The act of committing money or capital in the share market or any commodity to achieve an additional income is called Investment. Investment is primarily made for future purposes in hope of growth in capital with time, however it is also associated with certain risks. The Sensex market determines the profit and losses that the investor is going to face. The experience of how to buy the shares in the market is extremely necessary especially for beginners. Whether you are a beginner or an expert, there are mainly two types of investors – one who wants to have an active hand in managing money and the other in who wants to invest and forget about the money invested for 15-20 years, with the sole aim of expecting a higher ROI. Let us take a look at the top 7 benefits of investing in share market in India:
The stock exchange and investment have a lot of pros and cons associated with it which make investments different from ordinary stocks in the stock market.
The seven most important benefits of investing in stocks are-
- Tax- Tax is a factor that can eat the gains in ordinary shares. Investing in the share market helps the investor in maintaining the rate of return on the investments, thus managing the tax earnings.
- Innovations in technology- The updates and innovations in technology are one of the reasons why one can get information about the stocks easily. The people have started trusting the results that technology gives. Though the investor needs some amount of prior information from the mutual funds or the banks, with the help of online available resources they can analyze the performance of different funds and companies and invest according to it.
- Investment in diverse sectors- One of the benefits of investing in the share market is that the investor has an opportunity of investing in companies operating in various sectors and segments. This helps in optimizing the allocation of assets and getting a diverse range of returns from various companies.
- Shareholder- Investing in stock or share means taking a stake in the company in which one is investing. Investing in the market means getting all the benefits that the company is getting and the shareholders also have a hold-in the major decisions of the company. The annual report of the performance of the company is also passed by the shareholders to let them know the future possibilities of the company.
- Long-term benefits- From a long-term perspective, it has been proven that the person who invests in the share market gets the maximum which means the multitude of investments can also be doubled or tripled depending on the company.
- Additional source of income- Few investments in stocks act as an additional source of income in the form of a dividend which means that the returns will come even if the stock has lost its original value.
- Better returns- According to the records of how the stocks have performed, it can be seen that the average probability is that the stocks will return an additional 10% which is far better than the inflation rate of 3.2%.
Nowadays, for better protection of money, a Demat account is considered in which the investor can invest and protect their money in an online account. If you are planning to open a demat account anytime soon, then ensure to educate and understand the fundamentals as much as possible. In short, a demat account holder has numerous benefits as mentioned above, additional to the guaranteed returns/profits on their invested shares. So why wait? Open a Demat account now!