Is Investing in Stocks a Good Idea in India?

Yes, Investing in stocks is a great idea given you know what you have to know. The top ten reasons to invest in stocks as opposed to any other investment are as below.

Great Potential for Long Term Returns

Although many people throw the stats of the long term returns of Indices like Nifty or Sensex and brag about Stock Market. Of course it is true, but with a slight refinement in your stock picking strategy, you can increase your returns by many folds.

Liquidity (Convenience)

Although your price of stock won’t remain the same but stock market offer great liquidity than any other financial instruments. And of course, if you pick an illiquid stock I can’t do much.  FD can’t provide the same, on top of that they will levy a penalty if FD is broken before the maturity date.

Dividend Income (Passive Income)

Some Bluechip stocks are known for their Dividend Payouts. One can earn a handsome passive income while your stock price is also growing side by side.

More Tax Savings (Comparatively)

Investors can save taxes by ELSS Instruments (Section 80C) which are actually backed by Stocks. Alternatively, one can invest in stocks for long term for a reduced tax on gains. 20% Tax on Long Term Capital Gains on Stocks whereas 30% Tax on FD Interest.

Loan the Shares (Additional Income)

If you choose to be a long term Investor with substantial holdings in the Stock. There is also a provision to loan your Shares to Short Sellers and earn extra income.

If you’re thinking about stepping to Stocks, this is the right time (recession time), you will get a lot of good stocks at very cheap prices.

No Brokerage Account yet? I’d recommend you to SignUp with Zerodha or Upstox given the low to none brokerage amount they charge as opposed to Big Houses like ICICI Securities.

Additional advice, If you’re into Investing only better go with Zerodha, since delivery trades are free on Zerodha. If you want to give it a try to Trading as well better to try both and stick with one, as features like trailing stop loss matters a lot in Trading, which Upstox only provides as of now.

Ref: Difference between Intraday and Delivery Trades

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