The Many Benefits of Investing in the Equity Market

Equity market investments have become rather popular today, thanks to the increasing number of investment options available to investors. Today, investors can choose from a wide range of market investments, which are available at low-interest rates. Brokerage firms, too, provide online investment platforms and charge lower fees. No wonder more and more investors have become comfortable with equity investments. Here are some significant benefits of investing in equities.

Equity investments are highly liquid

The equity market in India is a place where you can buy and sell a wide range of market instruments. Most of the instruments in the market – especially shares are highly liquid. You can purchase and sell shares on the two main stock exchanges – the Bombay Stock Exchange or BSE and the National Stock Exchange or NSE. Moreover, there is no fixed date or tenure for which you have to hold your stocks. You can buy them today and sell then tomorrow, a month later or several years later. The idea is to sell shares upon booking a profit. However, you can sell them anytime and liquefy your investment. As such, these investments come in handy when you need instant cash.

There is a scope for high returns on investment

Another significant benefit of investing in equity markets is that you can gain high returns on your investment. Here, you can create a corpus by investing a small amount in the right scripts. To earn these high returns, you must ensure that you enter and exit the market at the right time. You should not get greedy when the stock price rises and wait for it to increase further, nor should you panic when the price falls. Also, you must ensure that you have adequate research and data to back your investments.

You can earn dividend income and bonuses from your investments

Several companies provide additional income to equity market investors in the form of dividends. This income is credited into your demat account even if the value of the stock has reduced. A dividend is essentially the income you get when the company sells a certain number of shares and books a profit. You can use the income earned from the dividend pay-out to invest in more stocks in the same company or another company. A few companies also roll out bonus shares which you can add to your investment portfolio. For instance, you can get one or more shares on every stock you hold, which, in turn, increases your investment portfolio.

Equity investments allow you to beat inflation

Another great advantage of investing in the Equity market in India is that you can beat inflation. As per several economic reports, if you invest in stocks of good companies (based on past performance and review reports), there is a good chance that you could earn returns to the tunes of 10% annually. Comparatively, the inflation rate has been rising by 3.2% per annum. As such, equities make for better investment instruments than most other products because they can help you beat inflation.

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Created on Feb 19th 2020 00:22. Viewed 288 times.

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