Why Should You Consider Investing in the Stock Market?

Power of compounding

When it comes to investing and understanding how wealth multiplies, the concept of compounding has a huge role to play. If you let your investments stay for a long time and let the interests compound, you will reap good results and will get one of the best benefits of investing in stocks. This is one of the main reasons why you should consider investing now if you have not done it yet.

Win The Race Against Inflation

Inflation is a definite hurdle when it comes to wealth creation and hence, choosing avenues that beat inflation is the only way to grow rich in the long run. Say an investment gets you 6-7% returns every year but the inflation rate itself is 5% or so.

Fixed Returns are Boring

If you are wondering why to invest in stock markets at all, the answer is that fixed returns can get boring as there are other places where you can get a better value for your money. Traditional products like fixed deposits or recurring deposits are safe instruments but also give fixed returns for the investment tenure. While stocks are aligned with the markets and can give you double-digit returns in its good days as well, traditional products will give you a set fixed number on all days. So dividing a portion of your assets into accelerated wealth-creating instruments like stocks can help you reach your goals faster with the same investment amount.

Mitigate Your Risk

Experts say don’t put all your eggs in one basket. The basic ethos behind this saying is to always settle for a diversified investment. Although you can't, put an end to risk, but it has been proven that you can always reduce it. This can happen only when you diversify your investments. Even if one of the markets underperforms, the other ones will take care of your money. This way, you can balance the portfolio. Back in 2008, when you would invest money, it would take a decade to get the money back.