Investors, especially those who have not yet invested in stocks are often tormented by the question, "Is the Stock Market Worth Investing?". On one hand they are anxious about investing in stock markets, having read or heard about high risks, but on the other hand they cannot ignore stocks as the returns they are getting from fixed deposits from banks are paltry and are eroded by inflation.
Risk is inherent in every financial instrument, and stocks are no exception. Is it not a huge risk to save lifetime earnings in low-return bank deposits/ public provident fund (PPF) accounts, only to find that the accumulated savings are not adequate to sustain one's lifestyle post retirement?
Electricity, which is such a universal, versatile and useful form of energy, can be highly risky if not handled carefully, but do we or can we avoid using electricity in our everyday lives?
Warren Buffett says, "Risk Comes from Not Knowing What You Are Doing", and he cannot be wrong for he has risen to the position of worlds second richest man, primarily from the stock market!
There is no doubt whatsoever that and is the only path for generating significant and enduring wealth.
Long-term 'Value Investing' is a sure and safe path to financial freedom and lasting riches.
However, investors are advised not to dabble in stocks blindly.
I read this book and it changed my life and I am sure it will change yours too!
Two Ways to Invest in Stock Markets:
- Direct investment in stocks of a handful of excellent companies that reward investors with bountiful dividends and long-term capital appreciation.
- Regular investment in low-cost, well diversified, equity/ growth, index mutual funds/ exchange traded funds.
Recommended further reading:
I have answered similar and related questions many times before and instead of repeating them, I shall link you to such articles below:
In conclusion, the answer to the question, "Is the Stock Market Worth Investing?", is an emphatic and big YES!