The Advantages Of Stock Investing

Now that it is time to invest your funds, it is great to know what benefits to expect. These should get you excited about the state of your investments

Let’s say you’ve gone full circle; you have saved up money, learned all you need to learn about how investment works, even analyzed company stocks and seen their performance. All that is left is to buy the stocks with your fund and watch.

If you have gotten to this juncture, then that’s awesome. The advantages are numerous. However, there is no gainsaying the fact that as wonderful as stock investing is, there are pull-backs you also have to watch out for. First, here are the benefits:

It Helps You Grow Your Funds:

This is probably the most apparent advantage. The essence of any form of investing is to be able to multiply, or at least, increase the value of your funds. Stock investment has an additional benefit.

While investing in a savings account is simple, and why investing in the money market is safe, stock market investing is probably the only kind of investing where your money actually grows higher than the inflation level.

You can compare the prices of stocks over time as well as the dividend yields of Nigerian stocks on the Yochaa App.

If you take up an hypothetical scenario of an investment you made three years ago and compare it to its value now, you would see by how much your funds have grown. There are two ways investors seek to make money, and these ways are entirely mutually exclusive.

There are the investors who use their investment to finance their living expenses. These guys are interested in a constant flow of dividends. However, there are those who invest in long-term gains.

If your goal is also to invest for a long period of time, then the benefits that would accrue to you are even more awesome. Generally, the plan is to buy low and then sell high. However, sitting out the market for a long term is always a better plan.

You get to Invest in the Economy:

When you see reports about developing nations, rising GDPs, and so on, who do you think contributes to it? Companies. Nigeria;s GDP rises based on company growth over time. Having the opportunity to invest in companies gives you a piece of the pie.

More so, as the economy grows, corporate earnings also grow. You are essentially also creating value. You are helping in job creation, improving the standard of living of many, spurring production and supply of goods and services, and so on. You get to do all this and still have your funds earning money for you.

The Ease of Stock Investing:

If you have tried growing your income or investing fund by starting a business yourself, then you would know that it isn’t easy. It is a lot of stress because you need to actively be involved in it.

However, the stock market is literally waiting for you. You get to buy shares as you wish and you also get to sell your stock at any time. When you need money when investing in a business or actual asset, your money is as good as tied down.

However, the market is liquid, you get to get your cash out quickly and with low transaction costs.

Getting your cash out fast, can, however, lead to an unfavorable position in the market as you would have to see at any price. In our next post, we would explore other disadvantages.

Written by Lawretta Egba