A lot of people say that you can make a lot of money in the stock market. But aside from that what are the other reasons why you should start investing your money in stocks? Take a lot at these reasons.
1.) Experts declare, that if managed correctly investing in stocks is the best investment.
Studies confirm that while the stock market may have had its high and low moments, on the overall picture, no other investment can beat the stock market. Prof. Jeremy Seigel supports this with numerous case studies in the book “Stock for the Long Run”.
Prof. Seigel observed that from 1802 to 1997, a period of 195 years, although the stock market was volatile and fluctuating, it was still the leading vehicle of investment for most of the time. Even the greatest stock market crashes became mere insignificant blips in the business charts. Hypothetically, US$1 invested and re-invested in 1802 should multiply to US$7,500,000 at the end of 1997.
Here’s an example closer to home. The highest return rate in recorded history of the Philippine stock market was 224% in 1986 The lowest return rate however, was negative 41% in 1997. Still, if you held on to your investment for the long haul of about 20 years, the average return was still somewhere between 24% to 28% annually.
2.) You are forced to learn.
When you invest in the stocks, you will force yourself to read business news and to see the impact of major news headlines to your investments. News will cease to be mere coffee table topics but will assume a new meaning to you as to how it may or may not affect your investments. Thus you will strive to understand financial and business terms in the news items, jargon you have never encountered before even in your wildest dreams. You get smarter as you are compelled to read and learn to expand your business knowledge. You may have slept through your business and finance subjects in college but now you can’t even blink while you try to grasp what inflation is and how it can affect your investments. You will be motivated to learn like never before.
3.) You will understand the meaning of “Knowledge is Power” and the importance of the internet.
We are now in the age of knowledge or age of information technology. Never has the saying “Knowledge is Power” been more applicable than to this age. Although to most people it is just another old proverb, those who have tried online trading have discovered what it truly means. Way back to my college days, I have yearned to experience investing in the stock market. I was fascinated with the frenzy in stock exchange offices as portrayed in movies. It made me ask what it could be all about. Unfortunately for me, I had not been able to invest early in life. I lacked three important things: information, capability and money. But thanks to modern technology, information is now available through the internet just a mouse click away. With your fingers on the keyboard, even online trading is possible. I am online most of the time monitoring the news, investing in stocks, doing online banking and a host of other things. It will not be long before I am able to invest globally in different stock markets all over the world. And I will do all these while sitting comfortably at home!