Advantages and Disadvantages of Investing in Stock Market

Investment in stock market is nothing short of a gamble, especially if you consider the volatile difficulties during the trading. It is the place where people buy and sell shares and during the transaction, gain profit or even lose some amount depending upon the rate of that stock on a particular day.

Dec 31, 2015 07:12 IST India Infoline News Service

With the Indian stock market going topsy-turvy even if there is a slight change at the global level, it is certainly worth considering whether you should invest your money in the trading market or seek for some reliable and safe options like bank FDs and real estate. Investment in stock market is nothing short of a gamble, especially if you consider the volatile difficulties during the trading. It is the place where people buy and sell shares and during the transaction, gain profit or even lose some amount depending upon the rate of that stock on a particular day.

Advantages of Investing in Stock Market
1. Chances of Exceedingly Good Returns in Short Time
Even in the past people have gained exceedingly good returns on their stock market investments, and you always stand a good chance to earn huge profits when you decide upon stock market investing. So, when you invest in stock market India, although you put yourself at a lot of risks, you are also in a position to earn good returns in a very short time.

2. Minority Ownership
Well, it does sound like an exaggeration, but when you put your money in a reputed company’s stocks, you become a part-owner of the company, irrespective of however smaller your share may be.  You can improve your standing in the market by sagaciously putting your money in different companies. Moreover, you can exit whenever you want.

3. Right to Vote
Minority ownership gives you the right to vote and voice your opinions at the corporate level.

Disadvantages of Stock Market Investment
1. Volatile Investments
Investment in BSE is subjected to many risks since the market is volatile. The shares of a company go up and come down so many times in just a single day. These price fluctuations are unpredictable most of the times and the investor sometimes have to face severe loss due to such uncertainty.

2.  Brokerage Commissions Kill Profit Margin
Every time an investor buys or sells his shares, he has to pay some amount as a brokerage commission to the broker, which kills the profit margin.

3. Time Consuming
Investment in NSE is not as easy as investing in a lottery as you have to complete many formalities in the process and hence is time consuming. 

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