Shares or stocks of a company always tend to go up and down but over the long haul seem to do so much better than your average savings account. The main reason why is that each stock within your investment portfolio has the potential to increase or grow in value. For a simple example, if a company you have invested in is doing well, this also appreciates the value of its stocks or shares and therefore can be sold for more making you a profit.
On the other hand those of us looking to create an additional stream of income can also turn towards stocks that payout dividend, which are basically monthly or annual payouts to shareholders.Â
Now the main allure of the stock market and investing has to be the chance of grabbing up the right stock, at the right time. Which can be done with proper research and of course dumb luck? Investing in the market today has to be one of the greatest ways to build wealth, alongside risk. From time to time any given company, which seems to be on the up and up, can suffer greatly from its industry or sector when demand brings to flounder.
Here is the simple run down. Average Joes or known as retail investors hear about new products or companies in the newspaper, on TV or the internet. And believing in the success of this product or company begins to invest their money in the form of buying stocks. Sooner or later certain obstacles come into play that can affect the value of their new found shares, whether it is war, interest rates or other major global events. And the market begins to suffer. Now most of these retail investors, who just slapped down a couple of grand in to their first trading account, lose the initial excitement and quickly liquidate their existing stock portfolios. To save what little cash they have got left. This my friends is the time to buy in! As the market continues to flounder and it looks like the bitter end, the smart money always buys in. And hey after a couple of years the market is back up to where it was again or we even find ourselves in a new high. The cycle happens over and over.
On the other hand those of us looking to create an additional stream of income can also turn towards stocks that payout dividend, which are basically monthly or annual payouts to shareholders.Â
Now the main allure of the stock market and investing has to be the chance of grabbing up the right stock, at the right time. Which can be done with proper research and of course dumb luck? Investing in the market today has to be one of the greatest ways to build wealth, alongside risk. From time to time any given company, which seems to be on the up and up, can suffer greatly from its industry or sector when demand brings to flounder.
Here is the simple run down. Average Joes or known as retail investors hear about new products or companies in the newspaper, on TV or the internet. And believing in the success of this product or company begins to invest their money in the form of buying stocks. Sooner or later certain obstacles come into play that can affect the value of their new found shares, whether it is war, interest rates or other major global events. And the market begins to suffer. Now most of these retail investors, who just slapped down a couple of grand in to their first trading account, lose the initial excitement and quickly liquidate their existing stock portfolios. To save what little cash they have got left. This my friends is the time to buy in! As the market continues to flounder and it looks like the bitter end, the smart money always buys in. And hey after a couple of years the market is back up to where it was again or we even find ourselves in a new high. The cycle happens over and over.
