Advantages of trading Shares
Build your savings, protect your money from inflation and taxes, and
maximise income from your investments by trading stocks.
The opportunity to increase your investments is one of the main advantages of investing in the stock market. Even if the prices of individual stocks rise and fall regularly, the stock market tend to rise in value over time.
A lot of companies pay dividends to their shareholders, this can be a source of tax-efficient income for investors.
Minimizes the risk of loss to your overall portfolio while exposing yourself to more opportunities for return.
By taking on an ownership stake in the company you have the opportunity to link your personal finances to the success of the business as a whole.
High liquidity and volume
With a huge number of buyers and sellers trading at any given time it is easier to find a buyer or seller.
Cross-margin your share’s portfolio to trade other instruments.
What affects the supply and demand?
Company finances and performance –The investor’s attitude towards the company is partially affected by the management and internal relations. A stable and capable leadership together with a good policy of social responsibility is usually expected to continue to grow and succeed. Hence the prices of the shares tend to increase. Publicly traded companies have to publish their recent earnings, cash flow and performance forecast in a report. These reports can affect the supply and demand. The share price may also be affected by dividend announcements. If dividends are higher than expected, the price of the shares rise, if it’s lower the price decreases.
Politics – Governments shapes and affect the environment businesses operate in, with things such as regulations, policies, laws, taxation, international relations etc. As these factors can affect the ability of which a company can handle their business, have access to their materials, do marketing and how they can distribute and produce their product/service politics can affect the share prices.
Economics –The economy tends to fluctuate, and so does stock prices. The prices tend to fall during a recession and rise as the economy does.
Investors –Who is playing the market affects the prices. If the market has more bears than bulls, share prices decline. If the market has more bulls than bears, the prices increase.