What are the advantages and disadvantages of the stock market?

Question

What are the advantages and disadvantages of the stock market?

umaan waqar 5 months 1 Answer 103 views

Answer ( 1 )

  1. 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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