“Hey, don’t you know it is not safe.Its fraud.”
“Your moneywill be lost, its not our cup of tea. It’s a scam”
“Beware, Iknow people who lost money there.”
These aresome blind advices you will get when you invest in Stock Market, especiallyin India. With all due respect, I am not defaming India for this but it’s a fact. Ipersonally experienced this. On the contrary, there are so many people here thatsupport you who are well aware of the potential benefits of trading in the stock market.
Yes it istrue, you can lose money there. But you can also make profits. These advicesare good to some extent, but one cannot be prejudiced about it.
Like all other good investment opportunities be it fixed deposit, gold, or even real estate, stock market investmentis also a viable and profit-grossing option. And this comes under the“Must Try Investments Option” if you are planning to actually multiply yourwealth within any time period of your preference.
The casewith Stock Market is you cannot invest in it without basic knowledge. In fact, one should never start investing in the stock market without doing adequate research and planning.Otherwise, the above advice will turn out to be facts in your case and you will end up losing money.
Do someresearches and study the basics of the stock market. Nowadays, we are just a fingertip away from the vast sea of knowledge as Google, YouTube, and other means are open to you on your mobile and PC.
To know about Stock Market and its working read my previous article about it. (read here)
Whyshould you Invest in Stock Market?
The basicreason to invest is to multiply our wealth or in other words to increase oursavings. To attain the goals I have mentioned above, we have multiple options. Like FD, gold,property, etc. The amount of technical knowledge required to invest in such options is minimum to nil compared to what is expected in stock market investments.
The first and foremost thing to be kept in mind is that investing in the stockmarket is a way to grow with your country’s economy. Because the stock marketsin a country are listed with companies that are having business in that country aswell as other countries. So, the stock market can always be correlated to acountry’s economy and acts as an index of the economic stability, GDP, jobs, andall other such factors and react to it.
Moreover,the stock market allows us to take pride in being a small investor in leading and reputedmillion-dollar companies, how fascinating…isn’t it?😉
One otherinteresting example and experience I can give you is us getting a part of theprofit from the company that we depend on and purchase some products or services.
For example,consider you are using a Jio sim and recharging a 500 rupees plan every 3months. If you could buy some Reliance Industries Limited (RIL) shares that areaffordable for you, as the company progresses the share price increases and youwill be reaping some profits. The hidden thing is you are also a person who ishelping Reliance progress by using a Jio sim and you are getting a part of thecompany’s progress from the shares you hold.
To know key pointsof 44th Reliance AGM read here
If your thought processing is similar to the above scenario, it’s a sign ofgood investor. Because at this point you realize that it is good to invest incompanies that produce products or give services that you and most of thepeople you know depend frequently.
Also, your style of purchasing starts to change, because you will start tocheck the products to find out their manufacturers and whether you have a share ofthe company. I can give you another scenario for this.
Considerthat you like Maggi noodles and you purchase it sometimes. Maggi is the productof Nestle which is having a high stock price. Consider you cannot afford Nestleso you bought ITC. Now that you have ITC share you may think to buy Yippeenoodles which is an ITC product. Thus, you ensure that you are helping the progressof the company you hold to get some profit.
Trust me…. Youwill think like this if you become serious in the stock market and start investing.So, a stock market investment actually allows you to have a differentperspective in life and gives you a chance to make your investment grow more byyour actions itself.
Apart fromthese scenarios depicted above it is not that much easy to invest in the stockmarket as you need to be technically good to understand the charts and do youranalysis and to do the fundamental analysis about a company to understand itsfuture potential.
It is noteasy to be good in the stock market but it is not that difficult either. All it needsis some effort and dedication and a will to study the basics. Also, by applyingsome common sense and staying up to date with the market trends by watching the news and analyzing it, you can easily pick some stocks.
If you are less interested in being a think tank with your savings in thestock market, then you can consider Mutual Funds. There a brilliant fundmanager will intelligently use your money to get you a good profit. The only thingis you have to pay a good amount as commission. Even with that also a mutualfund returns are highly appreciable.
Is StockMarket Safe?
YES! We know. The mainreason that there is a belief that the stock market is not safe is because of someinfamous scams like the Harshad Mehta scam 1992, Satyam scam, Karvy scam, etc. and some corporatefrauds like Vijay Mallya, Nirav Modi, etc.
All theseare facts and cannot be hidden. Yes, there are risks, but we cannot generalizeit as unsafe because ofsome rare mishaps. In fact, such scams have forced us to implementstringent regulations to reduce the risk of investors, making our markets, asafer place to invest.
The Securities and Exchange Board of India (SEBI) is a regulatory board under theMinistry of Finance in India for securities and commodity market in India. So,things are not light here. SEBI monitors the stock market, its activities, andits participants. It amends and creates new policies and rules for the smoothand safe running of the stock market in India.We cannot ignore the fact that SEBI is one of the most stringent and secureregulatory compared to all other countries. The more recent GameStop fiascothat shook the US Markets will never happen in our country due to the strictpolicies and rules SEBI has put forward.
Like SEBIevery country has its own regulatory board for safeguarding the securities andcommodity market. Therefore, the word unsafe is not apt in the stock market.
It is the inexperience of investing in the stock market without understandingit, that leads to your failure. Not all stocks are good to invest in. The time andprice range to invest is also a factor. Not all stocks which are having a verylower price can go up. Also, not all stocks having a good price can go up only,it can plummet with any warning.
Understandingthese things are what we need to figure out which can de be done by some dedicatedstudying and researching. Watching the stock market or some specific scripsalso gives an idea.
A lot ofgroundwork should be done with great commitment and dedication but eventually, it will pay off. Yaa… it's your hard-earned money that you invest so no problemfor dedication and commitment, I guess.😜.
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Disclaimer: I am not a SEBI registered analyst or a highly successful investor. I am a beginner still studying about it. Decisions you make are solely your responsibility.
