Finance

Why consider investing in the Stock Market?

It is a human tendency to expect a good quality of life and a secure future for yourself and your kids. Thesimple fact is that you need money, often more than you can save in your life, to achieve these things. You must invest your savings so that you can create wealth for yourself.

There are various instruments to invest today to create wealth, but there is hardly any as efficient and proven as Stock Markets. Across the world, Share Markets have created immense wealth for investors. The Indian Stock Market is no different.

For instance, Rs. 1 lakh invested in mid-1999 in the Nifty 50 index, which tracks 50 top stocks, would have yielded about Rs with dividends reinvested. 20 lakh by now, a compounded annual growth rate of 14%. No other instrument available in India would have made money at this rate during this period. Yes, the index has not seen a constant 14% return every year and has seen some volatility, but the upside potential outweighs the risks for most people in the long term.

Following are thereasons to invest in stocks via the best Indian Stock Market apps:

Biggest bang for bucks

Historically, stocks have given superior returns than almost all investment options available to typical investors. The market can quickly deliver double-digit yearly returns on good days and with the correct picks on your investment.Stocks may not be best for you if you have a short-term goal for which you need money. It is also an unsuitable option if you cannot absorb drawdowns of 10% and sometimes more.

The experience shows that in the Stock Market, you make money the more you spend time, assuming you are invested in a great business.  

Beating inflation

Inflation is something that eats away a chunk of money you hold. India has seen on average 6% inflation in the last decade. If your investments are not generating more than a 6% return per year, it is eating away at your savings. If you are entirely invested in traditional investment options like Fixed Deposits, going by the prevailing interest rates, you are barely beating inflation.

With its potential to deliver double-digit returns, the market helps you race past behind inflation, charting a path to create wealth.

Regular income

Besides creating wealth, significant investments in some stocks can also help you generate regular passive income as dividends. They are your share in a company’s profits that the firm decides to disburse. Though not all companies in India announce regular dividends, some quality names are famous for their track record for paying dividends; especially notable are government-owned companies.  

Liquidity

The best characteristic of stocks is they are redeemable on weekdays. Since there is no lock-in period for your investment, sell your holdings whenever you need funds. Just ensure you are not invested in some obscure names or a shady business because they may not be liquid enough when you try to sell your stake.

Diversification

All financial advisors agree on one thing: never put all your eggs in one basket. Even if you are a conservative investor preferring safety over superior returns, some exposure to stocks helps you outperform in the longterm and provide much-needed diversification to your portfolio. Meanwhile, if you are among those who dabble in extremely risky instruments like cryptocurrencies, Stock Markets can give stability to your portfolio.

Invests in them through the best Indian Stock Market apps. Research and see who offers the best tools to navigate smoothly through the process.

Disclaimer – ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. – ICICI Venture House, AppasahebMarathe Marg, Prabhadevi, Mumbai – 400 025, India, Tel No : 022 – 6807 7100. The contents herein above shall not be considered as an invitation or persuasion to trade or invest.  I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.

The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.

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