The Pros And Cons Of Different Methods Of Investingby Ankita Sehgal Freelance Blogger, Lives in New Delhi
While a majority of people like the idea of investing their money in the stock market, what’s most important is gaining some real profits. There are a number of ways, people invest in stock markets. Understanding the pros and cons of each, however, is essential to make a worthy investment. Let us look at the same in detail-
1. Investing the Money on Your Own-
This generally happens when you are clear about what you want to buy and when you want to resell. You try to make the wisest decision because you are aware that you will be responsible for your profits or losses. You also have a fair deal of freedom in such a case as you can do whatever you want with your money. Discount brokers are usually involved to keep the expenses minimum. The downside, however, is that it takes a lot of time to do the necessary research which is necessary to find good stocks and the appropriate time to sell them.
2. Using a Traditional Stockbroker-
While traditional stockbrokers usually charge more in the form of commission as compared to discount brokers, they provide additional benefit in the form of recommendations for stock purchases. They do the research on your behalf, but the final decision is up to you whether to invest or not. For those with lack of time, this is one of the best ways to invest in the stock market. The only thing which is going to consume your time is finding the best broker to perform the job for you.
3. Buying Index Funds-
This is one of the simplest ways of investing in the stock market. This involves buying mutual funds with stocks representing an index. The funds will rise or fall depending upon the rise or fall of the company you are investing in. This also consists of investing in growth capital India in which mature companies are chosen for investment which is in need of capital for further expansion.
4. Making a Private Equity Firm do it for you-
Most of the rich people take the help of private equity investment firms. One or more managers will invest your money depending upon the size of the firm. A fee is usually charged on the basis of performance and other factors. There is no dearth of equity firms in India with some being general and others specializing in a specific area.
It is necessary to keep in mind however that there is no particular best way of investing in the stock market. Also, what is best for you might not be best for another person. It usually depends upon a number of factors such as the time you devote to research, your skills in investment, your area of interest etc.
Created on Jul 5th 2018 07:37. Viewed 219 times.
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