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"Why Investment in Stock Market is better than any other Investment Methods"?
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We have already explained in our previous post that how you can earn Securely from Stock Market within 10 Days. This required minimum investment and highest returns where not much technical knowledge and experience about the stock market is required. More than 50% of Returns in just 10 days through an IPO is the best scheme in Stock Market. Those who are beginners, they can check out the post and learn about this method in a detailed manner. The link is here: Best Way to Invest in Stock Market
Today we will tell you "Why Investment in Stock Market is better than any other Investment Methods"? We, Will, explain this with proper Examples. Let's get started:
Most of the people in India invest in Fixed Deposits, Public Provident Fund, Life Insurance, Post Office Saving Schemes, etc. because these schemes provide Risk-Free Fixed Rate of Interest, these are Government approved schemes where chances of loss of investment amount are Zero percent and this doesn't require frequent inspection in investment (Just Invest and forget for the year)
Let's Suppose you have invested your earnings in the following Places:
The FIXED DEPOSITS provides you a return of less than 5% a year. People invest in these places because they are safest and there is no market risk involved. It confirmed that you will receive 5% of Interest whatever the market & financial condition of the country is.
Example:
PUBLIC PROVIDENT FUND provides the annual rate of interest @ 7.1%. This is a bit higher than Fixed Deposit but still, there are some conditions such as The lock-in period in Provident Fund is 15 Years, compounding of interest is annual, etc.
For PPF Calculator: Click Here
Example:
LIFE INSURANCE is not an investment. We can say that it provides a Death/Handicapped Benefit in the case when you will not able to provide financial support to the family. In LIC, we only receive some Bonuses and Interest Portion which is not that much as compared to FD.
Example:
If you invest a Monthly 15,000 in a LIC Plan, after the year of 15 months, you will only be going to receive the following:
People invest in LIC because it only provided the Deat Benefit & Provides you the amount of sum assured in case you will not able to pay the premium.
These are the most traditional Investment methods adopted by most Indians. But as you saw that the rate of returns in these investments is not sufficient to cover up the Inflation rate and future value.
Benefits and Losses of adopting Traditional Investment Practices:
Losses/Drawbacks:
Now Comes on our main topic which is:
Why Investment in Stock Market is better than any other Investment Method?
Indian Stock Exchange Consists of a combination of various Institutions such as NSE, BSE, CDSL, NSDL, etc. Its one of the biggest Stock exchanges in the World after the New Your Stock Exchange. Approx 14.2 Million new users have joined the Stock Market in Financial Year 2020-21. The rate of expansion in Sock Market users is because of the COVID 19 Pandemic. When there were free times, people used to learn about Stock Market and earned so much profit.
We are not here to introduce NSE & BSE which you can click here to know more: NSE & BSE
Our main purpose is to introduce and inform you about the benefits of Investment in Stock Markets than investment in Traditional Investment Practices. Now comes to the point where we will Discuss the returns in Mutual Funds & Investment in a Particular Stock for 10 Years in an Example through which you can compare Traditional Investment Practices and Modern Practices and choose the best one for yourself.
MUTUAL FUND is the method through which you can Invest in Stock Market with minimum monthly SIP (Systematic Investment Plan) just starting from Rs. 100 p.m. Mutual Fund Houses have experienced professionals who invest your amount in Profitable Places and provide you a good amount of return from Day 1. The return of investment in a Mutual Fund goes to more than 100% but in most cases, it will provide your annual rate of return @ 20%.
Note: Just to make sure you Invest in Quality Mutual Fund Scheme!
Let's understand the Return on Mutual Fund (for 10 years) through a chart:
Benefits of Investment in Mutual Fund:
INVESTMENT IN STOCK provides more returns than Investment in Mutual Fund but it requires a daily eye on the stocks. But there are also several stocks available in the market in which you can invest securely and earn amazing profits in a certain period of time. Let's understand it with a Chart:
Now you can understand how beneficial is Stock Market Investments. We can make lots of money in just a short span of the period just need to Research a little and consult with an advisor before investing because Investment in Stock Market is subject to market risks. The rate of returns may differ because of the Market Conditions, Financial Positions, Companys Activities, Government Policies, etc.
So, Think twice next time about which investment method will be suitable for you and which can provide higher returns so that you can increase your wealth.
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