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Why should we make investment in stock market?

Many people nowadays start investing in the stock market. But still many are afraid to take steps as they have always heard how someone known has lost almost all his wealth in the stock market!

But now we really need to break this barrier.

Why should we make an investment in the stock market?

‘Stock market investment is a gambling’ – this myth still alive. That’s a big reason that why even less than 2% population of India is actively investing in the stock market.

1. High potential return:

Stock investment has the ability to produce a high potential return through capital appreciation and dividends or interest income.

Capital appreciation is the value of the stock when we bought and the current market price.

The dividend is a portion of a company’s earnings that is paid out to shareholders instead of reinvesting in the business.

2. To make a balance with inflation:

Inflation is a sustained increase in the price level of goods and services where the value of purchasing power of money is decreasing. Inflation occurs in an economy when there is an expansion of the total amount of money. Overall, Inflation is not desirable.
Let us have an example. Suppose in your savings account you have Rs 6 lakhs. So you planned to buy your dream car which is also worth Rs 6 lakhs currently. Then you change your mind and decide to buy the car next year as you keeping your money in the saving account. The bank provides you an interest of 5% pa. What is the scenario in the next year? Your account balance is now 6.3 lakhs.

Then you went to buy the car. But boom! The price of that car has now increased to Rs 6.5 lakhs. The car, which you could have easily bought last year, is now not affordable to you. That is inflation.
The inflation in India for the last few years has been around 4-5% where Interest rate in the savings account is around 4-6% per annum. Hence, only saving accounts cannot beat the inflation. We need to invest our money intelligently. And stock exchange is that the best place for intelligent investors.

If you invest in a stock of a renowned company, you can easily earn a return of between 15-25% depending on how good the stock is and how much time you invested in the selected stock. Therefore, investment is the stock exchange may be a nice possibility if you wish to stay pace with the rising inflation.

3. Invest with little fund:

Yes! Anyone can start an investment with a very fund as 10k! In fact, there are a number of good stocks available in the market whose price is below Rs 100. So, anyone can invest a small amount of money and start getting good returns. See, this opportunity is not available in other forms of investments like gold or real estate.

4. Let your money work for you:

You’ve worked hard to make money, now put it to work. Let invest your money in a stock belongs to good companies. Now, keep monitoring. The money will grow itself as the company prospers. In this way, you can make your money work for you.

5. You do not need a genius brain:

Do not have to be a genius to invest and earn from equities. Everyone can get advantage from investing in the stock market. But of course, have to be as reasonable as possible and need powerful control over your emotions
Investing in companies with growing businesses and transparent management become a steady income source. Unlike starting a business or start-ups, when you start investing in the stock market, it requires only a little money, simple high school math, time and most importantly, your proper interest. A reasonable person can be young or old. You do not need to be a mastermind to invest in the stock market.

6. Stock investing is a lot easier now:

Everyone is becoming more internet savvy and computer friendly nowadays. Computers, smartphones with internet and social media are becoming staples of everyday life. According to a research, in 2015, almost half of the world’s population was using the internet.

Anybody with little validation can open an online brokerage account in any good stockbroking website. There are lots of options available in the market. With these financial websites and apps you can buy or sell stocks online, can fund your account, can withdraw your funds and can check your account wherever you are. Is not great!

There are a number of examples of renowned and common stocks. These stocks returned more than hundred percent over the last few years. Just need to look around and start investing in the online brokerage account.

7. Best secondary source of income:

We should always have a backup. Stock investment help to create this additional source of income. Most of the people are entirely busy with their daily job or business. For those people, Investing in the stock market can be their second source of income. Through the worth appreciation and dividends, they will steady grow extra financial gain.

That’s why folks, got to begin investing in the Stock Market.

Please leave your queries in the comment section and let us know your views regarding this article.

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