I am sure all of us have a tweak of greed in us. We want that all surplus money should be put to use in such a way that it earns more money in a short period of time. Well, this not exactly greed, but an outcome of a simple want that we should have more money in the foreseeable future to live through retirement and provide for our dependents after our deaths.

This is an honorable ambition to have and investing our hard earned excess money is not a sin. Having said that, all of us need to take care of our investments and invest wisely in such securities and institutions where our money is secure. Secure in the sense that it does not evaporate away in a crisis and in the worst of situations, at least the capital should stay put. Well, the investing world is a little different and the norm is no-risk, no-gain or low-risk, low-gain. This means that if your investment is subjected to more risk, the more money it earns. For example, if you have invested your money in a fixed deposit at a government bank, you will earn and interest income of probably 3-4% a year. That is no appreciation of capital at all, but your money if protected and secure since you are, in effect, lending to the government. Conversely, risky investments like stock markets can yield a 100% return per annum, if invested in without a care of security and using a little innovation and intellect. I do hope this answers the question - Why invest in stocks? Let us look at a few more reasons of why and how one should invest in stocks.

If you are not from a financial background, it is easy for you to wonder why stocks behave the way they do. Sometimes, they do behave in an erratic fashion and leave us wondering as to whether one should touch them with a barge-pole. This is the reason why people invest in stocks and bonds or not at all.
Let us come back to the question, why invest in stocks? Well, not just in any stocks. Stock investing is goal oriented. To begin with and as discussed above, the main goal of investing stocks is to make your money work harder and generate more money for you than a normal bank deposit. It would yield more than 4% risk-free rate (concerning the 10 year treasury bonds guaranteed and backed by the US government, deemed free from any risk) that is doing the rounds today. Therefore, primarily we are looking at a return of more than the guaranteed 4% by investing in stocks.
How much return does one look at? Some are happy with 5% and some with 8%. In my judgment a 7% return on stock investment is ideal by not taking undue risks. Stock markets have a property of being high risk and sometimes being unpredictable. One other thing is that stock markets are affected by industrial, economic and financial conditions of the market. Now assuming that the interest rates go up to 8%, we would not obviously look at investing in the stock market for a 7% return. Instead we will be looking at a 12-15% return and sufficiently increase our exposure and risk to the stock market. Otherwise it will more worthwhile to keep the money in the bank.
Looking at the risk and return figures in the past 100 years, the US stock market has given an average return of more than 10% to an investor. This is more than any other investment, including real estate. With this in mind, it is worthwhile to invest in the stock market, not only to boast your share of the American corporate pie but also to make your money make more money for you. However, investing in the stock market is not as easy as doing a fixed deposit in the bank. You will have to understand a little of finance, find a good and able stock broker and consult with him or her regularly to manage your investments and also to keep them safe and sound.
Investing in stock would also take a lot of boldness, especially if you are targeting at higher returns. Investing in new issues and futuristic technologies can bring long term benefits. For existing stocks of regular industries, an in depth study on the history and financial condition of the industry and the stock are required to make a wise decision. Remember, you cannot make a killing in a single day, despite stories that do the rounds. Be patient, keep pushing and pulling at your portfolio and look at long term returns. Become a wise stock market investor and do not pay heed to short term advice and propositions, this will keep your money safe.