Diversification is not limited to shares only, you can diversify and invest in real estate, bonds, mutual funds, etc along with shares and keep increasing their potential for large, rapid gains. On the other hand new comers wait for a stock price to fall more, before purchasing the stock, waiting for more time can increase the stock price and they run out of option to buy that stock on right time and price. Trading and investing in stocks is amazing, I must really confess. However if you invest in 10 different companies and 5 of them fail, even you will have 5 companies’ stock to support the loss you had from those companies failed. This follows that you should ideally be well-versed with the various pros and cons of investing in the trading market prior to proceeding with it. The holder of stock (a shareholder) then buys a piece of the corporation and has a claim to a part of its assets and earnings. Along with the facilitating purchase and sell of stocks, stock exchanges also provide valuable information such as financial results, news, updates on market rumours to every investors through their websites. Even after you gain an understanding of stocks you have to devote time every day or week to do research about your investments and businesses you are invested in, for future investment, and not everyone can afford to devote that much time unless if you are going to do it for full time which is quite rare. For beginners it is always recommended learning about stock market first before investing. So, if you invest in the stock market blindly the there is a chance of losing your capital. Advantages & Disadvantages of Investing in Stock Market, Disadvantages of Investing in Share Market, [Updated] Vodafone Idea loss decreases by 71.65% in (Q2) FY 2020-21, Laurus Labs announces dividend for (Q2) 2020, Zensar Technologies profit decreases 96.94% in (Q2) FY 2020-21, Astec LifeSciences profit increases 10.25% in (Q2) FY 2020-21, Himadri Speciality Chemical posts loss of Rs.12.62 crores in (Q1) FY 2020-21, JK Paper profit increases 1155.64% in (Q2) FY 2020-21. If a company performs poorly in its annual financial statements and having any management issue within the company then people start selling their shares because of fear and resulting in crashing down of stock price. Risk loosing investment: Usually stock markets are volatile and dynamic, investing in stocks involves its own risks, as share prices may rise and fall multiple times within a single day. ), you need not undergo the same process again when you approach another intermediary." Well-Regulated and Transparent Framework: Being a part of the global economy, stock markets are well regulated and transparent to satisfy investor's needs in terms of evaluation, pricing, disclosures to ensure that no investor runs the risk of hidden propaganda or manipulation anytime, anywhere. It means you must know the time to enter and exit a certain trade without panicking. . That means you never should invest all your money in one stock or company. Anyways, if you are new to dividend investing, let me give you a … Disadvantages of Investing in Share Market How the SECURE Act Hurts Your Retirement Planning and What You Can Do About It…, 16 ways alcohol and drinking drain your wallet, How to Save an Extra $4,187 in the Next 6 Months, A Simple 4000-Year-Old Money Saving Technology. Moreover, chances of big failure are not usual. The investors always have to keep a sharp watch over price fluctuations of stocks. By clicking on submit button, you authorize IIFL & its representatives & agents to provide information about various products, offers and services provided by IIFL through any mode including telephone calls, SMS, letters etc. (yes, not kidding). For an example current trade and tariff war between United States and China is taking its toll in global and Indian stock market as well. If you purchase a share of Rs.10 and sell it for Rs.20 that gets treated as capital gain. Lack of Knowledge: Investors who don’t have proper and enough knowledge of stocks may have to bear heavy losses. This website uses information gathering tools such as cookies and other similar technologies. Despite these efforts, the financial crisis still led to the Great Recession. 1 each share, and you have 100 shares of that company. Well, that’s why I’m writing this from the comfort of my PC — Oh Yes! This certificate demonstrates that IIFL as an organization has defined and put in place best-practice information security processes. It is at your, the user's, discretion to proceed with accessing this website. Don’t be deceived, anything can happen, besides — Change they say is constant. However, there is a very low chance of happening this all sudden but it takes several years for the market to recover from the impact of the crash. A stock market is like a strategical game where only those people win who have the proper research, analysis, learning, controlled emotions, and above all that discipline. So, if you plan to keep all your money in Savings Account and earn 3.50% rate of interest, then your money will increase at 0.07% rate per annum. Ownership: Investing in a share means having an ownership in that particular company. Advantages of Investing in Share Market Pay rapt attention! On 11th September when world trade center was attacked entire global stock market shrunk. However, common stocks are also the last to get paid upon liquidation and make it difficult to manage your investment. / Email Address to reset your password. Investing in shares could be rewarding, both personally and financially although there are risks involved. Three dead in knife attack at French church, Orient Cement profit increases 36.02% in (Q2) FY 2020-21, PTC India Financial Services profit increases 19.92% in (Q2) FY 2020-21, South India Paper Mills profit increases 218.18% in (Q2) FY 2020-21, Artemis Electricals profit decreases 97.48% in (Q1) FY 2020-21, De Nora India profit decreases 91.75% in (Q2) FY 2020-21, Tata Chemicals profit increases 78.38% in (Q2) FY 2020-21, Shriram Transport Finance Company profit increases 114.06% in (Q2) FY 2020-21, Security and Intelligence Services (India) profit increases 86.76% in (Q2) FY 2020-21. You may loose your entire investment if you are not well educated and prepared about the stock you are investing on. There are lots of brokers who charge no or very less amount of brokerage to purchase stocks. Disadvantages Of Investing In The Stock Market, Long Term Investment Tips & Full Guide! It was the breakdown of trust that occurred between banks the year before the 2008 financial crisis. There used to be people who invested in local bank stocks years ago and till date they never saw any result of their investment. Required fields are marked *. See why here. Easy to buy: The stock market has made it easy, to buy shares of companies. And if you decide to invest in stock market for the first time, then invest only amount you are willing to see as loss. You need know how to keep your calm and cool. Over time, it's the best way to gain the highest return at the lowest risk. You must grasp to read financial statements and annual reports and watch your company’s growth in financial news. Open IIFL Demat Account And Join 10L+ Happy Clients, GET ACCESS TO STOCK REPORTS+ AND TRADING IDEAS. - Issued in the interest of investors." By clicking 'Accept' on this banner or by using this website, you consent to the use of cookies unless you have disabled them. Previously, I had discussed thoroughly about Stocks and what it encompasses. Thus, it is essential to do a diligent study and in-depth research into one of the most critical aspects of business ventures — Stock Trading!