Investing in stock markets has always been fascinating as one never knows what might happen, one could end up getting high returns or it could be a disaster. However, investing in stocks could be rewarding if people understands the basics well, the risks involved in it and then invest.
Why should one invest?
Investing money in the market opens up the world for us, offering us money to do whatever we want. It allows us to have financial independence. Though the stock market is volatile, but domestic market has been able to give fair returns and expected to grow further in future. Thus a right mix of equities in one’s portfolio that would diversify the risk may help an individual get good return from his/her investments and also it would help them to fight inflation. Moreover, the stock market actually takes the savings from the individual and makes it available to the companies which can used for their expansion and in turn would contribute to the development of the nation. Thus investing in the stock market actually helps in the growth of the economy of the country.
How to invest?
If a person wants to invest in the stock market he/she can do it through mutual funds or can directly invest in the stock market. Investing money in the stock market through mutual fund is ideal for those who are beginners or those who wants to invest in stocks but they don’t have time or skills to research about stocks. Experience individuals can directly invest in the stock market.
What are the risks involved?
Investing in equities is highly rewarding but one needs to be very careful. One should be very careful while choosing the stocks of the companies as owing wrong stock may result in heavy loss for an individual. Thus one’s investment must be backed up by thorough research and analysis. Moreover stocks are volatile i.e. the prices are not same every day are influenced by various factors such as global cues , economic and political condition of the country and this also poses a threat on the investment returns of an individual.