The following article is a guest post.
With the financial systems around the world undergoing major reforms, with banks offering little value on savings accounts, with governments implementing strange policies and risky social security schemes – with a complex, integrated, and global monetary structure in place, it may be hard to decide on the best way to make your money grow. Simply saving money is no longer an option; inflation will eat away whatever interest you get paid. The only way to ensure that your money grows – at a steady rate and with profitable returns – is to invest. But how do you go about it? Following are some of the top benefits of investing in the stock market and why you should seriously consider it.
Stocks – what are they?
A stock, in essence, is a share in a company. This means that if you own a stock, you own a certain share of a company – you, and all others who own that stock, own the company. It entitles you to the profit that company makes. To put it in its simplest terms, a person who buys a stock owns a percentage of a company, has people working for him or her, and will receive a certain amount of money every now and then.
Why choose stocks?
There are many different investment opportunities – so why own stocks? What makes a stock better than the other options out there? Historically speaking, stocks give much better returns in the long run than any other investment vehicle out there. Statistically speaking, they are more lucrative over time. However, there are also other benefits:
Liquidity. Stocks can be bought or sold at will; meaning that, unlike real estate or other business ventures, you can turn your stocks into money very quickly.
Cost-effective. The buying and selling of stocks is done through a broker, who charges a very minimal fee. Technology has made the world of brokerages very competitive and has substantially lowered fees and commissions.
Investing or trading. You can also trade stocks if you choose not to hold them for a long time and receive the dividends. You can buy low and sell high and profit with price fluctuations.
The main goal of a company is to make money – that is, simply speaking, the reason for its existence; to provide jobs, to bring great products and services to the market, and to earn money for its staff and stock holders. By owning stocks, you own part of a company – by owning stocks, you have people working for you. You have a corporation whose aim is to have your investment grow. And if you’d like to find out how you can maximise your stock market investments, speak with an expert from CMC Markets today.