The article concerns the question – Why Should You Invest In Stock Market? Stock market investments are thought to be a very risky investment. People do not easily put in their money unless and until of course they are willing to take risk. Going by the simple phenomenon of high risk high returns investment in stock market could multiply your earnings exponentially. Bank deposits though are safe investments but they offer meager interest rates and keep your money for years. Stock markets provide you with an opportunity to see your money grow exponentially.
As the market goes your money also goes. Of course there is a risk involved but that risk is what forms the basis of your future earnings. One has the flexibility to liquidate this holding as and when required. There is no compulsion to keep the shares for say n years. In banks, taking the example of fixed deposits the sum is kept for a certain pre-defined number of years. Thus, your money is blocked. You cannot use it in case of emergencies or when required. Stock market investments could be converted to cash anytime.
You are in a way the owner of the organization. Invest in the stock market with a long term perspective. This will help you in minimizing the market risk. By varying your portfolio across a number of industries, one can maximize the profits and minimize the losses. A strategically planned investment objective must be chalked out prior.
One should invest in phases. Never invest your complete amount at one go. It is always advisable that you keep your investment portfolio scattered and diversified. In banks, Government bonds, treasury bills etc. your savings might be safe but the returns are also extremely low. The stock market basically works on the dimension of compounding. Thus, it offers higher returns.
It is always advisable to start early investments in the stock markets. People can take more risks this way. Investing in the stock market, if for a longer term can help the investor to ride through the smooth and rough times of the market. Instead of panicking in the times when markets crash, it is advised to stay with your investments.
Stock market investments are quite flexible. You can sell your shares or buy the new ones as and when you wish. If you see a script not doing well you could easily sell it out to include another one in your portfolio. Also, stock markets investments provide you with the option to take out your money as and when required. Unlike the fixed deposits that keep your money for a fixed period of time there are no compulsions in the stock market.
Suppose an emergency strikes you, you can very conveniently sell your stocks and can arrange for the fund. When the markets are low some people who have cash invest in heavily. The reason for this behavior is that the markets after a downturn do rise. As money starts pouring in and the investors’ sentiments improve the markets also show a positive sign and improve simultaneously.