The first factor which pushes an investor towards investing in financial markets is its profit potential. Financial market products enjoy a higher profit margin than most other assets. Long term profit on all financial market instruments is unparalleled, it's even higher than real estate investment or conventional banking services. In fact, most of the brokerage houses provide their clients with financial options, who invest a minimum amount and earn a higher return. The basic reason for this immense profit potential of financial market instruments is the spread.
A bond issue has a lower market cost (the spread) than a stock issue. The spread relates the difference between the purchase price and the current market price. If you purchase a bond for say $100 and the current market price is around $110, then you are eligible to sell it for a profit. Your investment will be worth about 110 percent. This figure varies across different financial markets; some bonds have low spreads while others have high spreads.
The second main reason to invest in these markets is the opportunity to earn returns faster. All financial instruments carry some level of risk. However, the spread is one-half to one-third of the overall value. This means that a trade that produces a five percent return might turn out to be a loss in the long run. However, if you are able to buy and sell at a profit, then your returns are likely to be high. You can read more about the various investment instruments like derivatives, bonds and mutual funds that carry some degree of risk, but also offer high returns.
The third reason to invest in financial markets, as suggested earlier, is the opportunity to diversify. You can invest in several asset classes in the same portfolio. While there is some risk involved with all these investments, the potential for large gains is much higher in stocks and bonds than in derivatives. As they are riskier instruments, they carry a higher premium to pay.
Finally, you can invest in financial markets because prices are volatile. The prices of most financial instruments have a tendency to change very quickly. This makes them very attractive to those who like to invest small amounts frequently. Volatility can work to your advantage if you can buy and sell at times when the prices are falling. At other times, it can work against you, if you expect that prices will rise. You can view here to find out more about investing in financial markets.
All in all, there are many reasons to invest in financial markets. Some of these include the opportunity to diversify, the possibility of earning high returns on your investment, the possibility to diversify by investing in several different asset classes, and the possibility to take advantage of current investor risks. It is important to remember that each of these reasons has its own set of risks and benefits. As an investor, you should consider all of these before deciding how to invest. Check out this post that has expounded more on this topic: https://en.wikipedia.org/wiki/Financial_market.