Advantages of Investing in the Share Market – Benefits of Stock market Investment

Overview

If you want to invest your money than there are plenty of investment options available today from shares, mutual funds to PPF, FDs/RDs etc.
The investment option which has provided the highest returns in the long term are Stock Market Investment. But in stock market the high returns come with high risk.
Before you invest your hard earned money in the share market, you should be know of the advantages or benefits of share market investing.

Advantages of Investing in the Share Market

1) Probability of high returns

2) Ownership stake in the company

3) Liquidity

4) Flexibility To Invest in Smaller Amounts

5) Hassle-free trading

6) Tax benefits

7) Guard Against Inflation

8) Dividend Benefits

1) Probability of high returns

The first and main advantage of share market investment is the high returns. In the Share market there’s probability to get high returns instead of Mutual Funds, FDs and RDs.

2) Ownership stake in the company

When you buy any stock of a particular company it means that you are buying an ownership stake of the company. It means that you as a shareholder play an important part in a company’s decisions and its events such that Dividend Trend (Dividend per share), Corporate actions (Bonus, Split) etc., and you have the power to vote in those decisions.

3) Liquidity

Unlike other investment like property and avenues it could take months to make your asset into cash. But in Stock Market Investment an asset that can be easily converted to cash, which has many buyers at any given point in time because in the case of stocks, it is much easier.

4) Flexibility To Invest in Smaller Amounts

If you are new in share market and don’t want to take high risk you can start your investment form your lowest amount. Because in share market you can see plenty of penny stock that are start from .10/Share (10 Paisa) to 50/Share rupees. And you are very Flexibility to buy and sell any stock.

5) Hassle-free trading

Today to buying or selling any share is not a complex mechanism. There are a lot of online portal and apps where you can start investment/trading is just few click on the portal or app even from your cell phone. Zerodha is India’s One of the biggest and online stock broker and they have currently 60 lacks active investors or traders.

6) Tax benefits

From the share market investment you can get Tax benefits that are like:
Long-term capital gains i.e. investments held for more than 12 months (1 Year) are taxed at 10% over Rs 1 Lakh only.
Short-term capital gains i.e. investments held for less than 12 months (1 Year) are taxed at 15% + 3% cess.

7) Help to beat Inflation

The stock investment helps you to beat inflation and make your financial future more secure. For example, if inflation is around 3-4%, then markets have clocked in yearly gains of around 10%.

8) Dividend Benefits

The Dividend is an add additional income for investors, which is paid annually by most companies. And the dividend payment directly transfer into your account by the company.

For example
If you have 100,000 share of a company and they gives you rupee 1/Share dividend than your amount will be 100,000/- rupees You can use it for re-investment or any of other expenses.

Conclusion

Although there are several advantages of share market investment, investors must be cautious while making investment decisions. You must actively look at investing in stock markets and diversifying your financial portfolio. Because with that you can stay ahead of inflation.