Don’t fear stocks, know why you should invest in stocks

market outlook: Traders wary after 70% market rally from March lows - The  Economic Times

We often hear and talk about the stock market and shares, we discuss the rise and fall in the share market. We are well aware of well settled businessmen who grew out due to stocks. We know success stories coming out of the stock market but we fear investing in it. For many people, there’s a preset image of the stock market which finds the stock market always gaining you money losses. But no, understanding the market properly and investing and trading strategically, in the stock market, always returns you with huge profit. Stock market takes the least time for your money to grow with the least effort.

What is the stock market?

If you are here but do not know about the stock market. Stock market as any market is a mediator between people who want to buy shares and people selling shares. Each company has its share and you want shares of a company, you technically hold a part of the company, though small. In today’s times, all these trading activities are held on the electronic online stock market.

Four reasons you should invest in stock market –

  • Liquidity – The term liquidity is the ease by which you can sell or buy anything and divert your money as per the need. Stock market provides high liquidity as you can trade shares within minutes. Liquidity aids in retracting your money when you need it which is a hassle in other types of investments like property or land.
  • Benefit of compounding – Stocks give you an amazing option where your money keeps growing itself without your aid, it gets Compounding is when you get interest over your principal amount, it gets added to your total money with each cycle. So, with each cycle your principal amount increases and you get a higher interest. In simple words, you get interest for interest. This seems normal but money grows rapidly through compounding when given sufficient time.
  • Unexpected returns – Investing in the stock market needs proper examination of the situation, the company whose share you are buying before investing. But stock is a good old lottery where you can get even four times of what returns you expected. Unlike other investments where returns are fixed and increase slowly with time, stocks are an interesting option to consider.
  • Long term returns – Stocks always bring one profit in long term returns. If you are not investing in stocks just because you are scared of losing your money, then long term trading is the option for you. In long term trading, you buy a stock and can sell it after months or years when you feel you are getting good returns. This technique always works unless you invest in stocks of an already bankrupt company without research. But to much surprise, investing in already bankrupt company shares also have chances to grow and get you good returns.

There are many more reasons to spare your money for investment at especially in stocks and equities. Contact your financial advisor soon and you can get good returns too.

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