There are many investment options to choose from to grow your wealth steadily.
Some come with less risk of losses, and some with extremely high returns. Some are great for short-term financial goals, while some are better for long-term investments. Tax benefits and liquidity also decide when choosing a suitable investment for you.
Being financially secure requires understanding your future goals and deciding the best investment vehicles that suit them.
For years, investments in the share market have been a popular source of good returns. Over 27.4 million new demat accounts were opened in 2021.
Here are eight reasons why you should invest in stock markets:
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High Returns:
Though the prices may fluctuate every day, the share market has consistently seen a growth in returns. The stock market offers higher returns than other conventional financial instruments like FDs, RDs, etc.
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Protection against inflation:
The ultimate goal of wealth creation is to beat inflation. Due to inflation, what costs Rs.100 today may cost Rs. 105 tomorrow. Meanwhile, you will still have Rs. 100 lying in your wallet. However, if you manage to invest Rs.100, you could earn a 10% return making your investment Rs. 110, and you easily afford the same item for Rs. 105 while still having excess funds.
Investing in stock markets gives you high return rates that beat inflation.
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Liquidity:
One of the essential benefits of this form of investment is its liquidity. Investments in stocks can be easily converted to cash when the need arises. Online Investing can be very tricky and unsafe. However, the stock market is a highly safe online investment with a robust compliance mechanism. You can now transfer your funds back to your bank account with a single tap on your screen.
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Ownership and dividends:
When you buy the shares of a company, you own a small percentage of that company. It comes with unique benefits like getting the dividends distributed to the shareholders, which can be an additional source of income depending on the number of shares you hold.
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Passive Income:
As a result of the attractive returns, investing in shares could be a method for you to earn passive income and fulfil your financial goals without spending too much time on it.
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Versatility:
There are several ways to invest in stock markets like through Mutual Funds, Index Funds, and many more options to choose from.
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Ease of trade – transparency:
User-friendly digital platforms make it extremely simple for anyone to invest in the stock market. The onboarding process to get started takes minutes to complete the KYC authentication. These digital platforms are fully equipped with the right resources required to maximise your investments.
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Flexibility to invest small amounts:
If you feel like you need a lot of savings to start investing in stock markets, think again. Investing in stocks does not require any fixed amount of investment regularly. You can invest as much as you want and whenever you want.
Parting Thoughts:
With a bit of research, you have the potential of making the most of your investments and securing your future financial goals. Diversify your investments based on your risk appetite and watch your wealth grow!
