While there are many financial avenues for potential investors to put their money like the gold, commodities, savings accounts, fixed deposits, post office schemes, real estate and other modes of investment, the unique feature of stock investment is to earn higher returns compared to all other forms of investments. Historically, the stock market returns have been higher than any other forms of investment due to the compounding growth of stocks and exponential growth of company profits. The key objectives of potential investments in stock markets are (Ballestero, Bravo, Perez-Gladish, Arenas-Parra, & Pla-Santamaria, 2012):
- Earning of premium returns compared to other forms of wealth creation, i.e. High reward for people who are willing to take measured risks involved with stock markets.
- Mitigation of Un-systematic risk and profit maximization.
- Risk reduction by qualitative and Quantitative research.
- Higher liquidity than other forms of financial instruments.
- Beating the inflation by a safe margin which is difficult with financial instruments like savings and fixed deposits.
- Partial ownership of a firm which is not possible by other financial instruments and potential for long-term financial security via the assurance of dividends from the stocks owned by the investors.
- Effective trade-off and balancing between risk and reward which is not possible using other financial instruments.