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Why Should I Invest In The Stock Market

Posted on 2019-05-15 in WEALTH NOTE RESEARCH

Whenever we try to talk about the stock market, the common advice we get is “don't ever try investing in the stock market. It is nothing but gambling, and nobody has built wealth out of it.” This outlandish idea about the stock market is stopping us from taking a step towards stock investing. We have been brainwashed to such an extent that we are ignoring the most lucrative option of building wealth. No wonder, we continue to struggle in meeting our financial goals. Thanks to awareness created by financial education, we can now understand why we should invest in the stock market.

The best way to beat inflation

We all have to take the brunt of inflation that increases the prices of goods and services every year. This market condition takes away our purchasing power and disrupts our monthly budget. Paying more for the same thing than what we did a year ago reduces our savings. The interest on savings and fixed deposit also fails in meeting this state of the economy. 

Take this real-life example, banks pay 4 to 6 perfect interest on saving account and 5 to 6 percent on fixed deposits, which after GST and other deductions comes to 4 percent. If the inflation rate for the current year is 6%, your returns are minus 2%. Hence, the only way to beat inflation is by investing in the stock market. With a little research on stock market investment and guidance from a professional financial advisor, you can easily earn around 10 to 25% returns on your investment. 

Ideal opportunity to meet financial goals

We all set financial goals for a comfortable life after retirement, for children's education and marriage, and for purchasing a home. To meet these goals, we save money in the bank and the post office. Some even keep cash in cupboards, containers, trunks, or safe boxes. Being driven by the idea of saving, we inadvertently create idle money. We fail to understand that saving doesn't grow money, but investing. If money doesn't grow, we won't be able to meet our future needs. Moreover, the value of money falls with the passing time. Even if you have a saving of 10 lakh now, inflation will bring down its value to 7 after 10 years. So the money that is idle in your bank account, post-office account, and cash at home will do no good for your future. Therefore, invest your money in the stock market and let it grow so that you can meet all your future needs comfortably.

Exponential growth potential

In the past two decades, the stock market has outperformed all other types of investment be it gold, silver, bond, etc. It has given an overwhelming return to smart investors. In fact, there was no limit on the percent of return the stock market has provided. Can you believe, some stocks have given 90,000% return in 10 years. Yes! Stocks of Symphony, Ajanta Pharma, Caplin Point, Relaxo Footwear, Manappuram Finance, Eicher Motors, and Capital Trust have jumped by several thousand percent in the last 10 years. If you have invested just 10,000 rupees in any of these stocks in 2006, you would have got a return of 90.77 lakh in 2016. Isn't this much money enough to purchase your dream flat, and a car? 

No extra qualification or skills required to invest in the stock market

A person once asked Warren Buffet, “what education and skills are required to invest in the stock market?” He said, if you have cleared your 10th grade, you can invest. He was right in stating this for you don't have to be a mathematician or a financial expert to invest in the stock market. You can easily invest in stocks in India without any expertise. By opening a Demat account with as little as 300 or 500 rupees, you can start investing. Once the Demat account is opened, you can purchase the stocks of any company. There is no limit on the purchase of stock. As per your capacity, you can buy stocks by investing 500, 1000, or 10000 rupees. However, before stock investing, it's better to take share market classes from a reputed institution. You can even take a service of a leading broking firm for managing your stock portfolio.

Chance to earn short-term and long-term income

The Indian stock market is growing faster with each passing day. The inflow of money it has been receiving after demonetization is mind-boggling. Many investors have made a killing in the last 5 to 7 years. 

Short-term investment

If you are looking to invest in stock for a period of one year or two and sell it or convert it into cash, then short-term investment is a good option. For higher returns, you can invest in mid cap shares. If you have a high appetite for risk, then go for investing in equities. There are option such as Intra-day trades, equities trading, or BTST trades for short-term capital gains. But certain rules of trading need to be followed. It's better to learn them by taking stock market investing classes in Pune. Remember, you can make big gain or big losses in trading. 

Long-term investment

It is ideal for those who want to invest money for 5 to 7 years. You can gain attractive returns by investing in multi-bagger shares and large cap shares. Then, there are mutual funds and bonds that can fetch you decent returns as well. But to gain from long-term equity investments, you need to analyze the company's market potential and performance diligently.

When you see the records of the stock market for the last two years, you will see some stocks have given more than 100% returns in the last 2 years. Check the table below:

Hindalco – 400%
VEDL – 500%
SBI – 100%
DLF – 100%
Tata Steel – 300%
Ceat Ltd. - 200%

If you are eager to make your idle money grow and fulfill all your financial goals, hurry and enroll yourself in the best stock market classes in Pune. Believe it, with a little diligence, research, and guidance of a professional financial advisor, you can definitely make a killing in a few years.

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