Top 6 Benefits of Equity Shares in Indian Stock Market | NTA

Advantages of Equity Shares

Advantages of Equity Shares

The stock market is one of the popular investment options across the world. Anyone can invest in the equity market if they have even the basic idea of how the stock market functions. However, the beginners entering the market often think that if there is any benefit of putting their hard earned money in the equities. To answer their doubts, we will list down the advantages of equity shares in this article. This article will help in understanding the benefits and potential of equity shares.

6 Benefits or Advantages of Equity Shares

  • Profit Potential

By investing or trading in equity shares you can make unimaginable profits. The potential for generating profits in equity shares is greater than any other investment avenue. By holding stocks for the long term one can make huge wealth for their future. Not only by investing but one can also make great profits regularly through intraday trading.

  • Limited liability

When you purchase equity shares, you not only become a shareholder of the company but also get right on its assets and liabilities. As a shareholder of a company your liabilities are limited only up to the amount you invest in the shares and not more than that. Therefore, any liability arising on the company will not be a liability to you beyond your investment amount.

  • Hedge against inflation

Inflation is a continuous phenomenon and the prices of various goods and services keep on rising. Equity shares act as a good hedge against inflation and even has the potential to give you huge profits even after protecting against inflation.

  • Dividend Income

Dividend income is one of the major attractions of investing in equity shares. By investing in the equity shares of good companies, you can get constant income in the form of dividends. On holding the shares for the long term, you not only get the benefit of share price appreciation but also continuous income in form of dividend. Long term investors should invest in companies having a higher dividend yield.

  • Free Transfer of Shares

When you purchase shares of a company, you become the owner of the shares. The biggest advantage of having equity shares is that you can easily transfer these shares to someone else. While transferring the shares, the transferee must ensure that the issuing corporation transfers the ownership in its books so that the corporate benefits like dividends, bonus shares, right shares, etc. accrue to the new owner.

  • Liquid In Nature

The equity shares are liquid in nature. So whenever you need funds, you can easily sell the stocks in the market. The shares are traded on the stock exchange and you can easily find buyers or sellers in the market.

The above are some of the advantages of equity shares in the stock market. Trading in equity shares in now becoming a profession and more people are learning technical analysis to become professional traders. If you also want to learn about investing or trading in the stock market, you can read blogs and articles on Nifty Trading Academy.

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