Whether you are an expert or new to stock trading, there are so many reasons why you need to consider investing in the shares and bonds. Once you decide to invest in stocks, you can do it on any company including tech companies, food companies, and many famous corporations. Here are some of the reasons why you need to reflect on investing in the stock market. Why should I buy stocks? – 5 top benefits
- Buying stock is taking advantage of a growing economy
When the economy is growing, the companies are growing as well. This is because economic growth helps to create jobs, generate income and increase in production. Hence, if you buy stock, you will be taking advantage of the growing economy. In addition, you are able to learn and understand how the business cycle works.
- Buying stock is the best approach to be ahead of inflation
If you are looking for a good investment that can give you an amazing annual return, you can consider the stock market. With stocks, you can have an average annual return of 10 percent. But the average inflation rate is 3.2 percent per annual. By learning how the market works, you can be able to hold the stocks even when the value drops knowing you will make some good money in the future.
- It is easy to buy stocks
One of the easier ways to invest is buying stocks. You can buy and sell your stocks anytime you want. Whether you want to make a loss or a profit, buying stocks is not as hard as other investments. You buy them online, through a broker or a financial planner. By creating an account, you can be able to buy stocks in a few minutes. Some brokers even allow investors to buy and sell stocks for free. However, it is important to understand the investment in stocks works.
- By buying stocks, you can make money in two ways
Most people buy low to sell high. They look for fast-growing firms to invest knowing the stocks will rise. Knowing more about stocks, you can make good money. This is a good option to day-traders and buys and hold-investors. Day-traders always take advantage of the short-term trends and the buy-and-hold-investors expect the stock prices to grow in the future. The other way to make money is when you purchase stocks from a strong company and expect to get dividends every year. The companies grow at a reasonable rate.
- You can sell the stocks any time
Just like buying, stocks are easy to sell as well. You can sell your stocks anytime. Hence, if you need some emergency money, you can easily turn your shares into cash. However, you may be forced to sell at a loss. Bottom-line These are just some of the reasons why you need to buy stocks. Even though there are some disadvantages of investing in stock, buying shares and bonds is a worthy investment. All you need is to learn and understand how the market works.