Investing - Should I Do it?
Investments sound to many people as the next step on Finances. Something that only the wealthy can do. That’s partially true. Let’s say you have your budget in order for quite some time and your savings account is looking very promising. Shouldn’t I try something new? Then, Investing comes to mind.
At first, it can be uncharted territory, however, once you research and understand the rules of the game, it becomes appealing. One of the advantages of the stock market is the possibility of getting a return higher than the interest rates on your bank.
The stock market has proven itself to gain an average of 7-8% over a decade or more. The last decade in particular has been even better. That is a very good return on your funds. But of course, there will be some up years and down years. The good thing is that most downtimes don’t last that long while bull runs (up periods) last much longer.
There are also not that many times in history where interest rates have exceeded the stock market gains.
That is why the stock market remains the most successful way to increase a person’s funds overall.
So, what to consider before investing?
Advantages of Investing in the Stock Market
High Return
Stocks are risky and there is no guarantee on their returns. In the long run, most of the investments paid off. They have a high return, no doubt about it. The question is how much of your savings are you willing to invest? Experimenting is always a good option, as long as you understand the risks, it can bring you success and a better return than the interest rates from your savings account.
Flexibility & Fast Pace
Everything changes fast in the stock market. During the day, businesses are pumping with the buying/selling roller coaster. This makes stocks a liquid investment. When you want out, it is quick and easy to find a buyer, especially with the trending going upwards.
Information is Your Best Friend
The stock market is a World game. Eyes all over the globe watch its ups and downs. Research and understanding the industry a company is part of are some of the tools to help you make your choices to invest. Read financial statements, evaluate the future possibilities on the business before you put your money out.
Before You Start
You are eager to start investing, but there’s still a cloud of doubt on your mind. Don’t worry. We know that some people are not risk takers so the best piece of advice is to proceed with caution. Information is key. Read, research, talk to people who are used to invest in the stock market. If you prefer, contact a professional advisor to explain the best way to proceed based on your profile and your actual savings.
Once you start, keep track of your savings and your returns. Remember to maintain your budget updated. And good luck!
KJ/DB