Investing in the stock market is not a walk in the park as a lot of things have to be taken into consideration. It might sound intimidating if you happen to be a newbie as far as stock market investing is concerned. The reason being the stock market is fairly unpredictable, and you can lose money. But stocks have definite advantages when you compare it to other investment types. A combination of all these benefits could turn out to be an important aspect of a valuable portfolio. In this regard availing the services of an online stock trading platform might be a right step.
High return
Firstly stocks work out to be risky investments. It means there is no guarantee on your investment and you might lose money. But in the long run, a stock market tends to move upward. As compared to any long term investment module, stocks have the highest investment return. As per estimates, the stock market has grown over an average of 10 % in the last 50 years. Once you compare it with bonds the growth rate is 5% on a yearly basis. If you are able to cope up with the market swings, the highest return on your investment can be obtained on the stock market.
Liquidity
The stock market can be compared to a large auction house. Each day the investors are buying or selling their shares. This makes the stock a liquid investment. If you want steady cash there is no better option than a stock market. With other assets, they are difficult to sell. Suppose if you have invested in a real asset it might take years to find a prospective buyer. In the case of stocks, you can locate a buyer the next day.
Delay on the taxation front
Stocks are known to delay fixation on your returns. If you purchase a stock and its value shoots up, there is no need to file a return on its earnings. Even when you sell stocks on a profit it is necessary to report the stock gains. If you lose out money on a stock you can purchase another stock and make it up as far as stock gains are concerned. Suppose if you are planning to put your money in a fund that earns interest in the form of a bank or a bond, you have to be paying taxes on your earnings every year.
Information
In relation to any information that emerges from a stock market, it is watched by the entire world. If a company is looking to sell their stocks at a public platform then they have to showcase it in the long run. The statements could give you a fair belief if the facts about a company are true. You are able to conduct systematic research in relation to your stock investments. No other form of investment is expected to provide a lot of information making it harder to be making an informed decision.