« ETF Trading System For Beginners – System Rules Basic Investment Principles In The Stock Market – Part 4 »
Last time we discussed about the advantages or the reasons why you should invest in the stock market. We talked about the first three which are, potential for greater returns, part ownership of the company you are investing and belonging to a special group of people. This is the concluding part of this 2 part series. If you wish to view the entire article, check out my blog.
4.) It still one of the best vehicles of investment – Even if the stock market has its up and down moments, investing long term in the stock market will still give you one of the highest returns making it one of the best vehicle of investments ever. Returns in the stock market fluctuate yearly. For example, in 1986 the Philippine stock market recorded the highest return rate at 224 %. On the other hand the lowest rate of return was in 1997 at negative 41 %. However the average return (within 20 years) is still somewhere from 24 % to 28 % per year. This means that the long term investor always wins in the long run.
5.) Helps you become more financially literate and inspires you to increase that knowledge – Investing in the stock market forces you to go over the business news. It also helps you give significant meaning to the major news headlines. News for you is not something to be discussed in chit chats, but rather you view it as something that will have an impact on how the market behaves. You are forced to understand words that are foreign to you. You will become more sharper intellectually as you are motivated to keep on reading. If you dozed off in your your economics class in high school or college, this time you will be pulling your hair apart just to figure out what inflation means. you will be motivated to become a life long student.
6.) Investing in the stock market will help you know what it means to harness the power of the internet – The progress of man is divided into several ages. We had the “stone age” the iron ages, bronze ages etc. then we moved up to the industrial age and now they say that we are in the “information technology age.” In the information technology age, knowledge is power. For many of us that term is considered just an adage. But with online trading you will know what that means. Since I was in college I really wanted to know what it is like to invest in the stock market. I was just amazed when I see traders in movies, shouting buy or sell. But I did not invest back then mainly because of three reasons, lack of information, lack of capability and most of all lack of money.
With the advent of the internet age, information is everywhere through the World Wide Web. Add to the fact that you can now trade online. With this opportunities that come into play, it was now possible for me to trade in the stock market. I monitor the news online, I buy and sell online, I transfer money to my accounts online and best of all it is now possible to trade globally and invest in other stock markets around the world with the use of your computer. Although this is an entirely different arena but the stock market trading principles still come into play.
7.) Help in nation building – The most noble objective and advantage as to why you should invest in the stock market is probably this one. Companies want to get listed in the stock exchange to raise more capital for their business in order that they could expand. Business expansion is translated as more jobs, more taxes for the government and more economic activity. This in effect moves the nation forward and helps build the nation.
These reasons certainly make a compelling argument as to why you should invest in the stock market.
Would you want to know more about investment strategies ? Visit the blog of Zigfred Diaz where he blogs about several interesting topics such as investments, money management, business, making money online and Stock market investing
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