5 Benefits of Buying Shares

Returns from the shares have not been so encouraging in the past decade and this has created an atmosphere of distrust among people. However, before reaching their decision, people forget to take all the sides into considerations. This article will show the 5 benefits of buying shares so that an informed decision can be taken while purchasing shares.

1. Investment gains

The primary benefit of buying shares is its amazing returns. Shares give the opportunity to raise your money like no other alternative. The share of individual companies keep on rising and falling on a day-to-day basis but if you take a sound decision and invest in a company with a stable growth, you will surely attract a lot of investment gains. Let's consider the example of HDB shares to further establish this point. The HDB share price was USD 37.68 in 2013 and 5 years later, the price of this share currently around USD 95. This shows that HDB share price increased consistently over the years, giving its investors significant gains over their investment.

2. Diversification

There are a number of avenues where you can choose to invest your money and usually people select multiple such avenues as a strategy to immunize their investment. Buying shares can be a great place for diversification investment since their price changes independently from other forms of investment. Furthermore, as the earlier points states, if invested wisely, this share of investment can give much greater results relatively.

3. Gives you immunity from inflation

One of the advantages of investing in share over cash savings is the immunity that it provides from the inflation. The valuation of cash savings can get reduced significantly due to the rising inflations. However, this thing does not usually happen with share prices since they rise much faster than the inflation rate. In this way, shares become a constant share of income generation.

4. Ownership benefits

By buying shares, you are getting a particular percentage of the company. Thus, the percentage of your ownership is determined by the number of shares you possess. Being a shareholder of a company gives numerous benefits, such as, having a say in the company's decision and having a vote on company's next board member.

5. Dividend income

There are some shares that can give you profit by providing dividend income. The companies that offer this facility, provide dividend amount in form of annual payments. This form of investment can act as a means to multiple ends, such as retirement, enhancing investment portfolio, and so on.

Read above article useful information & knowledge for you.