Advantages of Investing in the Stock Market

 There are plenty of investment options available today from shares, mutual funds to PPF, FDs/RDs, etc but the investment option which has provided the highest returns in the long term is Shares. 

But high returns come with high risk. Hence before you invest your hard-earned money in the stock market, you should be aware of the advantages of stock market investing. 

Typically, investors prefer to stay away from uncertainty and tend to panic when such situations arise. This panic then breeds mistakes and in a volatile market, mistakes can be easily translated to losses. Therefore, investors need to understand how to overcome the advantages of stock market investing. 

• Higher Liquidity:

  In the Indian stock market, two exchanges, the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) play important roles. Most companies trade their shares on either or both of these exchanges. This provides higher liquidity to investors because average daily volumes are high. Therefore, if an investor wants to buy or sell any product on the stock exchanges, this liquidity makes it easy.

Gains

The most important aspect of investing directly in markets is the potential of the market to deliver the kind of gains it does.

Historic data suggests that stock markets have always passed the test of time, they have risen in value over a period of time, even though individual stock prices fluctuate on a daily basis.

Investing in companies that showcase a stable graph of growth and tend to clock higher profits every quarter or investing in sectors that add to the economic growth of the country will result in steadily building your wealth and increasing the value of your investment over a period of time.

Good returns on investments in a short time

As compared to other investment options in an ordinary scenario the returns on stock market investments are much faster. For example, the average annual return in real estate is 10.5%, for investments in gold it is 8.87% and for government saving bonds it is 7.75%. Whereas the returns on the stock investments on NSE were 16%.

Well-Regulated and Transparent Framework:

 Being a part of the global economy, stock markets are well-regulated and transparent to suit everyone’s needs in terms of Valuations, Pricing, Disclosures to ensure that none of the investors is at risk of hidden propaganda anytime, anywhere. As far as India is concerned Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) in association with SEBI provide a transparent, well-regulated framework and platform for exchange, trade, and investments of stocks

• increasing your public profile, and providing reassurance to your customers and suppliers