5 Reasons why should you invest in Stock Markets

If you are a newcomer to the stock market, you must be wondering why you should invest in the stock markets in India. People are heavily investing in stocks even though equity investments are subject to high market risk. This is just because of the fact that investment in stocks can give you returns that are higher as compared to any other asset.

There are many investment avenues available for any investor some of which are traditional avenues like fixed deposits, Government securities, gold, etc. which provide a risk-free return to the investors. But most of these conventional investment avenues fail to beat the inflation rate thus yielding negative returns to the investors. Thus, the role of new-age investment avenues increases which include the stock market, mutual funds, ETFs, AIFs, etc. Investment in stocks, mutual funds, ETFs etc. help investors to attain high returns on their investments but these are certainly subject to high market risk. Therefore, you must invest in any stock after due research and analysis.

Why invest in stocks?

If you think of investing in the stock market in India, you would be interested in knowing the reasons to invest in the stock market. Here are the 5 key reasons which prompt any investor to invest in the stock market:

• Lucrative Returns: Investment in the stock market may help you earn lucrative returns. Returns in the stock market will certainly help you beat the inflation levels.

• Steady Income: You can earn a steady income in the form of dividends by investing in high dividend-yielding stocks. For this, you will have to identify the stocks which have a constant track record of high dividends over the years.

•  No Lock-in Periods: Investment in Government bonds might have a lock-in period but investment in the stock market does not have any lock-in period. You can make investments at any time and redeem your investments at any time at your convenience.

• Low Tax Rates: Capital gains on the sale of shares are generally taxed at a lower rate as compared to a business or other income. This makes investment in the stock market an attractive option.

• Trade Convenience: Nowadays, you can easily open a Demat Account online and trade in stock markets through online platforms. This can be done simply on your mobile or laptop. There are many online/ discount brokers like Zerodha, Groww, Upstox which offer low brokerage on share trading.

One of the major benefits of investing in the stock market is that you invest in the growth journey of the country. This is also true that stock market investments carry high market risk as the prices of shares keep on fluctuating and in some cases, you may end up losing your investments.

Therefore, a careful analysis is necessary before making an investment in the stock market. Investing more time in gathering knowledge and experience is always handy when you are venturing into the stock market. If you are a first-time investor, please note that have a long-term outlook in the stocks you invest rather than doing intra-day or short-term trades. Long-term investments in the stock market will certainly yield positive and attractive results for you.