InvestorQ : Why do people invest in the share markets? What are the benefits?
Ria Roy made post

Why do people invest in the share markets? What are the benefits?

Rutuja Nigam answered.
3 years ago

Did you know that Rs.10,000 invested in Wipro in 1980 would be worth Rs.550 crore today? (Yes you heard it right). Or if you had invested Rs.1 lakh in Havells in 1996, it would be worth Rs.35 crore today. That is the kind of wealth creation you can get by participating in equities through the share markets. Wealth Creation is one of the main reasons why investors prefer to invest their money in the stock markets. It gives them the opportunity to own leaders of tomorrow. Take the case of shareholders who had bought Infosys in 1994 or Bharti in 2002. These stocks went to become industry giants in the subsequent years leading to tremendous wealth creation. People also invest in share markets to reduce the risk of their portfolio.

For example, if you have a lot of money in bonds or gold, you need to spread your risk. The stock market is a good place to spread your risk gradually. Investing in the stock market has become very easy these days with the advent of online trading and online demat accounts. Also, you can even buy or sell just 1 share of a stock and the investments are liquid. You can access your money any time in less than 2 days so the problem of illiquidity is not really that big. Lastly, if you are conservative and want to earn regular dividends then also equity can be a good choice for you. It is these benefits that have pushed investors towards equities.