How Stock trading helps Indians achieve freedom?

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Most of us have certain financial milestones to meet in our lifetimes, such as buying a home or going on an extended international vacation. In the old days, people would save and optimise their budgets to ensure they give themselves a chance to achieve these goals.

While saving and budgeting hold immense importance even today, people have started using financial assets, such as equities through stock market trading, to give themselves leverage. They are no longer as excited with passive investments as their forefathers and have a higher risk-taking ability, which makes equities more lucrative for them.

The stock market has historically provided higher returns than other financial products, such as fixed deposits or recurring deposits. So, how is stock market trading paving the way to financial fulfilment for the modern Indian? Let’s dissect.

Achieving Financial Goals with Stock Market Trading

Markets can look lucrative from a distance. However, it is almost impossible to predict stock prices on a day-to-day basis. So, if you are looking to achieve your financial objectives by investing in the stock market, you must throw caution in the air and figure out what works best for you.

Here are some ways you can achieve financial fulfilment through investing in stocks –

Buy-and-Hold

While predicting daily stock movements is difficult if you are choosing them wisely, they are more likely to gain in value. Many people wait for the right time to invest in the market. But most of them often keep waiting, but the stock prices never see the level they waited for. A buy-and-hold strategy is built on the idea that a well-picked stock will ultimately gain value in the long run. So, instead of trying to time the market, it emphasises the time spent in the market itself as a more successful strategy for investors.

Day Trading

Higher risk equals higher returns (in most cases). If you are a high-risk investor, consider day trading. You buy and sell equity stocks multiple times in a trading session to benefit from price volatility. A day trader undertakes around 50 trades daily and focuses on making 0.1%-0.2% from each.

Dividend-Paying Stocks

Usually, there are two ways you can make money in the market – through capital appreciation and dividend earnings. While capital appreciation is often uncertain and can take considerable time, a company with a history of consistent dividend payouts is more likely to continue the practice.

A pro tip: Reinvest the dividend amount (that you don’t need) to get more shares and a higher return!

Index Funds

You may lack the time to keep track of your investments, but that should not be a reason for not investing. So, there is an easier way to choose instead of opting for individual stocks – index funds. These are made of a bunch of stocks to mirror a target index (say Nifty50) and allow even those with limited knowledge to make money from the stock market.

Positional Trading

Does buy-and-hold seem less convincing to you? Try positional trading. Here, a buyer expects a stock to appreciate in the long term. So, they are not worried about the short-term price fluctuations and instead focus on the bigger picture. Most of them follow a trend and wait for it to peak. Once they feel the peak is achieved, they exit and look for new opportunities.

The Bottom Line

Stock market investing is highly lucrative for achieving short-term and long-term financial fulfilment. But the key is to find a strategy that works for you and practise it relentlessly. It may seem boring initially, but unfortunately, that is how most people make money in the stock market. So, what are you waiting for? The perfect time to start investing for your financial fulfilment is now!