Advantages of Investing in Stocks

Main Objective of Investing in Share Market

  • To meet individual financial goals
  • Since earning and saving is insufficient during inflation, investing is the way to go
  • Investments are important to meet the price hike during inflation
  • Stock markets are the most viable ventures as they come with several monetary benefits

Advantages of Investing in Stocks

There are various advantages of investing in stocks. Anyone can buy stocks and invest in them provided they have a proper trading account and a sense of the market – speculative ability. It grows with time, but it is a skill acquired through a thorough sense of market influencing factors. Who knew that even political elections could affect the stock market and the share market investment in many countries! Indeed, they do. Let us touch base on the various advantages of investing in the stock market, as listed below.

(i) Higher liquidity

The two stalwart stock market exchanges, namely the BSE or the Bombay stock exchange and the NSE or the National Stock exchange are the sculptors of the Indian stock market and share market investments where companies trade their shares. They can continue trading on either one of these exchanges or both at the same time. Since the average volume of the trade is high every day, investors are provided with a high level of liquidity which makes it viable for them to buy or sell any product on these exchanges.

(ii) Versatility

Financial instruments like shares, bonds, mutual funds and derivatives are offered on the stock market that provide the investors with the choice of a wide range of products to invest their money in. The flexibility of choice that is provided mitigates the risks beneficially that usually comes when we buy stocks in the stock market. This happens due to the various portfolios in which one can invest.

(iii) Higher returns in short period

Investors who invest in stock make greater returns within a short span of time unlike bonds and fixed deposits which take a long time to give adequate returns. Returns of share market investments and the consequent risks are mitigated with carefully done research, correct trade plans, and being diligent when we buy stocks.

(iv) Get ownership and right to vote

One can very well dub themselves as an ‘owner’ just by acquiring a unit of shares in any company which gives them the right to offer their endowment in the form of strategy and business and one can even cast their vote during any decision-making process – although it might seem like a stretch, but during certain circumstances, investors and share-holders have averted companies from taking decisions that are averse to their interests.

(v) Convenience

Stock exchanges are now accessible through digital platforms making it more convenient for investors to buy stocks and sell them in the stock market with a few swipes and taps on their smartphone. Even brokers offer their services, just because it has become more convenient to access this platform in the comfort of their spaces. If one wants to hold several products of their portfolio in a single platform, they can do so by opening a demat account.

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