As an investor, the best time to buy stocks is when their price is low and you’re confident they have been undervalued. You could end making a really good return soon afterwards when they regain their true value.
Let’s take a look at 5 benefits of investing in stocks.
Stocks are easy to buy
The beauty about stocks is that the stock market has made it very easy to trade in them. As an investor, you can buy stocks through your stock broker, your financial planner, or on your own through online brokerage platforms. If you get it right, the returns can be really good.
Stocks are easy to sell
Just as stocks are easy to buy, they are also easy to sell through the stock market. This especially comes in handy when you urgently need cash and you need to liquidate. What you need to know is that you stand a chance of losing money if you sell as the wrong time because stock prices are usually very volatile.
Stock value usually increases asthe economy grows
The benefits of a growing economy is that it results in the creation of income generating opportunities thereby increasing the purchasing power of consumers. This then has a positive effect on revenue generation by corporates, a benefit that extends to its stockholders.
Stocks help you stay ahead of inflation
Based on financial statistics, stocks usually average an annual return of about 10 percent which is way above inflation which annually averages at about 3.2 percent. This therefore presents you as an investor a really good opportunity to stay ahead of inflation.
Stocks give you multiple money making opportunities
For most investors, there are various ways to make money from stocks. The first way is usually through purchasing these stocks when their price is low and then selling them when their value goes up, thereby making a good return. The other way is purchasing stocks when their value is low, mostly from a company that is still small but growing and holding on to the stocks with a long term play in mind. Many investors have made very huge returns when they sell their stock after the company has significantly increased its stock value. There are other investors who purchase stocks so that they can enjoy a share of a company’s profits through dividend. It’s always down to an investor’s individual preference.
As an investor or potential investor most of these benefits will be enjoyed depending on the level of sound financial decisions you make when trading in stocks.
Reach out to us and we’ll guide you on how to identify the right stocks to suite your investment objectives.