Many people say you can make a lot of money in the stock market. But other than that, what other reasons should you start investing your money in stocks? Take a lot of these reasons.
1.) Experts say that when managed properly, investing in stocks is the best investment.
Studies confirm that even though the stock market has had its ups and downs, overall, no other investment can beat the stock market. Professor Jeremy Seigel backs this up with numerous case studies in the book “Stock for the Long Run”.
Professor Seigel observed that from 1802 to 1997, a period of 195 years, although the stock market was volatile and fluctuating, it was still the primary investment vehicle most of the time. Even the biggest stock market crashes have become insignificant jitters in economic charts. Hypothetically, $1 invested and reinvested in 1802 should multiply to $7,500,000 by the end of 1997.
Here is an example closer to home. The highest rate of return in the recorded history of the Philippine stock market was 224% in 1986. The lowest rate of return, however, was negative 41% in 1997. Yet, if you held your investment for about 20 years, the average return was still between 24% and 28% per year.
2.) You are forced to learn.
When you invest in stocks, you force yourself to read economic news and see the impact of major news headlines on your investments. The news will cease to be mere coffee table topics but will take on new meaning for you as to how it may or may not affect your investments. Thus you will strive to understand the financial and commercial terms of the news, a jargon that you have never encountered even in your wildest dreams. You become smarter because 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 as you try to figure out 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 era of knowledge or the era of information technology. Never has the saying “Knowledge is power” been more applicable than at this age. Although for most people this is just an old saying, those who have tried online trading have found out what it really means. Since my university years, I have aspired to invest in the stock market. I was fascinated by the frenzy of the stock exchange offices as depicted in the movies. It made me wonder what it was about. Unfortunately for me, I hadn’t been able to invest myself early in life. I lacked three important things: information, capacity and money. But thanks to modern technology, information is now available on the Internet at the click of a mouse. With your fingers on the keyboard, even online trading is possible. I’m online most of the time, watching the news, investing in stocks, doing online banking and a host of other things. It won’t be long before I can invest globally in different stock markets around the world. And I will do all of this sitting comfortably at home!