The main objective of investing into the stock market is to ensure that each and every individual is able to fulfil its desired financial goals. However, rise in the inflation makes it inadequate for persons to earn and save some part of their earnings. To defeat the rising inflationary prices, investment becomes very important. Therefore, stock market is one of the oldest and most popular investing options for fulfilling your desired goals because of the following reasons:
Importance of Stock Market Investments:

• Higher Liquidity – Stock market has two major exchanges, National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). Stock market investment provides higher liquidity because large volumes of shares traded in these exchanges. Therefore, investors can buy or sell any product on the stock exchange which makes it an highly liquid counter for investment making.
• Diversification – The stock market offers variety of financial instrument for investment, such as shares, bonds, mutual funds and derivatives providing investors a wide range investment products for investment. This provides investors the flexibility benefit in mitigating the risks inherent to stock investing by enabling diversification of investment products.
  Investors can not only diversify their product in different asset classes but can also diversify their investments in equity markets by creating their equity portfolio and invest in various sectors of the market which will help them to reduce their risk and achieve their goals in less time.
• Higher Returns – Compared to other investment products like bonds, fixed deposits, gold etc, investments in stock market provide investors an opportunity of generating higher returns in shorter time horizon. Sticking to the basics of the stock market, such as planning the trade, using stop-loss and booking profits on time, doing research and due diligence, and being patient can significantly reduce the risks inherent to stock market investing and maximize the returns.
• Ownership – Acquiring ownership in the company in which the investor invests. Investors acquire a portion of ownership in the company. This ownership provides the investors the right to vote and offer its contribution in the decision making of the company. Holding the investments for long duration in the company having strong fundamentals and good corporate governance gives the investors the benefits of various corporate actions like dividends, bonus issue, stock split, right issue etc.
• Regulatory Framework – The Indian stock market is regulated by the Securities Exchange Board of India (SEBI). SEBI has the responsibility of regulating, developing and protecting the rights of the investors. This means when investors invest in the financial products on the stock exchange, their interests are well-protected by a regulatory framework. This helps in reducing the risks due to fraudulent activities in the markets.
• Convenience –Technical development has influenced every aspect of modern living. The stock exchanges are also using various technical advancements to provide greater convenience to the investors. The trades are all executed on an electronic platform to ensure the best investment opportunities to investors in an open environment. In addition, broking service providers offer online share trading facilities that make investing convenient, because investors can place their orders through a computer from the comfort of their homes or offices. The demat account makes it easier for investors to hold all the products within their investment portfolio electronically in a single location, which makes it easier to track and monitor the performance.
• Economic Contribution – Investors investing in the stock market are not only investing in the company’s business but also making contributions towards the economy. Since the companies listed on the stock exchange represents the various sectors of our economy such as Banking, Finance, IT, FMCG, Auto, Metals, Energy, Realty, Pharma etc and hence investing into these companies provides them the investment required for their business expansions and development. Hence, these companies help in the economic development of the country and thus helps in creating the wealth for the stakeholders. Therefore, investing into the stock market indirectly means making contribution in the economic development of the country as the stock exchange represents the economic status of the country.