Yes, I am referring to you, you who work tirelessly every day. You who have big dreams for your family. You who plan to put up a business. You who right now is sitting somewhere reading this blog. Let me repeat it again: The Stock Market is for you.
Now, why did I say that the Stock Market is for you?
1. You are oozing with potential.
The click you just made a few minutes ago when you saw the title of my blog attests to your potential to succeed in the Stock Market. As soon as you read the title curiosity took over you— a curiosity that led you to think that this could be an opportunity that might bring you a greater return. And here you are now reading and wondering how you will make things happen.
Way to go, my friend! That’s a trait successful people have: passionate curiosity.
In the stock market, a number of options varying from nature, size, and scope of business, price per stock, etc. are available. And so, a person wanting to venture to it must be a diligent seeker of information, open-minded to new things, and has an undying desire for learning.
This advice is not only for people with non-finance background who wants to enter the Stock Market, it is also for those who had studied it, and even for those who decide to hire a financial broker or finance manager for themselves. Consistent hunger for knowledge is a must for a person longing to be successful in this field.
Did you know that thousands of new information are being added to the world’s bank of knowledge every second? A bulk of information is being added even right now as I speak to you! And the Stock Market is no exception to that. Who knows? The information, rules, and methods we know right now could be outdated later.
So, go ahead. Read and read and read and unleash your potential!
2. You are an innate investor.
Does the term investor make you shiver? Let us not make things complicated, investing simply means giving away something of value for a return. Truthfully, there is no reason to be afraid as it’s actually something we practice throughout our existence.
Think about it. We give away our time, money, and energy in studying because we look forward to landing on a high-paying job. We buy properties that can be of benefit to us either by reselling it or improving it for future business. We pay for expensive dates and casual coffees with the hopes of getting loved back.
Aren’t all those investments? Yes, of course! (Though sometimes the last example can be the hardest investment with the lowest return… oh, my heart!) See? We aren’t foreign to investing. So, don’t feed yourself with pessimistic thoughts like, “Investing is not my forte,” because, my friend, you practice it every day of your life and almost do it naturally.
Investing in stuff I talked about above and the Stock Market may differ in some ways but the principle remains the same.
In the case of the Stock Market, investing means putting your money in corporations that offer a portion of ownership of their company which is called stocks. So you give away money, in return, you become a part owner of the corporation meaning you earn as they earn and lose as they lose.
“So, it’s possible to lose in the Stock Market?”
Returns always come with risks. They are two inseparable stuff like Jack and Jill or Tom and Jerry. Well, come to think of it, in whatever business you get into, there is surely a percentage of losing. Because if what you’re venturing promises a sure return with zero percentage of losing, that, my friend, is surely is a scam.
Yes, there are risks involved in the Stock Market but that doesn’t mean it’s already dangerous to begin with. All we have to do is to be able to manage those risks.
3. You ought to invest as early as you can.
How early should we start investing? The answer is now!
I personally believe that the Stock Market is a place for long-term investments. While there’s nothing wrong with hoping that your investments can help you today, I believe that its real purpose is for your long-term benefit such as retirement fund, your kids’ education, or a business you plan to put up years from now. Hence, the earlier you invest, the better.
I personally regret that I didn’t know about the Stock Market in my younger days. If I only knew it earlier, I think it could have been so much better. Think of the world-renowned investors like Ray Dalio and Peter Lynch who at their young age, though still students, were already interested in the Stock Market. Well, the rest is history. After some years, their investment boomed and were millionaires.
See? The Stock Market is really for you. Now, let’s proceed to the most frequently asked question:
WHY INVEST IN THE STOCK MARKET?
Of all the investments available out there, why choose the Stock Market to be the platform for growth of your hard-earn money.
1. It is safe.
The corporations that you can choose to invest in the Stock Market are all government-registered, established, and have been operating for years. Think about it. Surely they are already a structured organization composing of hundreds, if not thousands of employees. Far safer than a friend asking you to partner up for a business he wants to try. Compare the experience he has to the company in the Stock Market that you plan to invest in.
Don’t get me wrong, I am not against business partnerships. All I’m saying is that, if we are willing to take a risk to a person that might change his mind any moment and run away with our money, why not try to entrust your hard-earned money to a structured corporation which is bound by government regulations?
2. It is diverse.
This point is actually directly associated with the Stock Market’s safety. Diversity is a characteristic of the Stock Market. Investments varying from low, mid, and high-risk options are available.
I personally suggest you invest in stocks with different levels of risk. Try using this percentage I go for: 50% low-risk, 30% mid-risk, and 20% high-risk. So, if I plan to invest $1,000 in the Stock Market, $500 will be allotted for low-risk stocks, $300 for mid-risk, and $200 for high risk.
Of course, this is just an example. The percentage of allotment varies from person to person depending on how much your heart can tolerate. If you’re too nervous for now, you may cross out investing in high-risk and stick with low or mid-risk stock investments. If you’re too adventurous, you may cross out low-risk, and stick with mid or high-risk. Again, the key here is diversification.
So, talking about diversification, do not put all your money in stocks alone, too. Invest also on other options available such as real estate, bonds, business, even in banks’ time-deposit if you want. Create your own percentage allotment as well. But I recommend that you put the highest percentage in stocks. Why? Point number three will explain it for you.
3. It has the most potential for growth.
Despite regular ups and downs in the financial market, stocks earn more than other investments available out there.
In a study conducted by Morningstar, Inc. last year on the flow of U.S. stocks from January 1926 to December 2016, stocks returned an average of almost 10% annually, while bonds is at 5.4%, and short-term investments 3.5%, before inflation.
Of course, it wasn’t a constant going up, but in comparison to all other financial investments, the growth of stocks bears the most potential for growth. Far greater growth than what bank savings can offer where your money and success are somewhat asleep. See my previous article to know more about it: Bulk of Your Money Should Be in the Stock Market, Not in the Bank.
As a hardworking individual with big dreams for my family just like you, I can relate to that burning desire to elevate your financial status. And just as how it is working well for me, I believe that the Stock Market could also be your place of success. Just keep in mind that it all lies on you. Believe that you have the potential and walk the extra mile.
Who knows? Your investment success might only be a few steps away.