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.) One of the best if not the best vehicle of investment – In 1986 the Philippine stock market recorded its highest return rate at 224 %. The lowest return rate was recorded in 1997 at negative 41 %. The average return in 20 years time however ranges from 24 % to 28 % per year. It can therefore be clearly seen that while it is true that investing in the stock market has its up and down, in the long run long term investments in the stock market still yields a greater return. Hence it can be concluded that the long term investors always benefit and that the stock market is still one of the best vehicles of investment.
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.
The advent of the internet age has certainly changed a lot of things. The information technology is powered by the internet and information on anything is accessible via the world wide web. This has also the changed the way stock market trading is done. Because of this I am now able to do everything online such as monitoring the business news, buying and selling shares of stocks and transferring money to and from my accounts. A future development would be to trade stocks globally. Although this might prove to be a much more complicated area of study nevertheless the principles of stock trading are similar.
7.) Helps build the nation – Investing in the stock market helps build the nation. Most stock market investors may not realize this but this is one of the most noble objective and advantage of investing in the stock market. Companies who are listed in the stock exchange intends to infuse more capital into their business in order that such capital might be further used for expansion. Business expansions would mean more people are hired for work. The government also benefits as more taxes are being paid. This further translates into more economic activity which in the long runs helps build the nation.
For sure these reasons certainly make a convincing argument as to why you should invest in the stock market.
Desiring 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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