Eight Reasons to Invest in the Stock Market

Trading of any kind will always carry a risk of losing money and many people do; however, if you carry out enough research, you can make a profit. Investing can help you financially and everyone should be aware of the financial freedom that it can bring if done correctly.

1. You can invest when you want and for however long you want.

Investing in stocks can be your full-time job, a hobby every now and again, or anywhere in between due to there not being limitations on when you can and cannot trade apart from market opening and closing times. This means you can just turn on your computer and trade for however long you want. This flexibility makes it ideal for people who lead busy lives or have responsibilities, like children, that take up a lot of time.

2. Abundance of Learning Resources

Like most things in the digital world, there are lots of learning aids and resources available for free, allowing you to build up your knowledge and start making money. Furthermore, most brokers provide a free practice account to allow you to get some hands-on experience before trading for real.

3. You can trade with as much or as little as you would like.

Most brokers have a minimum deposit limit ranging from 100-500 USD dollars, but some brokers allow you to deposit less allowing you to start trading for real without risking large amounts of capital. This is very useful because you can deposit small amounts of money and use it for learning. This is beneficial because you will have some money on the line and this will motivate you to do sufficient research before making any investment. This will also help you get into good habits.

4. Good instruments and software available for free.

Just like a doctor wouldn't operate on a patient without information found on an x-ray or an ultrasound, and a pilot wouldn't fly without his altitude and speed detectors, traders shouldn't trade without gathering information from graphs and news outlets. Gathering information on companies, countries, and organizations has never been easier due to quality news outlets and graphing software, such as MetaTrader 4 being made freely available.

5. Inflation

Each year in the US and around the world inflation rates continue to impact prices. This is not in the best interest of savers, and by putting your money in a savings account, inflation rates will slowly decrease the value of your money over time, leaving you with less wealth than when you started with, despite gaining money through interest rates. However, you can prevent interest rates from decreasing the value of your savings by investing and growing your money. The average return from the stock market is between 7 and 10 percent, which is much higher than the annual inflation rate.

6. Short or Long Term

One of the features of the stock market is being able to invest in a stock over a short or long period of time. Investing over a short period of time can allow you to make large profits by taking advantage of volatility and leverage. Investing over a long period of time can be beneficial, and can allow you to make large sums of money by investing in promising start ups while they are still small.

7. Allows You to Grow Your Money

If you invest sensibly and with a plan, you can steadily make money over time and generate a passive income, which can help you save money for retirement, a house, or any large cost that you might have. Dividends will also allow you to accumulate money over time with no risk and this will further help you save money over a long period of time.

8. Blue Chip Companies

A Blue Chip company is a multinational firm that has been operation for a number of years and is well established. Examples of Blue Chip companies include Coca Cola and Intel. These companies are reliable and can be counted on to make profit regardless of the economic situation.