This is a question that may come to your mind if someone advice you invest some percentage of your income in the stock market. A very important fact that cannot be ignored here is making an investment in the stock exchange is considered to be a risky affair because it does not remain stable. Sometimes, it may touch the record levels and another day, the market can crash, leading to the disappointment among the investors.
Another reason is that if you are earning well and invested money in the fixed deposits (FDs), real estate and other government bonds or securities, then why you must focus your attention towards the stock market also, which is volatile. Well, you are right on your part, but it is time to get rid of the conventional thinking and start investing in the market because of the following prominent reasons:
To Beat the Inflation
The prices of the products, services and other things do not remain constant. They keep on changing and if your financial position is not strong to keep pace with the rising inflation, then you may experience some inconvenience in the years to come. What’s the need of stashing money into the bank account, if you are not able to meet your requirements in a hassle-free manner. Let us understand this concept with a simple example.
Suppose, over the years, you are able to save Rs 20 lakhs, which are kept in your bank account. You want to purchase a house, which costs Rs 20 lakh currently. However, due to some reasons, you decide to put on hold the plan of buying a home for the next year. The bank is giving you a reasonable interest rate of 6% per annum. Now, next year, when you show your intention to buy the same home, then you are shocked to know that the price of the home has increased to Rs 22 lakhs but you only have Rs 21 lakhs (which also includes interest earned) in your account. The home that you could have easily purchased last year is now out of your range and this is how an inflation affects you.
Hence, keeping money on the savings account is a good thing, but it cannot help you out to beat the inflation. It is important that you must start investing in the stock market, take advice from the top advisory companies, pick the best stocks and get profitable returns.
Make Your Money Grow
We all know that money is important to care of our needs without any difficulties. It is important to make your money grow to get rid of the problems, you may encounter in the future. Keeping this in the mind, it is imperative that you must undertake some research work and invest in the shares of those companies that are showing consistent results. By this way, you can ensure that the money is growing for you automatically without making much effort.
Investing in the Stock Market Does Not Cost Much
Most of the people have a misconception that you must be super rich to make an investment in the stock market. This is a baseless myth and nothing else. You will be surprised to know that you can invest with less than Rs 100 also. Yes, you heard it right. All you have to do is to pick the right stocks. If you are investing for the first time, then you can take help of the reputed stock market advisors who can guide you effectively and help you get good returns.