Firstly, what is your CAGR expectation when you use the term "decent money".
Secondly, Diversification is a very important concept, without which one won't survive the investing-game. Sure stocks get thrown out of the index. But, you may not have invested more than 3% in each. Then how much do you stand to lose? On the brighter side, several stocks get doubled almost every year. This time IT stocks have done exceedingly well, along with pharma and FMCG.
Finally, you won't make money every year. That is assured too.
Secondly, Diversification is a very important concept, without which one won't survive the investing-game. Sure stocks get thrown out of the index. But, you may not have invested more than 3% in each. Then how much do you stand to lose? On the brighter side, several stocks get doubled almost every year. This time IT stocks have done exceedingly well, along with pharma and FMCG.
Finally, you won't make money every year. That is assured too.
In my earlier query I just gave you an example of aan investment in a matured stock. I did not mean that I will put all my money in one stock.
Let me give you an example.. suppose Infy was growing at 30% earlier and was commanding a PE of 30, so with an EPS of 100 the stock price would be 3000, now suppose growth comes down to 20%, now say EPS increases to 150, but now it commands a 20PE due to reduced growth, so stock price remains around 3000, now suppose the stock matures and grows at 10% and commands a PE of 15 with EPS of 200 so stock price remains at 3000. This is just a hypothetical example of stocks which are in a mature state. Of course stock price will also increase over time but slower than earlier. My doubt is that mature stocks may not give more than the index returns even when bought at low valuations.
On the other hand the index keeps growing over time as new stocks are brought into the index and old stocks go out of it. It seems people make more than decent money by buying stocks before they mature or just when their growth begins.