Based on historical data, the stock market has shown to deliver higher returns to investors over time when compared to other investment options like FD, bonds, savings account, etc. Depending on the business cycle, stock markets also can also at times go downside, thereby it is important that investors plan with the possibility for both profits and loss and to seek growth based on risk-return of the specific stock.
Investment in stocks has many benefits
- As the economy grows, you also grow: India is a fast-growing major economy, so as economy grows, so do company earnings. To put it simply – the growth of the economy creates more employment, which in turn creates higher sales and revenues, and profit. This results in faster wage growth helping drive consumer demand, more sales, and more corporate earnings.
- Beat inflation: Over the last decade, Sensex has averaged an annualized return of 15%. That's much higher than the average inflation of 6% during the same period. This positive net return can help create good wealth when held over the long term.
- Buy with ease: Investing in stocks is so easy. You can purchase it through online brokers or a financial planner. Setting up an account is so easy, so you can start buying stocks in minutes. Some financial technology companies like Finkompas let you buy and sell stocks at a very low cost.
- Sell with ease: Selling a stock is also easy. In the trading window, you can sell your stock at any time. This is quite useful as it ensures quick liquidity in case of financial need or to cut loss.
- Invest as per your goals: Depending on your financial goals and age, you can go for stocks that either provide good capital appreciation or pay good dividends.
Disclaimer: The views expressed here are of the author and do not reflect those of Finkompas.