People who don’t have knowledge of the stock market always stay away from the stock market. because they think, the stock market is all about gambling. Also in the stock market, your money is not 100% safe. so in this situation, people always ask the question that” should I invest in the stock market or not? “.
First of all, you have to know that everyone is trying to invest their time, for good educations, for a good career so that in the long term their life will go through a great experience. lifestyle can be easier from others.
Similarly, People who investing to share the market also think to get benefits in the long term. investing to share the market is the only aim to get an outstanding return. if you keep a certain amount of cash in your hand your cash value will decrease day by day because of the inflation rate.global inflation rate data 2014(3.23%), 2015(2.77%), 2016(2.77%), 2017(3.2%), 2018(3.62%), 2019(3.41%), 2020(3.56%). all data compared to the previous year. So in this situation keep cash in your hand is not a good option.
Some people don’t want to take risks to invest in the share market. they invest to bond, Fixed deposit their money also invest to gold, all these investments are the safest investment.
Almost everyone thinks to rich but not all of them actually takes good decisions to be rich.
Poor people: earn today and spend today they don’t think about tomorrow.
Middle-class people: rather than focus to generate more earning they spend too much money to look rich and again spend all money to maintain those things. let’s have an example: middle-class people buy an expansive bike, car, show that they are rich. and also think that bikes, cars are assets. but in reality, those products are not assets day by day those things value will be decreased. also, you have to pay money to maintain those things. so how can I call those things as assets? similarly, if you have invested those amounts as a safe investment ( fixed deposits, gold investment, bonds) you don’t have to pay to maintain these things also, in the end, your money will be increase. these things are real assets.
Rich people: Rich people only buy those things which are actually needed. They always trying to generate multiple sources of income. it can be by investing or any other way.
I think your though is clear about investing. lets come to next point….
Why should you invest in the stock market?
First, I’m clearing that investing in the stock market is risky but choosing Good track records fundamentally strong share, also diversifying your portfolio or investing via mutual fund can reduce your risk.
Why people take risks in the share market instead of investing in gold, bonds, or any other safest investments? the simple answer is for high return if the stock market gives you 25% return annually within 3 years your money will be more than double because of compounding return.
If you have invested that money to fixed deposits and bank gives you 8% return annually its will take 10 years to double your money. that’s why people invested in to share the market.
If you can well manage your portfolio you can get a good return from the share market.
If you are too much fearing to lose your money then avoid the share market and invest in FD, Bonds, Gold. if you are little fearing to lose money also want good returns then invest via mutual funds. and If you want to learn the share market then invest yourself. but if you are beginner first read, gain knowledge about the stock market then go for investment. You can read this book The Intelligent Investor by Benjamin Graham.
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