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Why Choose toInvest in Equity Market?

Equity Market is synonymous with the share market. Investing in share market (investing in a company’s share) is like owning a tiny part of the company. Investments are never risk-free. So, this is true in the case of Equity Market investments too. But the average profit margin is so great that it attracts more and more people towards equity shares every day. While investing in debt funds and money market instruments are generally considered safer options, the gain percentage is also lower than equity shares.

Equity Market shares are traded either in exchanges or stock markets. Securities bought and sold in equity market can be both public stocks and privately-owned stocks. Generally, privately-owned stocks are sold and bought in stock markets rather than in exchanges.

Trading in Equity Market is like bargaining. The seller quotes a price, the potential buyer offers his best price, and then they both agree on a price,and the transaction is done.

Equity Share Trading in India

Equity Shares are traded in India in two stock exchanges- NSE and BSE.

NSE: National Stock Exchangewas established in 1992. It is the first demutualised electronic exchange in India.

BSE: The Bombay Stock Exchange is the first ever Stock Exchange established in India and Asia. It came into existence in 1875.

Debt vs Equity

Before deciding upon picking one between debt and equity, it is vital to know their differences and their uniqueness. There are both advantages and disadvantages of choosing debt over equity. So, you can choose either one that best suits your financial background and personal preferences.

Why choose Equity over Debt?

Debt securities are less risk-bearing than equity securities, the market is less volatile, and your chances of making profit are higher. The debt market does not fluctuate as much as equity. Butdebt returns can't even touch the returns that equity can offer. Of course, the opposite is true as well. The chances of losses are also as high as profit. Besides, when you purchase a share of a company, you become a part owner of that company, no matter how small.

Your decision of choosing between debt and equity also depends on your financial goal. For short-term goals and their fulfilment, debt securities are better. They offer little more return than bank fixed deposits. As your money is investedfor a short time, the risk of huge market change is low. However, when it comes to long-term as well as bigger financial goals, you should opt for equity.

 They often show aggressive growth (20%/year in an average) and can potentially return your money manifolds. As they are invested for long periods, the chances of the markets going up and down are higher. If you are capable of taking risks, you should go for equity.

However, according to recent trends and updates, experts have advised investors to follow a 6-month staggered approach while investing in equity markets. The nifty 50 indexesare considered to be on the lower side in the near future.
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