rather it means that the investors will receive returns at a fixed pace, neither too high, neither too low. When return on any investment is stable, that means the investment does not get too much affected by the changes in the market, and hence market volatility does not change the pace at which you’re receiving returns, there can be a slight deviation in your returns but not much. Do not get confused between fixed returns and stable returns, though the risk in both the returns is low, wealth creation differs.

Investing in schemes where there is the stability of returns is better than investing in any market where you’re clueless about the returns you could receive. Since investment in securities where the investor has avoided the effect of negative returns and faced less volatility has higher chances of growth and wealth rather than the one that faces all the market volatility.
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