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Why should a person invest? What are its merits or demerits? (Can it be taken as an employment opportunity?)

Why should a person invest?

Well, most people tend to keep their saved fortune in Banks, in a vastly developing countries like India, only a tiny percentage of people tend to invest in mutual funds or share market, most people keep their saved amount to a bank (FD), knowingly, that it would grow in an annual rate of 6-7%, where as, in share market that actual increment of the invested amount could be much more higher than that. A well computed share can grow at an annual rate of 20-30% or even much higher. The potential of the share market is way more better than that of conventional banks.

Now, let's talk about the merits:

The first point would be, as discussed earlier, Returns: A well calculated share could generate more value to the invested amount than that of conventional banks.

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Secondly, Inflation: is a real deal for tremendously developing economies, such as India. It reduces the purchasing power of the hard earned money, if it does not grow with the emerging inflation rates. Share market can be used as a security for that.

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Thirdly, Retirement: A lot of people who are salaried after getting retired, get into a pool of burdens, to ensure a better lifestyle, proper investment can be considered to be the best opportunity.

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Fourthly, Early Retirement: Most people do have financial goals, whether short term or long term, for the long term goals, one has to work for a full employment age. But with a proper investment plan one can reduce that to a very early age. On a long term one might save enough from the up-trends and make the share market a tool to practicalize the future goals.


Lastly, Employment: We consider it to be the most valued point. It's true that the share market is not seen as a conventional way for employment, but it can be taken as. For instance there are several jobs that are linked to the share market, such as, financial advisor, stock broker, stock analyst, etc. But for being a professional investor one needs enough capital to invest, thus, investment capital should be the one which the investor wouldn't need to pay-off the necessities.

Demerits of the share market:

Now, as we all know there are also certain demerits of the share market, as we can all relate, every positive side also has certain negative edges. Share market isn't an exception. With the market losses due to global factors, such as, the ongoing Ukraine-Russia crisis, covid-19, global inflation, repo rates hike, market lock-down etc., retail investors can also lose their invested amount.

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Thus, the most practical way to get the best value out of the market is by having long term goals and by dividing the portfolio with small-cap, mid-cap and large-cap companies. By this one can have the best of each sector.

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