Overview

This essay sheds light on advantages and disadvantages to investing in the stock market and also elucidates the advantages and disadvantages to investing in the bond market. Moreover, how to make money so that you can afford to invest in the equities market and bond market is delineated in this essay. There are ample advantages appertaining to investing in the stock market that go far beyond being able to grow your wealth and net worth. While there is no guarantee that buying a stock based on speculation and its historical performance with reap you a capital gain, it is still a prudent decision to buy shares of equity from highly profitable companies that have undervalued stocks. One of the utmost critical advantages to buying stocks comes to fruition when stocks posses high dividend yields. This renders them income generating asset that could potentially yield you dividend payments in perpetuity. This can also allow you to substantially build your long term wealth, especially if the dividend payments are lofty and are doled out by highly lucrative companies that preponderantly dominate the market share of their respective markets and that also have severely undervalued stocks. By leveraging a dividend investment strategy by buying equities from highly profitable companies in order to reinvest the dividend payments into buying more shares of equity, you can substantially grow your investment portfolio. Every stock that bears a high dividend yield can be considered an income generating asset that allows your money to work for you rather than you having to succumb to actively work for it. Advantages associated with investing in stocks go beyond procuring income generating assets that can potentially generate you wealth in perpetuity through dividend payments if the companies you own shares of stock in do not become defunct. When you invest in the stock market, you also attain an ownership stake in the company. This is advantageous since you can capitalize on voting on the company's business decisions and electing their corporate leadership, thereby ultimately influencing the future direction of the company. You can also forfeit your ownership stake if you do not like the direction the company is heading by relinquishing your stocks. Since stocks are deemed liquidable assets, it is easy to sell them and convert them into cash, unlike other types of assets, such as real estate. Another advantage to investing in the stock market is that stocks have historically outperformed many other types of investments. According to Vanguard, the historical average return for stocks from 1926 to 2017 is 10.3 percent. In contrast, the average return for bonds during the same period is 5.4 percent. Placing your personal finances in the stock market unequivocally gives you the opportunity to grow your finances over the long-term (Johnson, 2019). In other words, stocks can be a powerful asset class for growing both your wealth and legitimate power long term. As a shareholder, if you preponderantly hold the majority of the company's stocks by possessing at least 51% of their shares of equity, then you will ultimately have control of the company you own stocks in. The lofty historical returns for stocks has allowed investors to substantially compound their wealth overtime to an unprecedented level.Prudently investing in the stock market can also help your investments outpace the average annualized inflation rate. Therefore, by prudently investing in the stock market, you will have more purchasing power than you otherwise would if you left the money in a savings account, assuming your equities yielded an annual growth rate of 4% or higher. On the other hand, if you left your money in a savings account and forgone the opportunity to invest it in the equities market then you would consequently loose purchasing power due to the annualized inflation rate trumping annual percentage yield of the savings account.

Full Product Details

9798617985315

Table of Contents

Reviews

Author Information

Tab Content 6

Customer Reviews

Recent Reviews

Countries Available