Sunday, July 8, 2012

Investing In the Stock Market Made Easy

Why should we invest in the stock market?

History has proven that investing your money in solid growing companies over a period of time provides greater return than regular savings.

Investing in the stock market is also a good hedge against inflation or the steady increase in prices of goods and services.

How do I profit from the stock market?

When you own shares of stock, you own part of the company. The stock market is a venue for one to buy and sell shares of publicly held companies with the intention of benefiting from the company's growth through two ways:

  1. An increase in stock price or capital appreciation.
  2. Company earnings distributed to all shareholders in the form of dividends.

The principle of long-term investing?

The longer you hold onto an investment in a quality company, the less chance of experiencing a negative return on your investment.

Compounding is the act of reinvesting your profit and dividends to further increase the income generated by your capital. The longer you stay invested, the greater the returns. 

Source: citiseconline

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