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| Stock market investing. Why should one invest money in stocks?. |
If one looks at history, investments in stocks over long term (Say 5 years) has given better returns than any other sort of investing options.
Usually investing money in assets is made to beat the inflation.
Usually valuation of any financial investment is made based on the return it gives you each year.
Say if the inflation rate is at 4% per annum, a investment in a asset should give a return of over 4%.
A bank deposit usually carries an interest just 1-2% above the inflation rate and is usually considered the safest. A person who is retired or nearing retirement and can not take much risks with the investments should opt for this option.
Gold, Bonds, Real estate are the other good investing options.
One can opt to invest in any business directly. It is a bit risky but a more attractive form of investment.
If one can not spend time on day to day basis or wants to jump into a running business, stock markets are the best form of investment.
A stock is usually valued by the demand for the stock on day to day basis. If company is doing well, has potential to do well, has any welcome news will have more demand and will get good quote in stock exchanges. One should be able to judge the future performance of a country's economy; industry and the stock in particular will reap the maximum benefit.
An investment in stocks can also be a highly risky one if you choose the wrong company and the wrong economy.
A well-made study will yield excellent results. Always go for stocks, which has been improving its performance in the past. |
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