Reasons For Investing In The Stock Market – Part 2

19.12.2009 | Author: Zigfred Diaz | Posted in Financing

In my previous article, the first part on the advantages or the reasons why you should invest in the stock market was discussed. Three points are highlighted, mainly potential for greater returns, part ownership of the company you are investing and belonging to a special group of people. This is the second part of this two part series. Check out my blog should you wish to view the article in its entirety.

4.) One of the best if not the best vehicle of investment – In 1986 the Philippine stock market recorded its highest return rate at 224 %. The lowest return rate was recorded in 1997 at negative 41 %. The average return in 20 years time however ranges from 24 % to 28 % per year. It can therefore be clearly seen that while it is true that investing in the stock market has its up and down, in the long run long term investments in the stock market still yields a greater return. Hence it can be concluded that the long term investors always benefit and that the stock market is still one of the best vehicles of investment.

5.) Increases your financial knowledge and forces you to learn. – If you dozed off in your high school or college days economics class before, you might loose all your hair right now just to force yourself to try to understand what inflation means. You start to begin reading the business news regularly and try to give importance to major news headlines as this will have an impact on the behaviour of the market. You will be forced to understand words that you never understood before. You will become more smarter and wiser more than ever as are forced to keep on increasing your financial and investments knowledge.

6.) Helps you more to become internet savvy. – It has been said that the development of mankind is divided into several ages. First we had the “stone age”, then came the iron age and then the bronze ages etc. Afterwards we moved up to the industrial age. Currently we are said to be in the “information technology age.” In this age, knowledge is power. This is not just considered as an adage. Rather this is the essence of the information age. Engaging in online trading will surely help you understand what this means. During the time that I was in college I wanted to invest in the stock market. The reason for my curiosity was because I always see in the movies how the traders are shouting buy or sell. However I did not invest during that time because of three reasons. First I lack the information. Secondly, I do not have the capability and thirdly I do not have the money to invest.

In today’s internet driven economy, information can be accessed easily through the world wide web.Trading is made much more easier with online trading facilities. As this opportunities are presented to me, I made it a point to start investing in the stock market. Now I do all of my trading activities online such as monitoring the news, buying and selling of stocks and transferring money to my accounts. Perhaps I will someday move into global stock market trading. Despite its complications, the principles in stock market trading is still somewhat the same.

7.) Help in nation building – The most noble objective and advantage as to why you should invest in the stock market is probably this one. Companies want to get listed in the stock exchange to raise more capital for their business in order that they could expand. Business expansion is translated as more jobs, more taxes for the government and more economic activity. This in effect moves the nation forward and helps build the nation.

Certainly these compelling reasons make a valid argument as to why you should invest in the stock market.

Would you want to know more about investment strategies ? Visit the blog of Zigfred Diaz where he writes about several interesting topics such as investments, money management, business, making money online and Stock market investing

Bookmark It