For ages, trading and investment remained the income-generating resources for the elite sections of society, thus making the others the apprehensive bystanders. The scarcity of the latest technology of the present era and less awareness of financial literacy among the folks kept a major part of the population away from exploring the greener side of the grass. As back then we didn’t have a dedicated segment of the media emphasizing the nuances of stock market news among the folks.
Thanks to the wide range of digital financial services and the availability of virtual trading platforms, financial inclusion is at its peak in the country. Every individual who has an independent source of income and a quest to earn digitally can directly contribute to the ever-evolving economy of the country by investing in asset classes digitally by staying updated about Indian stock market news. Even if you earn an average income or are one of the big shots, the share market is open to all for wealth creation and accumulation.
Below we have listed some of the time-tested strategies that are safe to implement and do not hurt the wallets of those who are starting with limited capital:
A famous phrase says, “Time in the market beats timing the market”:
Which means the more you stay, the merrier the returns. It emphasizes that the stock market can generate an average gain of 10% annually, more than banks or FDs, provided you stay invested consistently without entering and exiting the market and blocking the noise of trading news that makes you impulsive frequently. Especially, leaving the market during their best performance days can jeopardize the annual return to a large extent. The best-performing stocks are the ones that increase their value over time, resulting in higher prices of these stocks and, eventually, higher returns for the investors who own them.
Go for funds over individual stocks:
With limited capital, the wise thing to do is diversify your investments through mutual funds or ETFs (Exchange Traded Funds) because diversifying with individual stocks requires a sizable amount of cash commitment, a savvy investor’s approach and a longer duration of time to do that. Investing a limited amount on a single share through funds exposes you to hundreds of individual investments.
Earn from the dividends:
While the initial amounts generated as dividends in the investment may seem negligible, investing them further can accumulate a huge amount of wealth over time. Dividends are the periodic payment that the companies pay to their respective shareholders depending on the company’s financial performance. Investing the dividends further unleashes the mighty potential of compounding, which is why Nifty 50 had an annual return of 12% initially, and it drastically increased to 16% annually when dividends were reinvested.
Stick to low initial investment:
There is no need to go overboard with your initial investments when funds are scarce. Web and mobile-based investment platforms allow investors to put in a minimum amount of funds to begin with, and build a decent investment portfolio slowly and gradually. Convenience and flexibility are two of the unparalleled benefits of using such platforms as they also help you stay afloat with the changing trends via shares news.
Capital appreciation can generate income:
For all the funds you invested in buying shares of a particular company and gradually outperformed, increasing the capital gains for you, which means you derived a substantial amount of profit from that investment if you sell those shares in future. Although the situation could have been otherwise, investors must lead optimistically.
All said and done, other factors are also crucial in gauging the returns of the investments and how one benefits from them. Especially the type of investment account one selects, there are taxable and tax-advantaged accounts with their own rules and regulations to follow. Anyway, the end goal of investment is to gain profits. With a clear financial roadmap, long-term perspective and staying updated with the latest share market trends and stock news, individuals who earn an average income can also build a stable financial future.