Articles

4 reasons to invest in stock market

by Pankhudi Dave Head Finance Manager
A stock market is like a supermarket. Unlike the supermarket where one can buys certain items and replace them, in stock market, here the buyers and sellers purchase shares of a company and thereby, claim ownership in the business. Stock markets are often referred as equity markets and buying or selling of stocks is called stock trading.

A share is a unit of ownership of a company. Buying shares or stocks of a company means that they are buying a unit of the company. However, the stocks of a company can only be bought when a company launches its shares in the market. Selling their own shares gives an opportunity to the company for raising funds for future growth. The shares remain involved in trading on exchanges like NSE or BSE. Before beginning the process of investing, it will be beneficial for investors to go through beginner’s guide to stock market, so they will be able to understand it better.

In stock trading, the company which issued the shares get only the amount which is collected through IPO. The money from buying or selling of the stock on an exchange does not go to the company. The money involved in trading is either lost of gained by investors as per the perceived value of company. The stock market is impartial and neutral. It does not work according to a specific plan or pattern. It makes the market highly unpredictable, but it also provides equal opportunities for everyone to help investors making profits.

Some of the reasons why investors should start with stock trading are listed below:

1.    Stock trading has become easy now:
It has now become easy to invest in stocks in India now and they hardly require any type of expertise for buying stocks online. Stock trading done through online brokerage accounts has become easy and simple now. With the brokerage firms finding their spot on the internet and mobile apps, finding and selecting stocks has become easy. Investors will not need to go through the financial newspapers and magazines. Investors can easily find the information on the company's website. 

2.    Tax benefits:
There are a lot of tax benefits available for individuals who have begun with the process of stock trading. Investors can save tax by investing in stock market indirectly though mutual funds. It is the mutual fund which offers the facility to save tax as well as grow the investors income on a regular basis.

3.    A secondary source of income:
With the help of stock trading, investors can always have a backup. For public in India, stocks help to create this additional source of income. A lot of the people are entirely busy with their office throughout the life. Stock trading can be done as a way to generate a second source of income. Through the value of appreciation and dividends, they can steadily grow additional income. This is why people need to start investing through stock trading.

4.    Power of compound interest:
Stock trading allows an individual to take advantage of compound interest that grows their wealth exponentially. Most of the bank savings account provide the individual a linear simple interest. However, with investing in stock, investors can get compounded returns. One of the reasons people opt for share market investment is the power of compounding. 

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About Pankhudi Dave Freshman   Head Finance Manager

9 connections, 0 recommendations, 46 honor points.
Joined APSense since, July 2nd, 2019, From Mumbai, India.

Created on Aug 19th 2019 05:33. Viewed 244 times.

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