Once you are younger saving for your retirement days may not seem to be a feasible option. This is not the reason for you to pick up the habit of saving. The more time you invest, the better chances of it growing. The best way to allow your money to grow over a long period of time is to invest in stocks. There are various forms of stocks and they are available in NSE Span margins. When you are younger you could be a little bit aggressive with your investment portfolio or even move towards the stock a wee bit.
Still the trend which is being witnessed is the younger old are keen to avoid stocks. In case if you are stock shy the following are some of the reasons helping you make a move towards stock.
Among all financial instruments stocks have the highest potential for growth
Stocks have an earning potential which is hardly to match up to in spite of the ups and downs of the market. For this reason investment in stocks is rated to be a proper choice.
Exploring the potential for a second income source
An individual has a perception that they need to really work hard in a 9 to 6 job and this is a common trend in order to secure their future. They cling on to the job and do it for the rest of their life. For such people they can create an opportunity for a second source of income in the form of stocks. Do opt for stocks that have a good dividend option.
With a small amount of money you can start to invest in stocks
The tradition among common people is that they head to a restaurant once in a week. For the entire family they end up spending around Rs 1000. This is an extra luxury that you can skip once in a month. If this extra amount of money can be saved and put in stocks you can earn enormous money after 30 years.
No lock in period and benefit of compounding
Examples in the form of a PF that has a 15 year locking period or even a NSC certificate that has a lock in period of 5 years, with stock market there is no lock in period. This means there is no time frame for purchase or selling of stocks. It is possible to hold the stocks as long as you wish and even you can sell the stocks after purchasing it within a minute or so.
With the power of compounding an investor is able to earn interest upon interest. To cash in on the power of compounding you need to explore the possibility of a long term horizon. Secondly if possible you need to start early. The key is to start investing as early as possible.
To conclude investment in stock market has enormous potential for wealth creation, but you need to mitigate the risks and adopt a careful strategy.