Why share may be a better option for you-
Have you ever thought of investing in land and property? You do believe somehow land value is going to increase in the future and it is going to give you profit while selling it. Now tell the foremost reason, why you re not buying land today, because it involves a huge amount. you can just have any land or building in a min you have to check a lot of things like deeds and previous owners, market value and purpose many things. And it is also not that easy to disinvest from it. Because you can sell it in a min you have to put some time and effort while selling it. As a student, you might not be having sufficient money to buy a piece of land by yourself.
Now shares are also some kind of property. Most of the richest people in the world do invest in shares. Now some will say they do have money that's why they do invest in a share. I am not rich enough to invest. We have to understand that, rich and middle class or lower middle class these all people do have mobiles, the difference may be that if you belong to the middle class your mobile might be cheaper that rich people's mobile phone. But in the present era, we all do have mobile phones.
shares are such property that is available at the cheapest price you can buy even a 2-3 rupee share as well from share market and some shares are trading at 80000 rupees as well.. it is up to you which class of share suits you. you might start with a hundred rupee rich people might start with a million but value and feeling of both will be same..in shares there are limitless opportunities and You can expect better return as compared to invest in any other property. However, there is a risk involved in the share market. But that risk can be managed with some knowledge and techniques to the negligible point. You will understand how in later posts.
Let us understand what are the pros and cons associated with the share market
1. Easy to convert into cash.
Shares are something which you can easily convert into cash whenever you want . your money might be not available as soon as it becomes in a bank. But it will not take much of your time as compared to other investment options.
Let us understand it with a small example. Say you have some money. First, you have to add it in your wallets like account which will be called trading or Demat account. Now you can buy any companies share within a few seconds on your fingertips buy using some mobile applications or web applications. Now if you want to sell it, you can sell it as well within a few seconds as you bought them earlier. But the money of such shares would not be available to withdraw on that day. Your money will be safe in your wallet but you can easily transfer it into your bank account the next day.
2. Can start with a small amount
Because of the huge technological revolution and competition in the market. Service providers are providing you with these Demat accounts. Has reduce minimum balance to start investing to up to rupees 100 and there is no minimum balance you will be needing to maintain your account, that means if even you have just rupee 100 in your pocket and you wanna eat one pizza you can just postpone your desire for a bit and invest that money save that money which you can use in future.
3. Keeps you updated with industries
You may have had knowledge in the industry you re investing in or you might have the interest to know about that industry. even if you don’t have any knowledge in that industry your interest gets developed on its own when you put some in it. It gives you an opportunity not just to the advancement of your carrier but to think with a broader perspective in your life.
4. Limitless opportunities
When you start investing you come to know the market serves you with so many opportunities where you can just enjoy your luck and reward of the market. Like even if news cames that a company whole business got destroyed by fire.. and everyone knows this company might not survive in the future, you can still be earning. Because in such case you will be knowing that the market is going to take their money invested in that company back.. due to which you will be knowing where the prices will go..
5. Two side income
When you buy shares, you buy a part of ownership in the company of which you buy its shares. If you own shares or ownership in the company you must get profit earned by that company. And you will get a share of profit which will be distributed by the company. This share in profit will be called dividend. But this earning is just one side.
there is a more significant side of the earning of shares. since the Share market is volatile. that means it changes frequently. when you buy shares at a lower price and sell it at a higher price, the difference becomes your profit. There will be some deductions from this profit which you can know in our later posts. But those deductions will be so small. Rest all becomes your profit.
When to deal in the short term, that means buy to sell in a short period of time. You will not be needed to have shares to sell it. That means if you came to know the price will go down, you can sell it at a higher price, then buy it later at a lower price .however this facility is not available in “delivery “. What is delivery we will discuss later .and discuss where you can enjoy this facility?
1. More risk as compared to other investment option
As we know the share market is volatile. The value of your investment increases not in a single straight line but in zigzag lines, just like heartbeats. If you sell your investment at a lower price then you bought it earlier. You suffer a loss in it.
If you invest in any company blindly and let you hold your shares in it. If because of market condition that company shut down your money invested will also sink with company
2. Might ask for attention
If you invest money in shares, the market will serve you with great opportunities to sell your shares at a higher price. You must be aware of the news and have a bit of knowledge about the company. So that you can enter, switch and exit at the right time to maximize your profit.
You might be fun to play in prices but you might face some sort of distraction from primary work.. if you invest a much significant amount in it.
3. Needs patience
Those how lack patience might sell their shares when prices are low..which might cause them loss or they might miss a part of big opportunity served by the market. When investors invest short term available funds and due to immediate requirement they have to sell it. Those you want to earn more, in the long run, have to have patience and do not panic on small short term losses.
4. Short term and long term expectations
Sometimes those who enter with expectations to earn in the long run take a big risk in the market, in the greed of money which might not be beneficiary for them. And some time to save from short term loss people raise money through a loan to create long term position on those companies which can not be expected to be run in the long run might create risk for investors.