There’s a famous quote of Warren Buffet: ‘’If you don’t find a way to make money while asleep you have to work till you die’’ Most of the people in the world are grappling with the financial problems which they could’ve avoided at the first place had they been able to manage their money. The question is how to make money along with the money management. Stock Market is a vibrant place to start your investment journey but before investing it is imperative to know what you are doing and why you are doing and to know every secret of the place where you are going to set your foot. Here’s the basic analysis of why you should invest in stock market –
Stock Market Myth buster –
#1 Myth — Stock Market is risky and equal to gambling, you will lose your money.
Well, if you think that stock market is gambling than you should also consider driving on road as gambling. With fundamental and technical analysis you can conquer the game of investing. There’s difference between speculation and investing, with right approach and assessment of the market we can easily minimize our risks.
#2 Myth — You need thousands of money to began investing.
Many people lack initiative to invest due to their lack of will power. Investment can be started with your penny savings, with a lot of patience and will. Warren Buffet had started invest at the age of 12, so you can never be pessimistic about what is written in your fortune.
#3 Myth — You need to be an expert in finance and commerce to began investing.
Investing is not a rocket science, but you need a mere rationality to understand a market. Radhakishan Damani, India’s fourth richest was a 1st year college droupout. You can look at many uncountable success stories like this. What you need is commonsense and basic understanding of how the market works.
Key Benefits of Stock Investing –
1. Protection — With ever growing inflation rates and sluggish bank interest rates of around 5% it is always better to invest in the place where you will not diminish you value of money. Stocks give you better returns than any other traditional investment with expected returnof even 25% is possible.
2. Incessant Growth — Your capital will grow when their is increase in the price of share in other words the growth of the business. You will grow continuously if the business grows your capital will grow too. What you need to analyse is a good business.
3. Dividends — Most of the companies offer dividends for their shareholders which serve as a bonus for your investment returns. There exist high paying dividend companies which can greatly enhance your wealth.
4. Tax Advantage — The Tax rates on the dividends and capital gains with are just 10 % over hundred thousand rupees this is far lower than the FD interest gains.
5. Liquidity — There is no liquidity crunch in the stock market, buyers and sellers are all over the place and you can easily trade at comfort. This removes out the possibility of your money stuck in any sticky investment.
Know Yourself –
There are a lot of people who run into stock market to turn their fortunes but it’s not always the case if you don’t know why you are dwelling into this game and your purpose of investing, with a clear objectivity in your mind, you should go ahead.
1. People try to replace their primary source of income with stock investing which often led to a path of nowhere to go because to replace you primary income it requires lot of patience and experience in stock market.
2. Many don’t know about their niche of investing suppose, someone is a short term investor but keep on switching to long term and intraday and that makes the matter worse because of no clear objectivity and your period of investing.
3. Knowing your goal is important before investing, for e.g. if you are investing for your house or marriage or for wealth creation. This can streamline your investing strategies.
Double Edged Sword -
Investing in any asset is double edged sword which promises you phenomenal returns but your ignorance and foolishness can make the matter worse. With scientific rationality and right analysis the threat of losing reduces as well as the risk factor.
With this I hope that you would get a better image of stock market and investing and some value is added to your life.
Note –This is a naive recommendation to invest in stock market for a beginner. It doesn’t give you any financial and technical details to make a firm decision, for investing you need to do your own research.
