Question

what are the reasons for investing in the stock market with an emphasis on stocks, mutual funds and bonds? Compare the advantages and disadvantages of each of these options (stocks, mutual funds and bonds). Please conduct research using a minimum of seven sources. Sources cannot be blogs, Wikipedia, Investopedia, or other similar sources. You should use reputable books, papers and magazines.

Answer 1

reasons for investment in stock market

1. easily liquidated i.e easily can be converted into money

2. can become owner of the company

3. Can diversify the risk and investment.

4. good return

5. Long term investment

6. Regular income with long term income

7. our income is in consistency with inflation..

8. Risk of default is very low.

Invest with little fund in many markets

Advantages and disadvantages of stock.

capital growth, Dividend , Liquidity easily, Can become little owner.... limited liability

High risk ,, dividend is not certain, residual claim, market Fluctuations

Advantages and dis, of Mutual funds

Easily Liquidity, Diversification, expert management, Less transaction cost, Certain return,,

Cost to manage the funds, Dilution lock in periods ,

Advantages and dis advantages of bonds

Low volatility, certain return, Legal protection,

Interest rate risk, repayment risk, Liquidity risk...