You can find various options and financial products in the market to invest and increase the value of your wealth. From FDs to bonds, real estate or precious metals there are multiple options to invest with different return potentials as per the assets. For most of the investment assets, you will get a fixed or stable rate of return during the period or till maturity.
And to invest in real estate and property or precious metals like gold or silver you need a huge amount of money that is not possible for every individual. There is an investment field that can give you good returns not only in the long run but also has the potential to give higher returns in a short period with the flexibility to invest as per your ease and affordability.
Yes, I'm talking about the stock market or share market which can be a risky field but featured with all types of investment options and high return capability. Here in this article, we are going to discuss the advantages of the stock market with various other aspects that will encourage you to think about investing in the share market and how to start your investment.
10 Advantages of Investing in the Stock Market
Ease of Investing through Cross-platforms
One of the best things about investing in the stock market is that you can now invest through multiple devices like desktops, laptops and smartphones. Yes, in the digital era, you can find many discount brokers and top broking companies offering online trading platforms to get updated information on the stock market with the facility to buy and sell shares.
You can access your trading account through the stock market application using the same login credentials with ease of investing as per your availability. In earlier days you had to call your broker and transfer the fund manually and then on your behalf your broker can buy or sell shares. But now due to digitalization and with wide payment options, you can do it yourself.
Flexibility of the Investment
Another benefit of investing in the stock market is you have the flexibility to invest as per your ease and affordability. Just like real estate or property, you don't need a huge amount of money to start your investment journey in the stock market. Here you can start with a smaller amount even with a penny amount buy stocks having very low prices.
Moreover, you are not bound to invest for a particular period, if you are getting a good return you can sell the stocks the next day and monetize your investment. There is flexibility to choose stocks from different sectors and the companies that you can afford as per your affordability. Investing in the stock market you have wide flexibility to invest.
Higher Return on Investment
In real estate and precious metals, you can get high returns but you have to wait for long years to enjoy such high returns. But when you invest in the stock market it is not necessary to wait for the long years you can get the higher returns in a few days or months. This is another advantage of the share market can give a higher return in the short or long run.
However, in the long run, your investment in the stock market will give you one of the highest returns compared to any assets in the world. With the growth of the economy, the revenue of the companies also grows and their stock prices also move. Investing in the right companies or sectors having better scope can give amazing returns.
Ability to Earn in the Short-term
When you invest in the stock market it is not necessary you have to wait for long years to get the returns. Here sometimes or you can say many times, your investment can multiply in a few days giving you an opportunity to earn amazing returns. The stock market is one of the highly volatile (VIX) places where stock price moves abruptly in a few minutes.
Long-term investors buy stocks with prospects to get good returns but traders buy these stocks with prospects to get returns in a short period even in a few days or on the same day by intraday. Though, there are some chances of incurring losses in the short term if you use the technical analysis and the right technical indicators you can earn from stocks quickly.
A Fully-diversified Investment
In the stock market, there are unlimited companies listed from different sectors and industries of the economy. From banking to pharma and real estate you can pick the right stocks from different sectors. Investing in different companies from different sectors gives your asset a well-diversified investment from different stocks of the economy.
Putting your money into a single asset or sector is not a wise decision, as any kind of unfavourable economic conditions towards that industry can badly affect your investment. If you have bought the stock from different sectors, you will get a balanced growth of return on your investment. If one stock falls, another might rise and not affect your portfolio.
High Liquidity of Investment
Investing in the stock market has another amazing benefit that gives you the flexibility to liquidate your investment anytime as per your needs. Yes, when buy the stocks from the market, you will get the delivery of shares the next day into your demat account. Similarly, you can sell the shares anytime during the market hours, and get the money the next day.
Moreover, you can get margin of money immediately on your sold shares and if you don’t want to sell your shares, you can pledge or mortgage the stocks to get loans and borrow money from banks or your broker with the facility to liquidate your shares anytime. This kind of highly liquid investment gives you options to convert your assets into money.
Passive Income through Dividends
A dividend is the portion of net profit earned by the company distributed among the shareholders from time to time as per the approval by the board of directors. Usually, companies declare or pay dividends along with their quarterly, half-year and annual financial results. However, sometimes companies also pay interim dividends from the general reserves.
Apart from increasing the price of stocks and enhancing your assets value getting the dividends is a kind of passive income that you will earn when you stock. However, all types of companies do not pay dividends, like infrastructure, real estate and high capital expenditure-oriented companies, as they invest most of their profits into their business for more revenue.
Companies from the pharma sector, FMCG, banking and IT give higher dividends compared to the companies discussed above. Hence, while investing in the stock market pick the right company as per your investment criteria and time horizon.
Pride of Ownership in the Company
Though it is very small or minor almost negligible, when buying the shares of a company in any quantity even a few stocks, you also become the owner of the company as per your shareholdings. This gives a pride of ownership in the listed companies. However, for individual or retail investors there is capping or investing in the shares at certain limits.
The ownership in the companies gives the shareholders a right to vote in the annual general meetings that are held from time to time. If you hold shares of any company you can vote against or favour the company which can affect the decisions of the management. In many cases, shareholders have prevented the company's management from the decisions that are not suitable for shareholders or as per them not in the interest of the company.
Hedging of Your Investment
In a growing economy, inflation is a natural phenomenon, and your money parked in a bank account or kept in your house for more than one year will be depreciated. Yes, if you are not earning this money higher than the inflation rate, it means the purchasing power of your money is decreasing. But when you invest in the stocks it works like hedging.
In one year most of the stocks move higher than the rate of inflation. In exceptional cases due to uncertain market conditions, sometimes the stock market can give you negative returns otherwise stock of the companies like FMCG, IT and Pharma rises. And when stocks of the companies outperform the market, it works like hedging against the investment preventing your money from getting depreciated due to high inflation in the economy.
Transparency and Security
The stock market in India is regulated by the individual regulatory body Stock Exchange Board of India (SEBI).The central government has established such an independent regulatory body to control the operations and protection of investors from any kind of scam or fraudulent activity in the stock market reducing the risk of investing in such assets.
The stock exchanges are regulated by SEBI and they follow all the regulatory norms to ensure the smooth running of the stock market to offer a completely transparent and secured platform for trading and investing. Moreover, the listed companies also need to follow various compliance to make sure the investors' money stays safe and secure.
Stock exchanges are using advanced and highly complex mechanisms to protect market operations from any kind of manipulation. Moreover, in the digital era, stock exchanges keep an eye on the entire activity in the stock market with a quick detection system to notice any kind of unusual activity in the market and prevent the same from major disasters.
How to Start Investing in the Stock Market?
Investing in the stock market is not only easy but also hassle-free due to online trading platforms offered by discount brokers and big broking companies. But to start investing in the stock market you must have a trading account and a demat account with the broker. Once you have these two verified accounts, you can Trading or Investing in the market.
You can invest in the stock market with two modes – first, call your broker on the phone to buy or sell the shares on your behalf with the amount of money required to buy. Once your broker gets the funds in your trading account your order will be placed. This was a traditional way to buy or sell shares in the market, but now in the digital era scenario is different.
You can choose your favourite trading platform, transfer the fund into a trading account quickly and buy or sell at one click through your computer or smartphone. But when choosing a discount broker in India and an online trading platform you need to be very careful about the various aspects to enjoy trouble-free trading at the cheapest brokerage fees.
Here you can choose the Moneysukh which offers the complete investment and trading solution in the stock market. Here you will get the best trading app for beginners to start investing in various financial instruments including equity, commodity and forex markets. Apart from calling directly to brokers, you can use the online trading software Trade Radar to place your orders in the equity cash market in the F&O market or the derivatives segments.
Moreover, Moneysukh also provides the facility for Algo-trading for the traders to enjoy the profits from the high-frequency trading. You can choose here the profitable algo trading strategies and trade with the best intraday algo trading strategy to enjoy the power of AI-based trading systems in the stock market. This will not only help you to save your time and effort but also offer an opportunity to earn smaller profits but in high quantity or fast trading.
Apart from the stock market application for trading, you will also get the latest news, updates and useful insights about the market with the facility to get access to research reports. A team of research analyst works here to analyse the economy, industry or sectors and individual companies with a valuation of stocks for recommending the same to their clients.
You can get the intraday tips and recommendations to buy, sell and book profits in equities, commodities and currency markets. You will be informed by your mail and messages directly on your phone or you can access all the information on the company's website.
So, what are you waiting for? Start your stock market investment journey right from here and you will enjoy the best-in-class investment and trading facility at the lowest brokerage and fess with the safety of your funds and privacy of your personal data with us.