There are lots of benefits that come with a stock market investment. In the following article, our experts compiled some of the major advantages individuals can benefit from, when they invest in the stock market.
A growing economy:
Corporate earnings increase as the economy grows. A growing economy creates new jobs and new opportunities which then in turn create more income and sales. Usually, bigger paychecks increase consumer buying and demand which increases company’s revenues and internal business money processing. This shows the phases of the business cycle which are: expansion / growth, peak, contraction and trough.
Staying ahead of inflation:
Investing in stocks overtime has proven to have an average annualized rate of 10%. With stocks, you can buy and hold finances longer even if the stock’s value drops.
Easy to buy:
It is easy to buy shares of different companies using the stock market. Your purchase could be through an online platform, a broker, or financial advisor. All you need is to set up an account, review your options and purchase what you think is best. An online platform like Robinhood allows you to buy and sell stocks yourself – commission free.
Multiple ways of making money:
Experienced investors are known to buy stocks at low prices and then sell at higher prices which in turn makes the stock holder money. They can be categorized into two groups – day traders and buy-and-hold investors. The day traders plan to buy and sell using short term trends while the other expects to see the company’s stock and earnings grow overtime. Both believe their experience paired with stock-picking skills can help them to outperform the market. A separate group of investors prefer to buy stocks of companies paying dividends. These companies can grow at a moderate rate.
Easy to sell:
You can easily sell any stock you own on the stock market at any time. Being able to turn your stock into cash quickly with low transaction costs is known as being ‘liquid’ in technical terms as used by economists. Since stock prices are very volatile, you can be forced to sell at a loss.
Create savings:
A sure way of saving money for the long term is through efficient use of the stock market. To achieve this, online trading is the way to go. You can create a direct debit that feeds your stock trading account. This offers you maximum profit in the long run. Invest in blue-chips stocks and reap great benefits.
Earn dividends:
The stock market offers you a great way of investing your money and getting solid returns. Your stocks may not rise rapidly but you can earn steady dividends. This means, even when the stock does not rise in value, your profit will increase with time. Previously, using a stockbroker was the only way to invest but with the advent of technology, brokers could be eliminated. Only wealth management companies, high net worth individuals and businesses were trading through brokers. For new starters and average traders, online stock trading is your best bet.
Make trades at any time:
Another advantage of trading online is that you can make any number of trades that you want. While brokers are known to have a minimum trade amount/allotment, individual traders can trade any amount or volume. Online stock trading works for novices and professionals. Take charge of your finances and make good investment in stock trading. With the internet and technology prompting online trading, there are practically no barriers to trading as you can trade from anywhere in the world. By using your tablet and computers as well as internet connectivity, stocks can be traded in seconds.
Setting your own investment limit:
With online trading, the decision rests solely on you. There are no investment limits and you can buy as much stock as you want.
Possible fast returns and rapid gains:
All previously known challenges associated with stock trading have been eliminated by online stock trading. You can make purchases and sales with a click and get good profit in return. You do not require extensive and complex knowledge to trade stocks. Start with profits from the first day you trade with online stock trading platforms that gives great benefits.