5 Reasons & Benefits Why You Should Invest in Stock Market
People invest in FDs, Gold and properties to increase their wealth or enhance the value of the money they have parked extra in their bank account. But do you know there is one more place where you can invest money with the advantage of an increase in wealth and various other benefits?
I’m talking about the stock market or you can say the share market which is also known as the equity market in financial terms. Yes, the stock market is another investment option that can give you lucrative returns if invested wisely with multiple other benefits. So let’s find out why you should invest in the stock market.
5 Benefits of Investing in the Stock Market
#1 Earn a Long-term Capital Gain
If you compare the stock market return with real estate, gold and other investable instruments with a time horizon of five years or more you will get the highest returns. And if you invest in the blue-chip companies or in the top companies’ stocks their price also increases over time being.
With the growth of the economy, the revenue and net income of such companies increase, hence their share price value also increases. However, in the short-run, there could be volatility in the stock market but in the long-term, you will definitely get high returns if everything goes well.
#2 A Highly Liquid Investments
In earlier days after selling the stocks investors got the money in 15 days into their bank account, later it was reduced to 3 days, then 2 days and now SEBI has introduced the same-day settlement policy in the stock market to get the money on the same day after selling the stock.
Though same-day settlement is not applicable in all types of stocks, it will take some time to fully implement but still, you can get your money in 2 days if you sell any stock. I think it is one of the highest liquid investments that you can liquidate within 2 days if you need money for any reason.
#3 Investments with the Diversification
In the stock market, you can buy stocks of different companies from different industries or sectors giving you an opportunity to invest with diversification to avoid volatility in any particular sector. In the stock market companies from all types of industries and sectors are listed on NSE and BSE.
Apart from that, you can also choose to invest in equities, IPOs, preference shares, debt instruments, ETFs, mutual funds and government securities using your demat account you have opened for investing in the stock market. A diversified investment is more safe and secure in terms of getting a balanced return.
#4 Regular Incomes from Dividend
When you buy the shares of a listed company you also become a shareholder (although a minor shareholder) of that company. Hence, you are also eligible to participate in voting (via e-voting or online) and also get the various other benefits that the company give to its shareholders.
The dividend is a part of the net profit that the listed company shares with its shareholders. In every quarter when companies declare their financial results they also declare dividends.
However the dividends are not always paid by the company, and it is paid in very small amounts as per the shareholdings. If you have major shareholdings, dividends would be the regular source of income.
#5 A Transparent and Secured Place
In India, the stock market is regulated by the SEBI, a central government’s regulatory authority to control the rules, regulations and unusual activities in the stock market.
Also Read: Factors to Consider Before Investing in Stocks of a Company
Moreover, NSE and BSE both the stock exchanges are the centralised stock exchanges governed and regulated by the SEBI and various other regulatory authorities like RBI, Finance Ministry and the Central Government.
So, don’t worry while investing in the stock market, as these authorities keep an eye on every transaction or any unusual movement of stocks and suspicious activities in the stock market to ensure the protection of investors’ interests and ensure the highest level of transparency.
Hence, what are you waiting for, choose the right discount broker or full-service broker and open a demat and trading account to start your investment journey in the stock market and enjoy the benefit of high returns with diversified investment options in highly liquid instrument at nominal charges.
Disclaimer: The views and investment tips expressed by investment experts here are their own and not those of the website or its management. And the movement of recommended stocks are subject to the movement of the main index or entire stock market. Hence, there is risk investing in the stock market, it is advised users to check with certified experts before taking any investment decisions.
