Why Invest? Why Invest In Stocks? Why NOT Investing Stock Is Risky For You?
As to the question 'WHY INVEST?', We know it from the previous article 'OBJECTIVES OF INVESTMENT'. We understood what is investment and the objectives of investment is the ANSWER TO QUESTION WHY SHOULD ONE INVEST.
Now below you find the answer to question 'WHY INVEST IN STOCKS/EQUITIES?'
See the explanation from the image illustration below the image,
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So,
from the above image you can clearly see how Sensex/Stocks have outperformed
inflation, which is the first objective of any investment, and given higher
return over and above inflation and Bank Fixed Deposite or so called risk free
investment instrument as well. This calculation is for over 30 years. But if
you look at the history of entire stock market all over the world, equities
have always outperformed inflation and debt instruments. This is only in Indian context, but the situation is similar in global context/all over the world regarding equity investment.
So,
it is clear now that one must have investments into equities.