13 Reasons Why Cash Is King for Stock Market Investors
The Bombay Stock Exchange or Sensex is one of India’s most-followed stock indices. It has been tracking changes in financial markets around the world since its inception decades ago. It’s no surprise why this would be an appropriate indicator when we see what happens with other country economies during times like these. When inflation rates spike due to currency fluctuations (which happened recently); political instability across several countries; the unprecedented pandemic; and the ongoing Russian-Ukrainian war can all be causing major dips in the market.
Stock market volatility is not new or surprising. This is why despite the current downturn, a lot of Indian investors believe that the stock market will rebound in the future. They are holding on to their stocks and waiting for the market to recover. Furthermore, many Indian companies are doing well financially and continue to pay dividends to their owners.
For these reasons, wherever you are or whatever strategies you are using to try and make money. Whether it is in the purchase and sale of stocks, bonds, mutual funds, or more complex methods such as derivatives or options. One of the most important things to remember regardless of what tactic you’re using is that cash is king.
Important Reasons Why Having Cash Is Powerful
1. Cash is a safe investment
It’s always there when you need it and it doesn’t have any hidden risks. It can provide a buffer against stock market volatility and protect your investment from losses. Cash is king for stock market investors and it should be a part of every investor’s portfolio.
2. Cash is liquid
You can easily convert it into other investments or use it to pay for expenses if needed. This flexibility can be helpful in several situations, such as when you need to rebalance your assets or take advantage of opportunities in the market.
3. Cash is tax-efficient
You can hold cash in a variety of investment accounts and you won’t have to pay any taxes on the income it generates. This can be helpful if you’re looking for ways to reduce your tax bill. Making your money works for you without government intervention.
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