Tata Motor Stocks
Tata Motor Stocks
The Rationale Behind Stock Market Investment
Do you dream of becoming rich overnight? Are you looking to retire and travel around the world? That almost sounds like a script straight out of an infomercial right? Do you want to own a pie of profit-making companies like Tata Motors, Infosys, RIL and others? If yes, then you must opt for investing in stocks. Of course, you would end up losing a lot of money too.
Here are some of the key benefits of investing in stocks.
• Building wealth: The fastest way to build wealth, besides winning the lottery, is to successfully invest in stocks. It has been seen that over a long haul, stocks have given stupendous returns. In fact, they were responsible for the creation of legendary investors like Warren Buffet. But this is possible only if you invest in good stocks and hold them for a long term.
• Beat inflation: Inflation is the main culprit that erodes the wealth of many people. Inflation leads to the erosion of the value of money. This means the value of Rs. 100 when the inflation rate is 8% will be lower when the inflation rate is 12%. This means your money has lost its value when the inflation goes up. But stocks tend to overcome inflation, as the companies hike their product prices to compensate for the increase in inflation. This helps them to maintain their profits, which is then reflected in the stock prices, which go up. Consequently, your capital also appreciates, thus helping you beat inflation.
• Company ownership: Stocks make you a part owner of the company. This allows you vote in the company’s meeting. You get a share of the company’s profits in the form of dividends. As the company’s wealth grows, your personal wealth will also grow.
• Other financial benefits: Companies regularly announce stock bonuses, stock splits, rights issues and other benefits for their shareholders. All these benefits allow you to get additional shares either at zero cost or at nominal rate. This in turn will help you in increasing your wealth.
• Tax benefits: Dividends that the company gives you is your additional income but the best part is that, this income is tax free in your hands. So you end up getting additional income without having to pay any tax on it. (Find out about Dukascopy Forex Trading Platform. Also make sure to visit Easy Forex.)
• Saving of capital gains tax: When you buy a stock at the price of Rs. 100 and sell it when the price is Rs. 150, you have made a capital gain. Now if you sell it after a year, you will find you have to the capital gains tax at a lower rate than if you sell it before a year. On the other hand, if you have made a loss, you can offset it in your tax returns and thus reduce your tax liability.
The secret to market success is to start early and hold for the long term. You will see your wealth go up manifold, if you follow this tactic. Also invest in financially sound companies to ensure your capital keeps on appreciating over a long term. Lastly, don’t be swayed by the market rumors floating around the stocks you have invested in. Instead do your own independent research.
Tata Motors adds nearly 23 lakh shares in open interest
