Why do people invest in the stock market
Business · High School · Tue Nov 03 2020
Answered on
There are several reasons why people invest in the stock market;
1.) In order to beat inflation.
Inflation can be defined as the increase in the general level of prices which is directly related to increase in volume of cash and inversely proportional to the value of currency. Hence inflation can greatly affect the prices of goods and products. Inflation cannot be stop since it is growing each year, and people tend to invest in the stock market in order to beat the ever-growing inflation.
2.) Increase their wealth
It is not guaranteed that you'll be a millionaire in the stock market, although with proper research and evaluation, then a person can truly increase their wealth by investing in the stock market.
3.) Diversification of Portfolio
Investors often believed that in order to attain financial independence, then one should diversify his/her portfolio by trying all sources of investments.
Investing in the stock market is a risk and it must be studied in order to optimize your wealth and avoid bankruptcy, hence as they say the higher the risk, the higher the reward, that is why some people who take the big risk often earns the most cash, and there are also some who lose cash.