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Why equity is good investment for wealth creation? Why one should invest in shares ? Why equity can is better than FD? Investing, Shares, Stocks, Inflation, Compounding, Tax saving, High returns<br>
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Reasons of Why you Should invest in Shares #4
What are Shares Shares are a part of ownership of the company. So shareholder are known as the owner of the company Shareholders get voting rights and participate in the profits earned by a company Investments in shares are risky but the rewards are high (investors get dividend and increase in price of the share)
# 1 Reason Returns Last 5 Year Returns 35.0% 32.5% 30.0% 27.4% 24.6% 25.0% 18.7% 20.0% As returns comparativelyhigher than seen from on the graph, are 15.0% 8.6% 9.5% 8.7% 8.7% 8.8% 9.5% 8.5% 8.5% 9.0% 9.0% 7.8% Shares 10.0% 6.0% 4.8% 5.0% 0.0% -5.0% -3.7% • Fixed Deposit • PPF • Gold -10.0% -10.1% -10.4% -15.0% Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Sensex Gold FD PPF
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# 2 Reason Tax The returns earned on Shares held for more than one year are Tax Exempt Dividends earned by an investor are Tax Exempt Shares Tax free if Sold after 1 year. 15% tax in case sold within 1 year of Purchase Equity Mutual Funds Tax free if Sold after 1 year. 15% tax in case sold within 1 year of Purchase Debt Mutual Funds 10% Tax if Sold after 3 years. If Sold within 3 years then as per Tax Slab of Investor Fixed Deposit Tax on Interest as per Tax Slab of Investor Bonds Tax on Interest as per Normal Income Slab For Detailed Analysis refer our Taxation page
# 3 Reason Inflation Inflation vs Sensex vs FD 30% 25% Present rate of inflation is 6%. 25% 20% 19% delivered 11.9% • BSE Annual Return in past 5 years Sensex has 15% 12% 11% 9% 9% 10% 6% 8% 5% 9% • Comparatively returns on FD after adjusting for inflation is~2% which is very low 0% 2010 2011 2012 2013 2014 -5% -10% -10% -15% As you can see in Chart , Shares provide an excellent protection against inflation and are very beneficial in the long run Source: AdviseSure Research Inflation Sensex
# 4 Reason Liquidity Shares are the most highly liquid instruments in the market Shares/Gold Highly Liquid. Debt / Equity Mutual Funds Highly Liquid Bank Fixed Deposit Highly Liquid Saving / Current Bank Account Equal to cash Corporate Fixed Deposit Moderate Liquid Property Illiquid
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