Stock market investment: reliable or bet
There is an old metaphor that says, “Money makes money.” This can literally be applied today to the generation of capital through investment in the stock market. Generally, people have savings in the form of cash or jewelry. But it won’t do any good if the economy suffers from inflation or if the value of the currency falls. So what can be a safe investment that is reliable and productive? Well, the answer is investing in the stock market. The stock market is part of a system in which companies or shares of listed companies are bought, issued and sold. But for some people it’s no better than a dark abyss and a hazy casino of gambling savings. Contrary to common thinking, the stock market is a much better investment option than classic investment areas such as time deposits and gold bonds.
Basic concepts that one must learn before starting the investments in the stock market
It is such a pain to lose money and that is why no one wants to lose their savings accumulated through hard work. Also, some people have a higher investment threshold than others. If a person is considering diverting their savings as a stock investment and is upset about the loss that could occur, they should not have invested in the first place. However, before investing one must have a clear mind on a few things.
Here an investor sells any particular value of his property as well, another who is interested in buying it. Since both investors cannot be absolutely correct, it can be called an adversarial system. For a better understanding, we can assume that one investor will make a profit and the other will definitely suffer a loss.
The opinion of the main investors, natural calamities, political and social instability, supply and demand, risk and the abundance or lack of alternatives. These factors are compiled with the relevant published information, which creates an overall sentiment (ie bearish and bullish) thus influencing the corresponding buyers and sellers.
The real profit is found in the gradient of buying and selling prices of a stock. The best time to buy is when other investors are bearish. At the same time, the best time to sell is when other investors are bullish.
Pros and cons of investing in the stock market
Just like any other investment option, the stock market also has its advantages and disadvantages.
Advantage
1. Great opportunity for extremely good returns in a short period of time.
2. Minority ownership. It may seem like an exaggeration, but putting money into the shares of a reputable company also makes the person part owner of the company. It doesn’t matter if the investment was big or small.
Disadvantages
1. Brokerage of commissions. Every time a person trades his stock, he becomes responsible for paying a certain amount to the broker’s commission and kills the profit margin.
2. It is very time consuming. Investing in the market is not the same as putting money to win a lottery. Here one has to comply with multiple paperwork, so it becomes slow.
