Investing In Stocks

There is a common misconception about stocks. The public believes that only 1% of the super rich should participate in the stock market. But it’s not true

If there is an intermediary company that provides fee free transactions such as Robin Hood and Fidelity, it can buy sporadic stocks and benefit from the stock market for a long time. In this article, I want to talk about some reasons for investing in the stock market.

First of all, I want to talk about what inflation is and why it is important. If you often go to the grocery store, you will soon realize that the price of your favorite yogurt is rising every year. Or your favorite brand of almond milk is much more expensive than before. This is inflation. The price of things around you is going up. If you earn 50000 dollars a year and live on 30000 dollars, about 20000 dollars will remain in your savings. Forget about taxes for a while. But of course, the inflation target will be announced at 2% per year. This means that the price of $1 today will be $1.02 next year. You may think that this is not a big problem, but your current living expenses are 30000 dollars. This means that at this rate, your living expenses will reach $30600 next year. Wait a minute. Your salary will not change. Because your employer doesn’t give you a raise every year. Eventually, you begin to lose purchasing power. This is something you can afford with your salary. This is where investment works.

The above situation is the most basic reason for investment, but you can think about why the Federal Reserve(Fed) has set a 2% inflation target. Because they want the economy to expand and create more jobs. Job creation is a good indicator of good economic conditions. If the price rises slightly every year, large enterprises or wealthy individuals will soon realize that their cash holdings are depreciating every year, so they will immediately buy in large quantities. When these people or companies make large purchases, demand will rise slightly, and supply will also increase to match the growth rate of demand. This increases the real economic output, telling us whether the economy is expanding or shrinking

Now you don’t have to do it that day. Select all stocks correctly. You can invest in S and Amp. P500 index fund tracking the economy. As the economy continues to expand, you can take advantage of this. Although your money may not get the maximum return, your risk is very dispersed. Not one company, but 500 of the best companies in the United States to balance your product portfolio. Companies with poor performance will be offset by companies with good performance

We recommend that you refer to this blog for more information.