Reasons to Invest in Stocks and how to buy stocks
When it comes to investing, everyone seems to take a different approach. Some people prefer investing in gold, while others like to invest in bonds.
But, if you want to see real growth in your fund over the years, you should consider investing huge amount of your money in stocks via share market. Younger investors especially benefit tremendously by investing in stocks over other options.
If you are still not convinced and looking for reasons to invest in stocks then continue reading.
Why would I choose stocks?
In reality there are plenty of reasons to get into the stock market. Here we are listing top reasons why investing in stocks makes sense.
- Stocks provide the greatest growth potential
Unless you are retiring in a few months, you probably have quite a few years to go before you even think about cashing your stocks. Stocks willpresent you with the most potential for growth during those years. Researches show that U.S. stocks have provided better returns than bonds over the long run, consistently. Thus, investors usually get the most bangs for their buck when they invest their money into the stocks.
- You can probably come through stock market drops
Experts recommend to own more stocks, but if market drops cause you stress, keep in mind: it may be difficult for a time, but if the stock market behaves like it has been from past many years, you should be able to come through it. This is why experts recommend that one should own stocks for long term. It is true that it has taken decades to recover from the worst historical drops in the stock market; but, overall, stock still provide the most growth potential. You can think of it in this way- losses are only on paper unless you sell your stocks. If you are interested to sell stocks when they are down, remember that you are investing for a time far in the future. So why bear the losses when you have time to sail the market back up?
- Simpler to own a piece of established business than creating one yourself
Creating a successful business takes time as well as lots of efforts. Most entrepreneurs are workaholic, at least at the starting they work day and night. Without a doubt, building a successful business can create the type of outstanding return you won’t find anywhere else. But, it takes a lot of energy, effort, time and even money. But, when we talk about buying a piece of an existing established company, it is a lot easier to buy shares of a reputed company. There is absolutely no need to visit the company you invest in, on every working day. You don’t need to deal with issues related to business operation. Even you don’t have to attend its annual general meetings.
- Liquidity and flexibility
Stock investment gives thehighest liquidity and flexibility. You can sell and buy anywhere, anytime as long as the markets are open and you have access to internet. When investing through a broker, you don’t even need internet, a phone call is enough. When company A you invested in goes down, you can easily sell the shares and buy shares of another company that is selling at a bargain price, unlike owning a business. If your own business goes bad, you might get stuck. Closing your own business is a lot difficult than selling off the shares. So, investing in stocks provide you much more flexibility.
- No need to go anywhere
When investing in stocks, you don’t have to go anywhere. Just stay at home, do your research and trade. In simple words, you can do it all from the comfort of your home. You can buy and sell transactions at home. You can find reports online. You can read news and market updates online. All this is enough to let you do analysis and research to find the companies that are worth investing money. Running your own business on the other hand, means managing your employees and clients, but here there are no clients and employees to manage.
- Enjoy long term business growth
If you’ve purchased 1000 share of Genting back in 1971, it will be worth more than RM2.2 million today.
If you’ve purchased 1000 share of Public Bank back in 1967 during the IPO, it will be worth more than RM1.5 million today.
If you’ve invested $1000 in Berkshire Hathaway in 1964, it will be worth $8 million today.
This shows another benefit of buying shares of a reputed company- it grows constantly.
We believe all these reasons are enough for you to decide that why you should choose stocks. Now, once you are sure about investing in stocks then next thingworth knowing is from where to buy stocks. Continue reading to know the answer.
Where do I buy stocks?
When it comes to buying stocks, you have two choices. You can either use an online broker or hire services of a stock broker who is licensed to buy securities on your behalf.
These days most people use online brokerages instead of traditional stockbrokers. In case of online brokerages, the price is generally based on per share or per transaction basis, allowing you to open an account with comparatively small amount. They are simple to use. Just sign up for an account online and transfer funds into it, it is like opening a bank account but a lot simpler. Once there are funds in your account, you can start placing order.
Full service brokers
Full service brokers are the typical stock brokers who work with you personally to understand your requirements. Then they work with you to create a financial plan that can best meet your investment goals and objectives. They also provide assistance with estate planning, budgeting, retirement planning and other types of financial advice, therefore the term “full service”. As far as fees is concerned, they are costlier than online brokers but the value of having professional broker by your side can be well worth the extra fees.
So, decide which type of broker you want to trade with and start buying stocks.