The paramount purpose of investment is to make certain to meet the future financial ambitions of the person invested. Constant inflations in every market make it nearly impossible for every individual even to save minor portions of their earnings. Investments become essential in times of inflation for individuals who want to make ends meet. When it comes to investing the Stock Markets are the longevously and the most popular sort of investment avenue and a better choice because of the numerable benefits it offers.
In this article, we will be discussing various benefits that are likely to be experienced by a person who invests in the stock market. Some of the benefits of stock investing are as follows:
- Higher returns of investment in a short time
- Obtain ownership and the right to vote
- Regulatory environment and Framework
Concerning the Indian stock market, two major stock exchanges are there, that is to say, the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) perform a major role. Almost all the companies trade their shares in either one of these exchanges or even in both if needed. This raises the average daily volumes, which results in providing higher liquidity to the investors. On that account, this liquidity makes it easy for the investors to buy or sell any of their products in the stock exchanges.
The stock Markets provide the investors with an extensive choice of products for them to invest their money, such as financial instruments like mutual funds, shares, bonds, and derivatives. Apart from giving a wide range of investment choices, the flexibility it offers is fruitful when it comes to reducing the risks associated with stock investing by enabling the diversity of investment portfolios.
Higher returns of investment in a short time
Stock investing ensures its investors a magnificent probability of earning greater returns in a short period of time when compared to other investment products such as bonds and fixed deposits. Holding on to the stock market fundamentals, such as using stop-loss, take-profit triggers, planning the trade, doing the research, and due diligence, and having patience can remarkably reduce the risks associated with investing in stocks and accelerate the returns on share market investments.
Obtain ownership and the right to vote
Even a single share will empower the investor to be the owner of the acquired portion of the company. This ownership reciprocates the investors the right to vote and to offer their contribution to the strategic movement of the business. In spite of the fact that this might seem to be an exaggerated statement, there are several instances in which, the shareholders have put a stop to the unreasonable decisions made by the company management that are inimical to their interests.
Regulatory environment and Framework
The Stock Exchange Board of India (SEBI) is the regulatory body, that is responsible for regulating the Indian Stock Market. In India, SEBI is responsible for regulating the stock exchanges, and their development along with protecting the rights of the investors. This means every investment made by an investor in the financial products of the stock market is well protected by a regulatory framework. This remarkably helps in diminishing the risks caused by the fraudulent activities of companies.
The advancement of technologies has impacted almost every aspect of today’s lifestyle. Several technological advancements have taken place in the stock exchanges to provide exceptional convenience to investors. All the trades are now carried out on an electronic platform to set the seal on the best investment opportunities in an open environment. These days the broking service providers are giving online share trading facilities for the convenience of investors, so they will be able to place their orders through a computer from the solace of their offices and homes.
The Demat account alleviates the process for the investors to electronically hold all the products in their investment portfolio in a single location, to easily track and monitor their performances.
Despite the benefits of stock investing, investors have to be more attentive while making any decision. They have to get a profound understanding of the basics of the stock market and it is advised that investors must research before making an investment to earn maximum returns and reduce the risks.