Finance

The Advantages Of Investing In The Stock Market – Part 2

Previously the advantages or the reasons why you should invest in the stock market was discussed. In the first part of this two part series, we discussed about the first three reasons why you should invest in the stock market those are, potential for greater returns, part ownership of the company you are investing and belonging to a special group of people. We continue by discussing the next 4 reasons in part 2 of this 2 part series. Should you wish to view the entire article, check out my blog.

4.) It still one of the best vehicles of investment – Even if the stock market has its up and down moments, investing long term in the stock market will still give you one of the highest returns making it one of the best vehicle of investments ever. Returns in the stock market fluctuate yearly. For example, in 1986 the Philippine stock market recorded the highest return rate at 224 %. On the other hand the lowest rate of return was in 1997 at negative 41 %. However the average return (within 20 years) is still somewhere from 24 % to 28 % per year. This means that the long term investor always wins in the long run.

5.) Increases your financial knowledge and forces you to learn. – If you dozed off in your high school or college days economics class before, you might loose all your hair right now just to force yourself to try to understand what inflation means. You start to begin reading the business news regularly and try to give importance to major news headlines as this will have an impact on the behaviour of the market. You will be forced to understand words that you never understood before. You will become more smarter and wiser more than ever as are forced to keep on increasing your financial and investments knowledge.

6.) Helps you more to become internet savvy. – It has been said that the development of mankind is divided into several ages. First we had the “stone age”, then came the iron age and then the bronze ages etc. Afterwards we moved up to the industrial age. Currently we are said to be in the “information technology age.” In this age, knowledge is power. This is not just considered as an adage. Rather this is the essence of the information age. Engaging in online trading will surely help you understand what this means. During the time that I was in college I wanted to invest in the stock market. The reason for my curiosity was because I always see in the movies how the traders are shouting buy or sell. However I did not invest during that time because of three reasons. First I lack the information. Secondly, I do not have the capability and thirdly I do not have the money to invest.

In today’s internet driven economy, information can be accessed easily through the world wide web.Trading is made much more easier with online trading facilities. As this opportunities are presented to me, I made it a point to start investing in the stock market. Now I do all of my trading activities online such as monitoring the news, buying and selling of stocks and transferring money to my accounts. Perhaps I will someday move into global stock market trading. Despite its complications, the principles in stock market trading is still somewhat the same.

7.) Help in nation building – The most noble objective and advantage as to why you should invest in the stock market is probably this one. Companies want to get listed in the stock exchange to raise more capital for their business in order that they could expand. Business expansion is translated as more jobs, more taxes for the government and more economic activity. This in effect moves the nation forward and helps build the nation.

These reasons certainly make a compelling argument as to why you should invest in the stock market.

Would you like to know more about investment strategies ? Visit the blog of Zigfred Diaz where he blogs about several interesting topics such as investments, financial management, business, making financial online and Stock market investing

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