EQUITY AS INVESTMENT TOOL :

Advantages:

1. Long term investment : You can invest in the stocks for long period of time. Study has shown that over the long term, stocks have consistently provided better returns than any other type of investment.
2. Diversification : To hedge your portfolio return stock market is another investment vehicle to diversify investment folio.
3. Good return : Stock market investment can get you huge return. If the selection of stock is right at right the time, it can give multiples return which is impossible from any other products. In the long run you can even get dividend, bonus of shares along with price appreciation.
4. Transparent procedure : Stock market investment is most transparent than any other instruments. In real time you can see buying and selling price and get every details of charges and taxes levied upon which is not possible in any other products.
5. No lock in period : Stock market investment has not has lock in period. You can hold your choice of stock for as long as you want or sell the stocks whenever you wish to.
6. Low capital requirements : You can buy as little as one stock and hold for years to come. It does not matter whether you have thousands rupees to invest in stock market or not. In single transaction you can invest 100.00 rupee or less. 
7. Retirement Kitty : Stocks can be very good for retirement, especially for those with a long time to retirement. A long time horizon will help to neutralize the inevitable ups and downs of the market.
8. Inflation Winner : Stocks have consistently stayed ahead of the inflation, something that is not always true of other investments. For instance, if your FD is giving return 7% a year, but inflation is 8%, you are actually losing money. The returns of the stock market provide investors with a superior chance to beat the inflation.
9. Liquidity : If you want you can sell your stock today and your money will be in bank account with three days. It is not possible in case of real estate.

Disadvantages:

1. Volatility : Stocks are volatile investments. The price of stock can vary widely and the factors that cause these price fluctuations are beyond the control of the investor.
2. Risk of Age : If you are near retirement, the amount of stocks in the portfolio should be reduced. Investors who are close to retirement age can no longer afford to take chances with their money, and move equity part of investment to more stable investments. Because there is possibility that your retirement fund may be reduced at the time of superannuation.
3. Limited Ownership : Although as a stock holder you are a partial owner of the company but you are the last one to get profits from the company. Even you may not get your money back if that company goes for bankrupt.
4. Time : If you are interested to invest your fund for the very short term and want to utilise that amount for buying something in the near future then it will not be prudent to invest in the stock market. For short investor there is every possibility to lose your money even you not be able to return your invested amount.