If you want to invest money, you may purchase assets whose value is growing.
When you buy art, antiques, real estate properties, stocks, businesses, or precious metal, you know their value will grow, it means that you purchase them now and you will sell them later for a higher price.
You can also buy assets that produce income, for example, bonds.
Businesses need money for various purposes, mostly to expand the business and increase profits, so they issue stocks to receive money from investors, which means investors who buy stocks will own part of the business, its earnings and assets. The value of stocks may grow as time goes by, you can follow up the ebb and flow of prices on Yahoo Finance or Google Finance.
Dividend stock means that you receive part of the business’s profit, and it pays even though the share price is decreasing. Morningstar.com features a list of dividend stocks.
Stocks are less expensive than other assets like real estate properties. Nobody can give you guarantees that the stock you buy has increasing value, but since 1926, on average, stocks have returned 10%, so chances are that your investment will be successful in the long run.
Investing for retirement and other long-term goals improves your portfolio.
Experts say stocks are the best investment for long-term goals, but if you are thinking of a short-term investment, you risk losing money. Prices at the stock exchange change quickly – so does the value of the stock you purchased. If you need money fast, stocks are not your best opportunity. Long term means that you should invest your money for at least five years.
Make sure that you choose stable companies with lots of satisfied shareholders.
Purchasing different types of stocks, for example, domestic and international stocks as well as stocks of small businesses and established companies, makes your investment safer. Even if one kind of stocks has issues, the others may make up for your loss.
If you are ready to invest money in stocks, turn to a licensed broker firm.
Instead of buying individual stocks, you can purchase stock funds, you may invest in a wide range of stocks, depending on your goals with your investment.
Mutual funds are managed by a fund expert. If you purchase mutual funds, you may own several stocks.
Exchange-traded funds are different assets, remember that they, like individual stocks, example the S&P 500.