Stock investment: trustworthy or gambling

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 will do nothing if the economy is affected by inflation or 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 understood as a system in which companies or shares of public limited companies are bought, issued and sold. But for some people it is no better than a dark abyss and a nebulous casino for gambling savings. Contrary to common thinking, the stock market is a much better investment option than classic investment areas like fixed deposits and gold bonds.

Basic Concepts One Must Learn Before Starting Stock Market Investments

It is a great pain to lose money and that is why no one wants to lose their hard work savings. Also, some people have a higher investment threshold than others. If a person is considering diverting their savings as an investment in the stock market 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 some things.

Here an investor also sells any particular security of his property, another who is interested in buying it. Since both investors cannot be absolutely right, it can be called a contradictory system. For a better understanding, we can assume that one investor will benefit and the other will definitely suffer losses.

The opinion of large 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 (i.e. bearish and bullish) influencing the corresponding buyers and sellers.

The real gain lies in the price gradient of buying and selling stocks. The best time to buy is when other investors are pessimistic. At the same time, the best time to sell is when other investors are bullish.

Pros and cons of investing in the stock market

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 in the stock of a reputable company also makes the person a co-owner of the company. It does not matter if the investment was large or small.

Disadvantages

1. Brokerage commissions. Every time a person trades his shares, he becomes responsible for paying a certain amount to the broker’s commission and kills the profit margin.

2. It is time consuming. Investing in the market is not the same as putting up money to win a lottery. Here one has to go through multiple formalities, so it gets slow.