In today’s article, we are going to know about the benefits of stock investing. Friends, one of the most successful investors of all-time Warren Buffet while giving an interview once said in his statement that he started investing at the age of 11 but regrets getting late. That is, warren buffet feels that it is too late to start investing from the age of 11, if a successful person like Warren Buffet gives such a statement, then it is sure that there will be many benefits of investing in the stock market. But people especially in India do not have information about all this, so why should you invest in the stock market and what are the benefits of investing in the stock market, we understand it in this way.
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Benefits Of Stock Investing
Investing in the stock market is a great way to earn money for your future. There are both risks and rewards associated with it. But if you do it properly and use a variety of ways to earn a profit, then you can have a lot of fun and make money at the same time. Many people have lost a lot of money in the stock market over the years, but if you are smart enough and know what you are doing, you can actually earn a lot of money and have fun at the same time. Here we are going to explain 4 major benefits of stock investing.
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1. It helps to keep pace with inflation.
You must have heard about your inflation before, this is a very strange concept in the financial world. In simple language, inflation can be understood as slow and study. Which increases the cost of things over time. For example, in the days of the 90s, it used to cost only 10 rupees to watch a movie and in today’s time, it takes 150 to 200 rupees to watch a movie.
This usually happens because inflation drives up the price of things over time. This means that the money that you have earned through your hard work gradually gets valued over time. The inflation rate in India is running at an average of 5-6 percent. So when you save for the future like to buy a house, for retirement, for children’s studies and many more. So inflation is your enemy here, so what will you do now? If you keep the money in a savings account, then the interest rate in the savings account is about 3%, which is less than the rate of inflation.
So keeping your extra money in a savings account reduces its value. The second option we have is a fixed deposit, on a fixed deposit, we get more return from the savings account and maybe you can earn a little more interest than the inflation rate in FD, but in a fixed deposit, you do not have much help in fulfilling your goals. And on the FD that you earn, you also have to pay 10% tax. Suppose you have made so much money that today you can buy a Honda City car but you keep that money,.
then in case 1 if you keep that money in the house in which you will not get any interest, then after 10 years one of the money in that evening You will be able to buy low budget bikes.
In case 2, if you get that money FD, then after 10 years you will be able to buy a high-end Honda car with that money.
And in case 3, if you invest that money wisely in the stock market, after 10 years you will be able to buy a high-end BMW, Audi, or Mercedes.
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2. History Shows Strong Stocks Always Goes Up.
Benefits Of Stock Investing: There has been growth in the Indian stock market since its overall launch. Many times there have been some big crashes, some poor performance of the company, but as India’s global economy has grown over time, the stocks have also increased upwards time.
3. Stock Investing Can Diversify Your Investment Portfolio
Benefits Of Stock Investing: You can diversify your investment portfolio by including low-risk investments like government bonds, money market accounts, fixed deposits as well as stocks in your investments. Which can protect from the volatility of the financial market. Often when the stock market is down, the bond market moves up and vice versa. You can control the volatility of the market in a better way by investing in stocks, if you say directly in words, then you should not put your entire wealth in only one type of investment.
4. Easy to Invest
Benefits Of Stock Investing: Stocks are said to be one of the most liquid assets, which means they can be quickly converted into cash. One of the great things about stocks is that investing in them is easy. By simply signing up with an online stock trading broker, you can buy and sell stocks in a few clicks. You have to do research about the stocks to invest in the right way.
But if stock investing is clothed with real estate or investing in small businesses then stocks are fast, easy, and cheap to trade. But you do not need to rush to start investing in the Indian stock market. The first thing you should do is do your homework, be realistic about your goals and expectations and figure out how to do it well with whatever information you have available to achieve your financial goals.
These are the benefits of stock investing hope this blog post is helpful for you.
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