When it comes to investing in the stock market, there is no time like the present. Whether the market is soaring or crashing, there are always great opportunities to take advantage of and start building a wealthy portfolio. The earlier you start, the more your investments can grow. Unfortunately, younger investors hesitate to put their money in the stock market in their early earning years. It may be due to a lack of knowledge, exposure, or risk-taking ability; but it costs you all the same. If you are also hesitating to start your stock investing journey because of any of these reasons, then this piece is for you.
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6 ways in which early age investors can truly benefit from investing in the stock market are:
1. You can start small
Investments in the stock market have the potential to earn you millions, but that doesn’t mean that you have to start big. You can invest small amounts and slowly build your portfolio. With online investing, you can decide the smallest amount you want to invest in a particular stock and complete the trade. There is no minimum investment value or cut-off as is the case with other investment instruments.
2. You can take measured risks
If your risk appetite is low, then you can start investing in low-risk stocks offering low returns. Once you feel confident, you can invest in stocks with more exposure and better returns. The choice is completely yours.
3. Enjoy the power of compounding
Starting stock market investment also lets you enjoy the power of compounding. As the Sensex grows over the years, stocks that you bought low, may grow manifold. Furthermore, over a longer period of investment your risk also gets distributed.
4. Create wealth with superior returns
While online investing in quality stocks can yield returns between 12-17% annually, online trading may give even better returns. As you learn to select and invest in quality stocks, your net portfolio returns can be much larger than any other asset category.
5. The entire process is online
One of the reasons that early age investors find stock market investing intimidating is because they have had bad experiences with branch banking. With the fintech revolution and digitalization of most AMCs and brokerage houses, online trading and online investing are easily possible.
From the point of setting up your Demat and trading accounts to making your first stock investment, the entire process can be done digitally. This gives you complete control over your investments, real-time information access, and complete transparency.
6. You can divest any time
Lastly, your stock investments can remain largely liquid as you can divest anytime using your online investing platform. Although your wealth creation potential remains highest when you stay invested over the long term, you can always fulfil your financial goals by divesting from profitable stocks.
In conclusion, early age investors can benefit greatly by investing in the stock market and starting as early as possible. With online investing and online trading, you can take your time to learn, start small, and steadily grow your portfolio to achieve all your financial goals.