- Investing in stocks is mean that you are holding a company’s share and you are the authorized shareholder of the company.
- In the meantime, if the company will grow its stock value will get increase and you will earn profits.
- Investing in stocks is a great way to get a good return.
- There are many impacts of investing in stocks some pros and some cons.
- In this article, I am gonna analyze the pros and cons of investing in stocks.
To invest in stocks you need a demat account. Open a demat account click on this.
Pros and Cons of Investing in Stocks
Every fruitful things have its good impacts as well as its drawbacks. Investing in stocks is also like that, You will get profits but there are some cons that you may face.
|Grow with economy||Highly risky option|
|Support in inflation||Taxes are applicable on profitable returns|
|Don’t required huge capital, can start with few money||Needs good knowledge to analyze stocks and its fundamental and technical|
|Easy to buy and sell||May lose all your savings|
|High liquidity||Compete with the professionals|
|Earn good profits in few times||Some times it takes lots of time to get return|
|Make a passive income source||Give enough time to acquire knowledge and invest|
Pros of Investing in Stocks
- Stock market is a subject to market risk. You need to know the details of the stock before investing.
- Stocks investment can be a good opportunity if you can get the knowledge and it’s advantages.
1. Grow with Economy
- To Grow up your financial situation or improve it you should try new way to make a income source.
- Doing it investment is the best way to where you can make it and investing in stocks is rather better than others to increase it in a large scale of earning.
2. Support in inflation
- The inflation in every year is increasing by 7% – 8%.
- To find the value of money and survive in the inflation investment can make the support of your economy.
3. Few Capital Required
- Investing in stocks means that you are buying a company’s stock and became the share holder of the company.
- Good and large cap company has a high price of their stocks. But also mid or small cap company which is growing can also help you to grow your money.
- You can start with a less capital to invest in stocks.
4. Easy to buy and sell
- Stocks buying and selling are so easy which a matter of single finger tap.
- You can to it now through online in mobile sitting in home.
- There are many online brokers who provides you the facility of the online trading platform.
5. High Liquidity
- Stocks have high liquidity.
- You can buy and sell it in trading time whenever you want.
- The stock market is opened til 9:15 AM to 3:30 PM every Monday to Friday.
6. Earn Good Profits in Few Times
- You can get good profits by using some investment methods in a quick time.
- You can do swing trading, Intraday trading etc.
7. Make a Passive Income
- As the inflation rate is growing in every year people need to make a passive source of income.
- Investing in stocks can help you to get some earning from it.
Cons of Investing in Stocks
Stocks market is the most risky investment option. The market can move to any direction any time as it has a volatile nature. While investing in stock market you need to know the drawbacks of it.
1. Highly risky option
- Stocks is subject to market risk. You may get stucked in the hype of the market .
- Because the market is very volatile. You may lose all your money even the last asset you have.
- Stocks investment will be considered if you get regularly profits from it.
- A good amount of profits is considered as a earning source and you have to pay taxes as income tax.
3. Needs Proper knowledge
- Stock market is not as easy as it is not only about buy and sell of stocks.
- You should have the technical knowledge of analysing the stock’s technical and fundamentals as in future how it will perform. Then you can invest in stocks.
4. Lose Everything
- You can get everything by investing in stocks, also you may lose everything.
- Stocks investment is kind of mysteries finance strategy.
5. Compete with the Professionals
- Many investors choose trading as their profession and they are expert of it. When you get in this field you have to compete with them.
- ThEre you need lots of experience and knowledge.
6. Takes Time
- Though stocks investment is a short time investment option and traders use those methods.
- But sometimes it takes lots of time may be a decade though.
- LiKe if you buy a stock and it’s price gets drop a huge gap then it might take too much time to recover. Also some investors purchase stocks for long term investment.
7. Takes Time to Gather Knowledge
- Learning about the stock market is not a cup of tea task for everyone.
- People need much time to acquire the knowledge and get prepared for the investment.
- Identify the technical and fundamentals analysis is a hard work to gather the information.
How You can Buy and Sell Stocks?
- Invest in stocks you need a demat account. In this account you can purchase and hold the stocks as much as you want.
- You need to open a demat account through any broker.
- Then add funds in your account.
- After adding the funds you can start investing in stocks.
- There is a clear view that investing in stocks have benefits and as well as drawbacks. When you access the stock market you will get the both impacts on your investments.
- The stock market is very volatile. The return from the stocks is never guranted.
- You can get the dividend money every wear and can earn upto average of 10% .
- But you can decrease your risk by making a diversified portfolio.
- You can invest in a good company and those which has a large market share. Large cap and fundamentally strong company provides you a less riskier investment.
Thank You for reading this article.Wish you a safe and profitable trade.
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Frequently asked questions (FAQS)
1. Is investing in stocks a good idea?
Investing in stocks is a valuable investment option. Stocks can generate a good earnings from stocks.
2. What does it mean to invest in stocks?
Stocks of a company is the splitting of ownership. If you are buying stocks of a company is mean that you are becoming a share holder of the company. Investing in stocks is another way to make investment in the business.